Share Market Vs Money Market
The share market is also known as the equity market. It is an exchange where the ownership of the businesses is traded with each other. The price of these shares is determined by the demand and supply of that particular business.
Money Market is an investment that provides low-risk funds to investors for a short period of time. Creditors lend money to investors for a predetermined period at a fixed interest rate in contrast to sharing market which doesn’t dictate any interest rates.
The main difference between Share Market and Money Market is that Share Market deals with businesses while Money Market deals with funds or money.
Risks in Share Market
Investing in the share market is not for everyone. There are many risks to take into consideration before making a decision.
These include:
-volatility in the share market;
-reliance on other people to make decisions for you; and,
-the risk of not having an emergency fund outside of your investments.
Investing in the share market can be extremely rewarding but also carries a certain level of risk. This section will explore some of the risks that are involved in investing in shares.
A company can go bankrupt, which would mean that it is no longer profitable and the shares will then decrease in value. There is also a chance that a company may not be sustainable and could eventually fold due to a lack of profits and investments, which would result in the shares decreasing in value.
Risks in Money Market
The risks in the money market can be defined as the following:
As interest rates rise, investors may sell their short-term bonds and withdraw their funds, which will lead to a liquidity crisis.
Most of the liquidity in the money market is provided by banks that take deposits and create loans. If these institutions fail to provide sufficient liquidity, then there is a risk that investors will not be able to buy and sell securities.
Risks may also arise from the fact that these deposits are uninsured and cannot be guaranteed by either government or private institutions.
The risks associated with money market investments are mostly related to the interest rates. The prime objective is to make sure that you are getting higher returns than the interest rates of your savings account. But, this is not always the case.
These investments are great for short-term requirements (only up to 180 days). But, it’s not advisable if you want to keep your funds invested for a longer time period. You need to know that there's no fixed maturity date on these investments and the rate of return is capped at 0%.
Can We Invest Money in Money Market by Using Online Methods?
Investing in the Money Market is an excellent way to make your money work for you and save on taxes as well. The best thing about this type of investment is that it’s not just available for high-income earners and retirees anymore – it’s open to anyone who wants to take advantage of the lower interest rates and higher yields.
One should always invest money in the money market by following certain guidelines. One should first understand the things that are involved in this investment and then move on to invest the money. One should also take advice from the experts before investing their money.
Conclusion
The money market is a type of investment that provides a higher return than a savings account. A share market is a type of investment that allows you to buy and sell shares in companies.
Share markets are also known as equity markets. In this type of market, an investor can buy or sell stocks from different companies, such as Google or Apple, and make money from their share price increasing or decreasing. Money markets are typically not an equity-based investment because it does not give investors the right to own the company in question and its securities.
The difference between the two is the level of risk and return on investment. The money market generally has less risk than the share market but generally has lower returns than stock market investments
A money market is a type of financial market in which money is lent and borrowed at a short-term interest rate.
A share market is a type of financial market where stocks, bonds, and other securities are traded.
Share markets trade securities with a longer duration, while money markets deal with loans that will be repaid on the same day.
One of the most important decisions in your life is to choose between the money market and the share market. The decision depends on your risk appetite, investment horizon, tax implications, liquidity preference etc.
The shares are traded on the stock exchanges where it is possible to buy or sell stocks in one go. You can also diversify your portfolio by investing in multiple stocks in different companies.
Money Market invests the money to generate higher interest rates over a fixed time period which ranges from overnight to 3 months. Money markets are invested for a fixed period of time with no prearranged dates of withdrawal during that time period.
Share Market offers liquidity because you can sell shares at any time which is not possible with money markets where you have to wait for the fixed term to expire. It also offers divers