Bank Certificates vs Stocks
Certificates or stocks? Certificates pay a fixed, nominally-guaranteed yield (~19-21.5% a year) with near-total capital safety, but the real return erodes with inflation. Stocks carry more risk but have historically out-returned certificates over the long run and hedge inflation better. Rule: need short-term liquidity and safety? Certificates. Have a 3+ year horizon and can stomach swings? Allocate a slice to stocks.
FAQ
Bank Certificates or Stocks?
Certificates or stocks? Certificates pay a fixed, nominally-guaranteed yield (~19-21.5% a year) with near-total capital safety, but the real return erodes with inflation. Stocks carry more risk but have historically out-returned certificates over the long run and hedge inflation better. Rule: need short-term liquidity and safety? Certificates. Have a 3+ year horizon and can stomach swings? Allocate a slice to stocks.
Can I combine both?
Yes. Holding different assets is called diversification: each one moves differently, so the risk is spread instead of sitting in a single asset. The right mix differs from person to person, depending on goals and horizon.