What is a Money Market Account?

"A money market account is like your basic savings account’s more mature sibling. If you’re looking for a safe place to deposit and earn better interest on a large chunk of money, it might be worth consideration.

Here’s a look at what money market accounts are, how they differ from regular savings accounts and when it makes sense to own one.





What is a money market account?
A money market account is a type of savings account, with the same protections and generally a slightly higher interest rate. The trade-off? There’s usually a higher minimum balance requirement.

Some money market accounts also have limited check-writing and debit card features. But because these are a type of savings account, they fall under the Federal Reserve’s Regulation D, which limits the number of so-called convenient transactions — including checks, debit card swipes and online transfers — you can make to just six per month.

These are different from money market funds, which are investments that can lose value if the market falls. Money market accounts, on the other hand, are backed by the Federal Deposit Insurance Corporation (at banks) and the National Credit Union Administration (at credit unions), up to $250,000 per depositor.




When should you consider one?
Don’t expect to see quick gains on any of the four primary types of bank accounts: checking, savings, money market and CDs. Other investment options are better suited to that end, although not everyone feels comfortable with the volatility of the stock market.

The situation where a money market account is your best option is fairly specific. It’s a good choice if you want:

• The safety of a bank or credit union.
• A higher interest rate.
• Access to funds in a pinch.
• The ability to write a few checks.
• If any of those aren’t true (and sometimes even then), you can find better alternatives elsewhere.

For example, if you want growth but greater access to your money, you may be better off opening an interest-bearing checking account. If you don’t care about writing checks, you can find comparable or better rates with some high-yield online savings accounts. And if you just want the bank account with the highest return and can afford to set this money aside for months or years, try a CD.

You could use a a money market account for an emergency fund. Like a basic savings account, it’s separate from your daily use, but the money market account might grow a bit faster and you can write a check from it to cover whatever surprise arises. "


( https://www.nerdwallet.com/blog/banking/faq-money-market-account/ )
( https://www.nerdwallet.com/blog/author/mburnette/ )

Macroeconomics vs Microeconomics

"Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and government decisions.

Macroeconomics and microeconomics, and their wide array of underlying concepts, have been the subject of a great deal of writings. The field of study is vast; here is a brief summary of what each covers:

Microeconomics

Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize its production and capacity so it could lower prices and better compete in its industry. (Find out more about microeconomics in How does government policy impact microeconomics?

Microeconomics' rules flow from a set of compatible laws and theorems, rather than beginning with empirical study.

Macroeconomics

Macroeconomics, on the other hand, is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy-wide phenomena, such as Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by unemployment rate. (To keep reading on this subject, see Macroeconomic Analysis.)

John Maynard Keynes is often credited with founding macroeconomics. He started the use of monetary aggregates to study broad phenomena; some economists reject his theory and many of those who use it disagree about how to interpret it.

While these two studies of economics appear to be different, they are actually interdependent and complement one another since there are many overlapping issues between the two fields. For example, increased inflation (macro effect) would cause the price of raw materials to increase for companies and in turn affect the end product's price charged to the public.

The bottom line is that microeconomics takes a bottoms-up approach to analyzing the economy while macroeconomics takes a top-down approach. Microeconomics tries to understand human choices and resource allocation, and macroeconomics tries to answer such questions as "What should the rate of inflation be?" or "What stimulates economic growth?"

Regardless, both micro- and macroeconomics provide fundamental tools for any finance professional and should be studied together in order to fully understand how companies operate and earn revenues and thus, how an entire economy is managed and sustained."

( http://www.investopedia.com/ask/answers/110.asp#ixzz48XyN68VH )

S&P 500 defined.

"WHAT IT IS:

The S&P 500 Index is a diverse index that includes 500 American companies that represent over 70% of the total market capitalization of the U.S. stock market. 

HOW IT WORKS (EXAMPLE):

First developed in 1923, the index initially contained 233 stocks. However, in 1957 it was modified to include a diversified basket of 500 common stocks.

The S&P 500 is not comprised of simply the 500 largest U.S. stocks. Instead, it consists primarily of leading companies from a wide variety of different economic sectors. The index started with 23 identified sectors, but today contains over 100 unique sectors. Most analysts choose to use the S&P as their preferred benchmark index thanks to its diversified sector coverage as well as its market value weighting. Because the index is weighted by market capitalization, the largest firms have the greatest impact on the S&P's value.

WHY IT MATTERS:

The S&P 500 index is probably the most commonly referenced U.S. equity benchmark. Many regard it as the single best way to track the overall performance of the largest and most dominant American companies.

Because of the index's high market cap requirements, the S&P 500 does reflect the performance of some of the smaller, but faster growing, companies on the market. A number of different mutual funds track the performance of the S&P 500. However, many investors find that the most convenient and cost-effective way to trade this index is to purchase a SPDR (Spider). A spider is an exchange-traded fund (ETF) that tracks the S&P 500. It has an extremely low expense ratio and can easily be bought or sold on the open market just like a regular common stock."

( http://www.investinganswers.com/financial-dictionary/stock-market/sp-500-index-890 )

Total Stock Index Defined.

"DEFINITION of 'Total Stock Fund'

A mutual fund or ETF that seeks to replicate the broad market by holding the stock of every security that trades on a certain exchange, invests in a certain country, or passes basic thresholds of size (market cap) or trading volume. Total stock funds, also called total stock market index funds or total market funds, may track a broad index such as the Wilshire 5000, Russell 2000 or MSCI U.S. Broad Market.

BREAKING DOWN 'Total Stock Fund'

These super-broad index funds tend to have less volatility than even large indexes like the S&P 500 just because they hold so many companies' stock. Most total stock funds will have portfolio weightings based in some way on market cap, but they are not necessarily just market-cap weighted, like the S&P 500 is. 

Total stock funds may not capture a full 100% of the market capitalization of their target market (such as the whole United States or all small-cap stocks), but they are usually able to capture 95% or more by owning the first few thousand stocks in order of market capitalization.

One of the largest and oldest total stock funds is the Vanguard Total Stock Market Index Fund, which has nearly $100 billion in assets and owns the 1,300 largest companies that trade on the NYSE, AMEX and Nasdaq."

( http://www.investopedia.com/terms/t/total-stock-fund.asp#ixzz47uBvoyHs ) 

What is Market cap?

"What is 'Market Capitalization'
Market capitalization is the total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.

Frequently referred to as "market cap."






BREAKING DOWN 'Market Capitalization'
If a company has 35 million shares outstanding, each with a market value of $100, the company's market capitalization is $3.5 billion (35,000,000 x $100 per share).

Company size is a basic determinant of asset allocation and risk-return parameters for stocks and stock mutual funds. The term should not be confused with a company's "capitalization," which is a financial statement term that refers to the sum of a company's shareholders' equity plus long-term debt.

The stocks of large, medium and small companies are referred to as large-cap, mid-cap, and small-cap, respectively. Investment professionals differ on their exact definitions, but the current approximate categories of market capitalization are:


Mega Cap - Market cap of $200 billion and greater
Large Cap - $10 billion and greater
Mid Cap - $2 billion to $10 billion
Small Cap - $300 million to $2 billion
Micro Cap - $50 million to $300 million
Nano Cap - Under $50 million "




( http://www.investopedia.com/terms/m/marketcapitalization.asp#ixzz47eIkzLSH )
( http://www.investopedia.com/articles/analyst/010502.asp#ixzz47eJeCpeh )