Investing, at a Time like This?

In the wake of an economy in the midst of incredible upheaval, many people are wondering if they should still consider investing their money in a vastly weakened stock market. If you talk to stockbrokers, they're likely to tell you not to sell your existing stocks, and to buy since stocks are currently quite low. Conversely, other 'experts' may advise you to take of all your money out of the markets and not invest at all. Who's right?

Frankly speaking, they both are. While you may have had quite a bit of money invested in the stock market and lost most of it, the truth of the matter is that when the market rebounds, you may likely see a very good return on your continued investment. Furthermore, some economists are of the opinion that selling your stocks will simply make matters worse. With the stock market's current volatility, many agree that it's best to just sit tight and wait things out. Or, for those that can still afford to invest in the stock market, now may be as good a time as any to find great deals.

Additionally, the American Association of Retired Persons (AARP) has a few suggestions of its own, as listed here:

  • Open a money market account (MMA) at your bank and link it to your checking account to allow for online- or telephone transfers. From that point on, make all of your deposits into the MMA where they'll immediately start drawing interest.
  • Never deposit any of your income directly into your checking account. The idea is for as much of your money as possible to be kept at work drawing interest from the moment that you receive it. Keep only a minimum necessary balance in your checking account and make transfers as needed by phone or online to cover any checks that you've written.
  • A check of most banks today will likely show find that basic savings accounts are paying less interest than the rate of inflation. As such, a savings account will actually lose money when inflation is factored in. Instead, put your money into an account that will pay you a higher rate of interest. An MMA will typically pay more interest than a standard savings account, and will still allow you to withdraw your money on demand.

These suggestions are very important considering the fact that obtaining the best rate of return on your money is one of the core criteria necessary to survive this financial crisis. Although many individuals may not have considered the notion of transferring funds to a money market account, it does seem appropriate at this time. Research several banks in your area to determine their MMA rate offerings, and then compare them to the accounts at your current bank. Be sure to inquire about any fees that may be associated with the account, as well as other concerns that you may have. Remember, the name of the game today is not only securing your money, but also gaining additional interest at a time when every penny counts more and more.

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