When investing your hard-earned cash, there’s often a trade-off between returns and volatility. Low-volatility assets–like bonds and money market funds–offer modest returns compared to investments like stocks or crypto, which can experience significant fluctuations in price.
Both types of investments, however, have a place in a diversified portfolio. Since the Fed raised its benchmark rate significantly in the past year and a half, cash equivalents like certificates of deposit (CDs) and fixed-income investments like bonds offer higher interest rates, making them more appealing to investors.
