There haven’t been too many certainties about the year 2020, other than most things are going to be uncertain. The coronavirus pandemic that began earlier this year turned the stock market upside down briefly before rebounding nicely in some areas. There’s still a long way to go before we reach the levels we were at pre-pandemic, so you may be looking for more conservative investment alternatives with there still being a high level of uncertainty in the stock market worldwide. Here are a few conservative investment alternatives to consider if you have extra cash to invest and want to keep your path to financial success smooth outside of the stock market.
Plenty of cash investment options are available if you’re looking for safe portfolio management options. High-yield savings accounts and certificates of deposit (CDs) are the most common options. With these accounts, you will earn a specific APY, which can be just north of 1% for savings accounts and up to about 3% on CDs. Of course, you won’t become wealthy or achieve high levels of success with cash investment accounts like these, but they provide you with a safe place to put your money and earn interest while you wait to see what the stock market does.
Federal bonds through the United States government are considered to be among the safest investment options globally. The only downside to them being so safe is they rarely have high interest rates and are often the lowest you’ll find anywhere. Some of the federal bonds include Treasury bonds, Treasury notes, Treasury inflation-protected securities, and savings bonds. Regarding your portfolio management, federal bonds can be a great way to keep your money safe and earn some interest as you wait for the stock market to get back to a more comfortable level.
When people expect the stock market to be down for a while, short-term bonds can be valuable options. They are designed to be shorter-term, so the interest rate risk is lower. It’s not unheard of to find short-term bonds offering upwards of a 2% return, which is on the higher end of the scale when it comes to short-term investment options. And the great part about short-term bonds is their maturity dates are usually five years or less. After the maturity date, you can decide whether the stock market has returned to a level you’re comfortable with and re-invest in it with the money taken from your short-term bonds.
Stock Investing Info can help you decide whether it’s time to pursue conservative investment alternatives during these times of market volatility. The most recommended strategy typically involves keeping your money in the stock market during volatile times, but it’s understandable to want to look at safer options. Whether it’s the fear of uncertainty, you’re nearing retirement age, or any other reason, we will help you determine your risk tolerance, so you feel confident with any final decision you make. As always, contact us at any time if you’d like to pursue any investment options and need some advice before doing so.