With so much drama in the stock market, you may be spooked and looking for “safety”. It’s not surprising if you’re wondering whether Certificates of Deposits (CDs) are a good alternative in volatile markets.

Here’s what you need to know.

“CD’s can be a great investment option for short term needs. By short term, I mean money you will need access to in less than five years. Investing in the markets should be for long term needs (at least five years). Regardless of market volatility any funds needed in less than five years should not be invested in the market,” says Alan Schoenberger, a certified financial planner with Endeavor Financial Planning.

Cash has once again returned as an asset class in 2019, says Mark Carruthers, a certified financial planner with Cetera Financial Specialists. “Rates are now above zero and some 2-year CD’s are yielding 2.5% these days. However, investors shouldn’t mix up savings & investing. The first implies emergency and/or rainy-day money with FDIC insurance. The second is long term in nature,” Carruthers points out.

Statistics continue to indicate the best long-term growth is found in equities. Thus, says Carruthers, “although volatility has returned in the fourth quarter of this year and some investors are getting uncomfortable with the stock market, a well-diversified portfolio is still advised for longer term goals.”

Continue Reading On AllRates.com

Like this: Like Loading...