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Given the way interest rates are tanking in old fashioned savings accounts, a certificate of deposit can be an attractive and secure interest-bearing alternative.
Depends what your needs are for this money. If it for short term savings, that’s fine. But if were are talking long-term, I wouldn’t put too many dollars in “guaranteed positions” due to the confiscation of buying power that inflation will rob from you over time. It would be like buying a stock you plan on holding for many years that is guaranteed to lose value – how many shares would you buy?
Roland: This is amusing that stocks (or other asset classes) will gain more (or lose less) value over long periods of time. I agree (and want to believe) that this is the case, but if it’s not, then losing some value is better than losing tons of value.
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