MM Finances ’95 likely refers to money market mutual funds (MMMFs) in the year 1995. Understanding their role then requires examining the economic climate and the regulatory landscape of that period. In 1995, the US economy was in a period of moderate growth following a recession in the early 1990s. Interest rates, while fluctuating, were generally higher than in the decades that followed. This made MMMFs an attractive option for investors seeking higher yields than traditional savings accounts, without the volatility associated with stocks. MMMFs, as they exist today, are a type of mutual fund that invests in very short-term, low-risk debt securities. These securities include Treasury bills, commercial paper, and repurchase agreements. The goal of an MMMF is to maintain a stable net asset value (NAV) of $1 per share, making them appear similar to bank deposits. The appeal of MMMFs in 1995 stemmed from several factors. Firstly, they offered relatively high interest rates compared to traditional savings accounts or certificates of deposit (CDs). The higher interest rate environment of the time made even small differences in yield significant. Secondly, MMMFs provided liquidity. Investors could easily deposit and withdraw funds, making them suitable for parking cash that might be needed in the near future. Thirdly, MMMFs were perceived as being relatively safe. While not FDIC-insured, they were required to invest in high-quality, short-term securities, minimizing the risk of principal loss. However, the inherent risk of MMMFs was not always fully understood by investors in 1995 (and continues to be an issue today). While the intention was to maintain a $1 NAV, there was always the potential for a fund to “break the buck” – meaning its NAV would fall below $1 per share. This happened in isolated cases before 1995, and the possibility was a concern for regulators. During the mid-1990s, regulatory oversight of MMMFs was evolving. The Securities and Exchange Commission (SEC) was responsible for overseeing these funds, ensuring they adhered to guidelines designed to limit risk. These guidelines focused on portfolio diversification, maturity limits, and credit quality standards. However, the regulations were not as stringent as they became after the 2008 financial crisis. Therefore, MM Finances ’95, referring to money market mutual funds, represents a period where these funds were a popular investment option due to higher interest rates and perceived safety. While considered low-risk, it’s crucial to remember they were not risk-free, and the regulatory environment was still developing to address potential vulnerabilities.