By nature, money market mutual funds do not involve a lot of risk. These funds must invest in safe securities by law, such as commercial paper, bankers' acceptances, and treasury bills. Without the integration of high-risk stocks and more variable investment instruments, money market yields do not have the potential of other mutual funds to bring in money. They also do not have much in terms of potential risk. Although not federally insured like a regular savings account or money market account, they are highly unlikely to cause an investor to lose money.

Money Market Investing

Many people may be interested in a low-risk investment option, even if the expected earnings are lower. They may also enjoy the flexible, short-term options available in the money market. This is why money market investing has more or less grown since the 1980's, when deregulation made this alternative network of investors, businesses, financial firms, and governments possible.

The money market serves the purpose of funding short-term financial needs at a low-cost with low overhead. Banks, businesses, and governments who have excellent credit are able to issue securities for investors to purchase, with the expectation of a small, yet secure return, in a short period of time. This symbiotic relationship between the borrowers and the investors is possible without using the bank as a middle man.