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We currently hold 65% of our bond portfolio in a high yield savings acct, which is currently paying 0.5% APY. When we first started putting money in this account in Aug 2019, it was paying 2.5% APY. We currently have some cash. We have no debts.

  1. What are some better alternatives to invest the surplus cash?

  2. Should we consider moving funds from the high yield savings account?

  3. Should we just hold the cash?

user65003
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What's the best option for where to put excess cash now is dependent primarily on what the market does going forward. No one knows what that will be.

Risk and reward go hand in hand. In order to achieve greater reward, you need to accept higher risk than the safety of 0.5% APY. And then there's the question of if/when you'll need the money.

Any answer offered would be no more than the opinion of the poster reflecting his own market outlook. What's yours?

Bob Baerker
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  • Thank you..I understand what you're saying. So let me be more precise. I want better options for the bond portion of my portfolio. A bond index fund/gold. On the stock side, I am doing DCA. – user65003 Oct 05 '20 at 21:10
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    @user65003 - For an income account, I'm partial to investment grade preferred stocks. They have a much better yield than cash and most of the time they're fairly safe. Occasionally, they're not (2008-2009, March of this year). However, for the most part, safer than the stock market. I have owned as well as traded them for about 20 years. Unfortunately, with interest rates so low, most preferred stocks have risen above par and I'm not a fan of paying up, especially if they are callable or near their call date. New issues of quality are now in the 4-5% range, lower than ever. – Bob Baerker Oct 05 '20 at 21:30
  • Here's something I wrote about this a while back. – Bob Baerker Oct 05 '20 at 21:30