29. Investment Risk Tolerance, HYSA Interest Rates and Fed Balancing Act
Market MakeHer Podcast
Fixed income: government vs corporate debt
Jess Inskip outlines investment-grade corporate bonds, ratings, risks like credit and interest-rate risk.
What's your investment risk tolerance? (check out the risk pyramid below)
How are you diversifying your investments in your portfolio? Are the interest rates on our high yield savings account coming down?
What should we do with our cash to make sure it's out-pacing inflation?
Figure Out Your Risk Tolerance
There are lots of quizzes you can do at your brokerage firm or even government sites that help you figure out your risk tolerance for your personal situation.
The higher the risk the higher the reward, BUT, remember that also means there's a higher risk to lose your money. Diversifying is key. 😉
Risk Pyramid
High Risk - On Top
Medium Risk - Middle
Low Risk - On the Bottom
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High Risk Investments = Alternative Assets (Options, Futures, and Crypto is the most risky thing you can do with your money)
Medium Risk Investments = Fixed Income (government debt, corporate debt, real estate, blue chip stocks, growth stocks, etc.)
Low Risk Investments = Cash, Cash Equivalents (T-Notes, HYSA, Bonds, Money Markets, etc.) and you can get ETFs or Mutual Funds that have bonds and low-risk securities in them.
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The Fed Balancing Act
Peak of inflation was 9.1% and now we're at 3.2% inflation rate. The Fed's target is always 2% YOY (year over year). It's good to understand how The Fed can change the stock market and the bond market when they raise or lower inflation, as well as how that changes your interest rates.
Think About Your Strategy
What are your plans for your money? How long are you going to keep excess cash or savings in a HYSA or different type of account? What's your plan for having your money out-pace inflation? This is what investing is alllll about!
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Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend, a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We teach complex investing topics in a different way - from "Her" perspective.
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Investing involves risk. There is always potential to lose money when investing in securities. Market MakeHer LLC provides educational content and resources for informational purposes only. We are not registered financial advisors & do not provide personalized investment advice. Consult with a l...
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