Vanguard posted an article entitled, "Stashing cash in a bank account? Why you should think about money market funds." They tell us, "​You'​ve probably given a lot of thought to the stock and bond investments in your portfolio. But have you stopped to think about how you'​re managing your cash? ... Cash is a part of a diversified portfolio. How you allocate your investments across stocks, bonds, and cash is one area of investing you can control. In fact, research has shown that, if you have a diversified portfolio, 88% of your experience (​the volatility you encounter and the returns you earn) can be traced back to your asset allocation. Cash investments are very short-​term investments that can lower the overall risk of your portfolio. Because cash tends to be safer, you can use it as a '​parking lot' if you: Are still deciding how to invest your money, or need to spend your money in the next 3–​6 months, for example, for college tuition or a down payment on a house. One popular cash investment is a money market mutual fund." They explain, "Because interest rates are rising, now'​s a good time to check the yield on your money market funds, savings accounts, certificates of deposit (​CDs), and brokerage settlement funds to see how much more you'​re earning. If you invest in money market funds, you'​ll likely earn about the same income as, or sometimes more than, other banking products. And while these funds don'​t have the additional insurance of a banking product, they also offer: Easy access to your money ... [​and] a reduction in market risk. Money market funds invest in high-​quality, ultra-​short-​term securities, like Treasury bills and CDs, greatly reducing your market risk compared with stock or bond funds.... With our funds, you'​ll get: Superior returns. Our funds have produced exceptional returns compared with their peers. In fact, 100% of Vanguard money market funds performed better than their peer-​group averages over the past 1-, 3-, 5-, and 10-​year periods. Low costs. Since money market funds have lower yields than more aggressive investments, costs play an even bigger factor.... The average expense ratio on Vanguard'​s money market funds is 57% less than the industry average." Randy Lee, head of fixed income product management at Vanguard, comments, "We'​ve relentlessly focused on maintaining high standards for managing credit in our portfolios, preserving liquidity, and guarding against disruptive redemption activity.... Our money market funds provide high-​quality and liquid investments in both stable financial markets and periods of uncertainty, offered at a low cost and managed by a deeply experienced team.... This formula allows us to provide highly competitive yields while maintaining the investment prudence and stability investors seek in a money market product."

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