Should You Invest in CDs Now?
By Martin A. Federici, Jr., CEO of MF Advisers, Inc.
With our U.S. economy in a recession (yes, forget about the nonsensical “spin” we’ve heard from the “media” and “administration” for the last 14-15 mos. or so; we’ve been in a recession) and rate hikes driving persistent inflationary pressure on most all but the wealthiest of Americans, one question I keep getting from clients/prospective clients is if it’s an ideal scenario to invest money in CDs (at the current rates). Let’s explore this scenario to see if it is a good time to invest in CDs….and away we go!
With inflation in the U.S. currently running ~ 6.45%, according to the Consumer Price Index (CPI-U) data released on January 12, 2023, and short-term (from several months up to 3 years) CDs yielding up to ~ 5.3%, it seems that you would be best parking non-emergency money that you might need in the next 1- 3 years in CDs. However – for long-term investment goals – CDs are probably NOT the best option by themselves. Equities, commodities, real estate, equity mutual funds, ETFs, etc. would be better options for long-term (5+ years) investment money (potential for greater returns over time vs. CDs) and we can’t forget about other fixed-income options (bonds, bond funds, bond ETFs, fixed annuities, etc.) to help diversify the many risks (so many!) in a portfolio.
In conclusion, it’s never an all-or-nothing strategy when it comes to investing in CDs. You should consider CDs when the rates are worthwhile and it helps you to accomplish your goals, whatever those goals may be. Now that you’re armed with this knowledge, you can decide if CDs at the current rates make sense for a portion of your money – you’re welcome!
Find an experienced financial advisor who believes in diversifying your investments, works for an RIA firm, earns his/her money from fees (NOT commissions), believes in having an abundance of investment choices for clients, and has the heart & demeanor of a teacher, NOT a salesman, and chances are you’ve found the right financial advisor to help you prepare and plan for your financial goals.
For more information, please visit https://www.mfadvisers.com, https://mftax.com, email marty@mfadvisers.com, marty@mftax.com, or call (570) 760-6524.
About MF Advisers, Inc.
MF Advisers, Inc. is a full-service, fee-only RIA firm and fiduciary based in PA & FL specializing in wealth management, investment advice, and financial planning.
With 25+ years of licensed experience, over 10 years of professional education, and an unwavering commitment to improving your financial situation, MF Advisers, Inc. is the advisory firm to best serve YOU.
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