Money Market Funds: High Yield, Safe Cash Investments

Money market funds beat most high yield savings accounts in terms of interest. How do they do it? We’ll explain what is a money market fund, the benefits of …


  1. I use VMMXX for a competitive yield on my cash and am comfortable with the risks, but how do you invest the cash portion of your portfolio?

    00:00 Introduction
    00:20 How Warren Buffett invests his cash holdings
    01:07 Vanguard Federal Money Market Fund (VMFXX)
    01:58 Key differences between money market funds and bank accounts
    03:09 How money market funds are invested
    03:49 What are repurchase agreements?
    04:46 Other notes on VMFXX
    05:09 Vanguard Prime Money Market Fund (VMMXX) – where I park my investment cash
    06:31 SEC money market reform – liquidity fees & gates
    07:04 Liquidity fees – how much and when?
    07:39 Gates and withdrawal suspension
    08:27 Benefit of money market funds during rising rates
    09:20 What are your thoughts?

  2. Over time, common stocks have returned about 8-10% on average, including recessionary periods. Byinvesting in a money market mutual fund, which may often yield just 2% or 3%, the investor may be missing out on an opportunity for a better rate of return.May 1, 2018

    The Pros and Cons of Money Market Funds – Investopedia

  3. I pay 6.95 each trade. With the management fee – it really reduces any gains, plus you have the gates. Seems simpler to just hold the cash available fast – then to pass it around for a few bucks here and there ? Guess it depends how much you are holding finally.

  4. Wonderful video Michael. I too have been placing my money directly into short term U.S Treasury bonds. Along with money markets in well trusted companies like Vanguard. Banks are definitely outdated and don't preserve anything except for themselves.

  5. Thank you Michael. You are a natural born teacher. I really appreciate the time you take to explain what terms mean and how things work. You’re the best financial trainer on YouTube. Priceless.

  6. Hey Michael, love your videos. Have a question I can't find an answer to: if a 3x ETF perform 3x better than an index like the dow or the s&p500, why don't I hear anyone recommending investing in these long-term?

  7. The liquidity those funds provide is often a very positive point in investors' eyes. That's why I also like to use them as a cash stacking platform instead of letting my cash sit on a savings account. The money is almost as available as in a savings account but you also get that dividend.

    Gotta be careful with the ex-dates tho!

  8. CIT Bank if offering 2.45 APY and don't have any annoying ACH limits…NASB just announced 2.53 but I have never used them. I've used CIT Bank on and off for years and they are fine. I now have funds in mySavingsDirect at 2.40 but STAY AWAY from them. They have a roach motel like transfer policy and only allow a maximum of two linked accounts which can ONLY be checking which guarantees several days of crappy interest when you want to get out. To set up the second linked account they actually require a snail mail copy of a check be sent to them! To top if off, they will only do a wire transfer to a linked account! I jumped at the 2.4 a couple of months ago but I'll be out as soon as all my ducks are in a row to reduce my lost interest during the move…

  9. I’ll only ever put my money in a vanguard money market account. But yeah money market accounts are great as it has a high liquidity and they offer a way better yield than banks. Miss me with that 0.03% bullshit.

  10. Like you i make use of Robinhood. I prefer to keep my free cash in iShares Short Treasury Bond ETF (SHV). While slight lower yield (the current 30 day SEC yield is 2.29%) i don't have to mess with moving my money between different accounts (everything stays in robinhood). Also the volume is quite high so you don't have to worry about liquidy issues.

  11. Great video! Money market funds are great, I have a UBS account and they don't charge any fee for the cash sitting in money markets funds, right now I'm getting 2.26%. Like you said, thats better than most savings accounts.

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