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Cash is the safest investment. Great for liquidity. Held in physical money or deposited at banks and financial institutions. Can easily be used to buy products and services. Great for emergency funds and for purchase < 2 year. Value eroded by central bank money printing and inflation.

Money market funds are short term loans maturing less than a year, often 90 days, to companies to meet their short term liquidity needs. Low risk because paid back quickly. Lower rates of returns but higher than deposit accounts from banks.


Bonds are debts to companies and governments. Short-term bonds are less of a risk of interest rate rises in the future. Value less volatile. Stable investment after cash but poor return over long term. Government bonds considered risk-free, however. Great for money saved for over a year and less than 3 years.


Stocks are part ownership of companies with claims for the profit. For long term returns so should be kept for 5-10 years. Although stocks moves ups and downs over short term, over long term gradually goes up (not guaranteed). Half of returns are from dividends (roughly 2%) and reminder is from growth (market value of stock increases). Research shows investors who hold diversified index funds, as opposed to holding individual stocks, have better long term returns.

Money:Financial Operation