Time to Get Back Into Stocks?
July 23, 2009
Stocks are surging, with the Dow passing 9,000 today. What does this mean for conservative investors in search of the best CD rates and the best money market rates? Is it time to shift more savings into equities?
Risk vs. Reward, and the Danger of Getting Greedy
Stock market returns, when they're good, are really good. Since the March 2009 lows, stocks have seen gains of more than 30 percent. Particular stocks, such as Apple Computer, have nearly doubled in value.
With CD rates below two percent, conservative investors may be rethinking their strategy. However, such investors must be wary of "chasing" a rising market, especially those investors who are approaching retirement.
There is absolutely nothing guaranteed about the stock market. Certificates of Deposit, by contrast, are a sure thing.
"A Trader's Market"
Anyone who watches CNBC has heard, perhaps more often than is healthy, the expression "it's a trader's market." Despite the hoary nature of his phrase, there's truth to it.
Investors who like the "set it and forget it" style of keeping money in sure thing instruments like high interest savings accounts may find that the time and energy needed to work the stock market is more hassle than it's worth.
Then again, 30 percent returns can be quite enticing...
