Market MakeHer Podcast

29. Investment Risk Tolerance, HYSA Interest Rates and Fed Balancing Act

Mar 15, 2024
Explore your investment risk tolerance with insightful tips on navigating the risk pyramid. Understand how falling interest rates affect high yield savings accounts and the impact of inflation on cash holdings. Discover diverse investment strategies, from low-risk options like cash equivalents to high-risk assets such as crypto. Learn how the Fed's monetary policies play a crucial role in shaping market dynamics and what steps to take for your cash to effectively outpace inflation.
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INSIGHT

Fed Moves Drive Cash Yields

  • The Fed's decisions on interest rates drive short-term yields and HYSA rates.
  • Understanding the Fed's timing clarifies when cash yields will fall or rise.
ADVICE

Don't Let Cash Lose Purchasing Power

  • Do not rely on HYSA rates forever because inflation erodes cash value.
  • Move excess cash into assets that can outpace inflation over the long term.
ADVICE

Lock Short-Term Rates With Treasuries Or Funds

  • If you need short-term liquidity, consider locking yields on shorter-term Treasuries or bond funds.
  • Use bond ETFs or mutual funds to gain exposure without buying individual bonds.
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