By: Dr. Lynn Reaser
With interest rates at historically low levels and markets suffering tremendous volatility, investors are experiencing understandable angst. With the financial prospects so muddied, is there a safe and lucrative place to put your savings and investment dollars?
The answer is actually “no”. Investment inherently carries risk and the current low interest rate environment implies low returns on the safest of assets. Financial markets remain turbulent.
However, three options might be considered. Consider high-grade U.S. corporate bonds, particularly where you need a steady flow of income. If you are a long-term investor, as most people should be, stocks of solid U.S. corporations with a steady track of dividends could be attractive. Finally, if you need a place to live, buying a home now could be an excellent investment.
There are also some important fundamentals to keep in mind. The current economic climate underscores the importance of maintaining a diversified portfolio, reducing debt loads, and saving more.