Cash Alternatives – T.I.A.R.A
So far, 2022 has been a challenging year for both stocks and bonds. The Fed continues to aggressively raise its benchmark interest rate to combat inflation, leaving markets scrambling to adjust.
However, higher interest rates do offer some good news for savers.
With near zero rates for more than a decade, savers felt forced to choose: either earn nothing on cash or stretch for yield in more risky asset classes. The acronym for this has been T.I.N.A (There is No Alternative).
In this video, Ryan and I talk about how rising rates have finally pushed yields up in online savings accounts, money market mutual funds, and government bonds. Perhaps now we have T.I.A.R.A (There Is A Reasonable Alternative).
Cash and cash equivalents are always the right choice for short-term needs in a strong financial plan providing an emergency fund, retirement cash reserve, or opportunity fund.
However, it pays to be diligent about where you’re keeping your cash, as most brick-and-mortar banks have NOT adjusted their yields higher.
Enjoy my discussion with the incomparable Ryan Triplett.