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Celebrating Women In Business Ask Amanda Vol.1 Issue 19

Ask Amanda

“The markets have been so crazy this year… is it better to go to cash for now?”
Amanda Johnston

This is something that I have been getting asked quite often lately. In some cases, it could be beneficial to move to cash. If you are investing heavily in the Stock Market, potentially reducing your risk is not a bad idea. Especially if you are within 5-10 years of retirement. On the other hand, we must be mindful of how much money we have in the bank. We all know that the banks are hardly paying anything (I often hear of rates as low as 0.20%). We also must understand that there is something being done to constantly devalue our dollar, the Feds printing money. We have gone from 23 trillion to 29 trillion in debt this year. We have also gone from 3% inflation to 3.5%. Inflation is something that you don’t see, and you don’t feel, but it is continually having an impact on your hard-earned money. Now if we put some math to this… if the bank is paying you 0.20% and real inflation is 3.5%, does it make as much sense to have all of your money in the bank? No, because you are clearly going backwards, not even keeping up with inflation. The next question one might ask is if I don’t have my money in the market and I don’t want it sitting in the bank, where do I put it? The answer: there is an entire universe of conservative, income generating investment tools that are available for you. This universe of investments will allow you to take your foot out of the boiling water of the stock market while also allowing you to keep your other foot out of the frozen water of the bank. Asking questions of the professionals in your life is a great way to get educated about these options. Getting the guidance of a fiduciary in such uncertain times could be one of the most important things you could do for you and your retirement. Please send comments and questions to ajohnston@soundincomestrategies.com.