Be Cautious about Money Markets

Money market has been the safest way to invest for some investors and individuals who actually don’t know where to put their money. This was according to a news reports in Washing D.C.  The risk or downfall of credit worthiness globally not just in the US but in other parts of the world as well, so much amount of money has been used along with the money invested by entities and investors. While looking for a safer place to dock their funds, investors and individuals have found newer or it should be best described as fresher type of investment. Like federally guaranteed 0% interest checking accounts, people turned to cash levels at an increased basis and they even want to hold their investments even more to be able to meet the ends.

According to a data, the congress is actually working out over time even on weekends just to improve and raise the debt ceiling which all happened in July of this year. They did it to be able to close the congress deal by Sunday of the same month. The possibility to downgrade the credit rating of the entire nation is high according to a credit rating agency in the US. This made more investors and companies threatened to the point that they would like to look for a better place to put up their businesses. Fund breakage is the most fearful thing that could ever happened and this made lots of people including fund managers scared and compute the rough amount of the shared value that they will fall off once the market value went down to the normal  level which is around a dollar.

This is not impossible to happen according to an expert because it happened in 2008 due to the asset value of the reserve that actually went down to about 97 cents per share. This is because of the big holdings of the debt of Lehman Brothers which eventually declared bankruptcy as well. According to a senior economist who is known as Chris Plantier, an economist in an investment company it would take around 3% point rise in a short term interest rates which will actually affect the security in money that is present in a market fund portfolio. It’s actually fund value would go down to around 99 cents per share only.