I’ve been having a really hard time trying to figure out what to invest in lately. I’ve been running my usual stock screens, and the same “garbage” companies come up. There is a lot of volatility in the market right now, and the future of the economy is pretty uncertain.
So, what is my strategy of choice? Doing Nothing!
Doing Nothing is Hard
I have to admit that doing nothing is actually pretty hard to do. I have money ready to trade, and I could pull the trigger at any moment, but I hold back. This is where being an emotional investor can really hurt.
Given that nothing is appealing, where do you put your money? I am just keeping it in cash until something interesting comes along.
Options For Doing Nothing
There are some options for doing nothing:
- Brokerage Sweep Fund: Check out What is a Sweep Account and How Do I Use It?
- Money Market
- Short-Term CD
While each of these is very similar, you earn more interest at each step. A brokerage sweep fund usually pays next to nothing in interest. A money market does a little better, and finally, a CD does the best.
Remember, the risk of a CD is that you must commit your money for a period of time, or you lose the investment. This is a risk, because if an attractive investment comes along, your money is tied up.
Readers, what are you doing with your cash at the moment? Are you waiting to trade or are you happy with what you have? Any other vehicles to store your cash in?
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This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
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Mostly waiting (and watching!).
I keep my cash in a high-interest checking account (around 3% I think so way better than a CD). It takes a little work to make sure you meet the requirements each month, and it’s capped at 25k or something, but I’m nowhere close to the cap, and then I feel like none of my money is languishing around not earning something
It’s sitting in a saving account waiting for the bank to approve a short sale.
Nice logical, unemotional move to do nothing. You are right, volatility all over the place. In the past, I couldn’t sit still and jumped in just to do something. I always lost money. Doing nothing back then would have been the most profitable move.
A good alternative is a risk free CD. Allows you to take the money out at any point w/o penalty. Does not pays as well as s regular CD but usually better than a money market. How about an ING online savings account. At least it pays 1%
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