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Balancing a Portfolio with Certificates of Deposit

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.

Increasing Interest Rates for Certificates of Deposit

Stockholders need to consider moving some money out in stocks into a cd to minimize risk. Many banks are raising the rates, but you need a certain minimum amount to take advantage of the best rates in most cases.

It is great to be able to invest in the stock market, but it makes more sense to consider the benefits that come with spreading out the money that is available for investing. Sometimes it is much more beneficial to consider a lower rate of return that is a stable rate of return. This is what many people find out once they start losing money in the stock market.

Fortunately, there much growth when it comes to investing that it doesn’t take a lot of time to see what the internet banks have to offer. If you have 25,000 on average it is going to be possible to get a higher rate of return than people that do not have this amount. The more money that is invested equates to a larger return on the investment in the long run.

This is evident when people look at what is happening with the number of Internet Banks like Ally that are increasing interest rates every other month it seems. The interest rates are increasing for certificates of deposits, and Ally is constantly giving customers updates on the type of rates that they can acquire if they sign up during during a certain time period. This may be one of the most beneficial things to consumers that may have been wondering how they could earn money without having such a big risk associated with the money that they are investing.

It is vital for investors to consider a multitude of things like certificates of deposit, annuities, index funds and stocks. Setting a portfolio on autopilot when there are such great gains in interest rates for certificates of deposit is not a good idea. The smart investor will take the time to acknowledge the fact that online banks are much better than traditional Banks. When it comes to interest rates these banks actually have something to offer. There are even some opportunities for people to earn a greater than average return on investment with a savings account with Internet banks.