Some advisers are encouraging people to take 10 or 20 percent out of their stocks and put it in an interest-bearing savings account. What do you think?
Tim Hanson, senior analyst at the Motley Fool: That depends on when you need the money. If this is cash that you've had in the stock market but that you need to pay your bills over the next 12 to 36 months, then yes, put it in a savings account or in something like TIPS. You need to make sure it's there when you need it. (Incidentally, that money should never have been in the stock market in the first place.)
But if this is money you're saving for a retirement that's five or more years away, then I would keep it in the stock market and take advantage of current volatility to upgrade your portfolio. That means adding new money to the market and reallocating your portfolio into the best-priced, strongest names.
October 8, 2008; 7:00 AM ET
Categories: Your Pocketbook | Tags: investing, stocks
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Posted by: Steve | October 21, 2008 11:28 AM | Report abuse
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