Ultra-Conservative Investments Work for Short Term, But Stocks and Bonds Better for Long Run
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Ultra conservative investments like CDs and high yield savings work well for short-term goals under 3 years, but not for longer term goals.
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Reasons people choose ultra conservative investments include near-term needs, fear of stocks, lack of investing knowledge, attempting to time the market, or unsure goals.
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Stocks have historically delivered far higher returns than conservative investments over long periods of 30 years or more.
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Bonds can generate income without needing to withdraw principal, making them useful for retirees.
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Speak to a financial advisor about your goals and risk tolerance when deciding how much to allocate to conservative vs other investment types.