Once upon a time we took it for granted that a money market account would earn an above average interest rate without risking losing money. In the midst of the 2008 financial crisis, the Reserve Primary Fund, our country’s oldest money market fund was forced to lower the net asset value (NAV) of its money market fund below $1 and all of its shareholders saw a loss.
Author- Justin Ladden
As we view the recent downturn in the stock market, we think about how relieving it would be to receive a steady 4% rate of return every year rather than having these ups and downs. However, a down market is not always a bad thing. There are several reasons why it is okay for the markets to occasionally correct. Here are a few:
We have heard a lot of chatter recently about the Federal Reserve’s timing on the increase of their federal funds target rate. The media and many investors have been anticipating this increase for a while now. However, in September 2015, the Federal Reserve agreed to leave the rate unchanged.