Cash Equivalents and Money Market
Most portfolios include at least some cash. Cash can be invested in the very short term using financial instruments with high liquidity and very short maturities. The money market is used as a means for borrowing and lending over several days or up to one year.
Money market securities consist of negotiable certificates of deposit (CDs), bankers acceptances, U.S. Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements (repos). Investors may also consider CDs as a safe place to park money in the short term.
Money markets and other cash investments are typically seen as relatively safe and highly liquid investment alternatives although risks still exist including the risk of default.
Additional Investment Types
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