MONEY MARKET FUNDS

Money market funds invest in debts with short-term maturities and liquidity. "Short-term," in the case of money market investments, means one day to one year. These funds seek to pay current, stable income. They include certificates of deposit, commercial paper, repurchase agreements and U.S. Treasury bills.

Money market funds are popular with conservative investors. When the market enters a downturn, these investors can place their money into these funds for safety until stocks move upward again.

The investor who wants to always keep up with the market has a unique choice, explained next.