In the wake of a financial crisis it can be difficult for people that have always put their money in stocks to adjust. As the market experienced a tremendous amount of trouble with the tax cuts after December it became obvious that people that have money in the stock market we’re going to lose money.
The Dow dropped hundreds of points, and other index funds like the S&P 500 showed a tremendous amount of loss. It became a nightmare for many of those that put all of their time and energy into the stock market and the stock market alone.
With this type of loss many people wonder why they had not given any thought to putting their money in other areas to balance out all of the things that may have prevented them from losing so much money. In this day and time one cannot overlook the benefits of a CD. Some of the online banks like Ally and Discover are providing consumers with decent rates of return with no loss as they would if they were investing in stocks. Granted, 2.5% to 3% returns are nowhere near the 7% return that one can get on stocks when they invest, but there’s also a greater amount of safety when it comes to these type of investments. The thing that people must realize is that they cannot put everything in stocks. Somewhere they will have to consider option like stacking CDs
in order to make the best of the money that they have. They may be able to get 3% and one place and 2% in another.
There are a large number of possibilities for investors to consider when the stock market crashes, but it is never something that people think about until they are actually in a place where they are losing money. It is much better to have a mindset towards stocks and diversity that comes with investing in other things like index funds and mutual funds. The interest rate is never going to be as great, but the fact that there is not as much loss on these types of investments makes it a viable choice. no one should ever put all of their money into stocks because the market can change.