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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

January/February 2019

Money Market Funds 101

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In an investing world that is often exciting and fast-paced, money market funds rarely elicit the same thrill. They can, however, provide a calming element to your portfolio. Here’s what you should know about them.


Mistaken Identity
Money market funds* are a pool of short-term securities typically managed by investment company asset managers. Although designed for safety and to preserve their value at $1 per share, these funds do not offer guarantees. This differs from money market accounts, whose principal is typically guaranteed by the Federal Deposit Insurance Corporation.


Money market funds have also undergone some change in recent years. When held by institutions, they are no longer required to maintain a stable $1 per share. Additionally, money funds may prevent withdrawals or charge an extra withdrawal fee during very volatile periods.**


Parking Spot
For most individual investors, however, money market funds offer the same features they always have. Often referred to as a “parking spot” for investors who want time to decide where to invest contributions, money market funds can offer relative safety and liquidity, especially when equity and bond markets experience volatility.


The tradeoff is you can typically expect a very low rate of return on your money market fund shares. If that rate is lower than the rate of inflation, you can lose purchasing power. If you’re looking for potentially bigger returns without sacrificing a lot of stability, you might want to look at funds offering short-term government debt securities. If you opt for this choice, you should know that even if a fund owns U.S. government-guaranteed securities, the fund itself can’t offer the same surety.


Weigh Your Options
As with any investment choice, you should consult a financial professional to learn more about your options. And don’t forget to note the effects of taxes and fees when comparing money market mutual funds.


* An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund may seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund.


** The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

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