Another Reason to Rethink CDs: Understanding Real Returns
Rethinking Certificates of Deposit
Many investors view certificates of deposit (CDs) as a safe investment choice, but recent findings suggest a closer look is warranted. Over the past two decades, a striking trend has emerged where one-year CDs generated negative real returns in 17 out of 20 years. This reality raises questions for those who place CDs in their investment strategy.
Understanding Fixed Income Options
- Annuities offer alternative options for fixed income.
- Considering corporate bonds can diversify risk and potentially enhance returns.
- Fixed income funds often yield better outcomes than CDs.
- Money market funds exhibit less volatility and reasonable returns.
Insights from Major Players
Investment firms like Goldman Sachs Group Inc., Synchrony Financial, and American Express Co. could offer better insights for savvy investors. Meanwhile, new entrant Bread Financial Holdings Inc. shows promise in adapting to present challenges.
Evaluating Economic Events and Market Impact
The current economic climate influences stock markets and personal finance decisions. As SLM Corp. and other firms adapt their strategies, understanding these dynamics could guide investors towards better options in this evolving landscape.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.