With the turmoil in the financial markets many people are wondering what they should do with their money. I don’t know what you should do with your money but I can tell you what I am doing. I just invested a little more in my Roth IRA which is 100% invested in a value stock mutual fund. I figure if the stocks were undervalued before they should really be undervalued now. It is a bit disconcerting to see my balance go down but I have faith that the market will eventually rebound. On the theory that stocks are cheap right now I hope to max out my IRA before the end of the month if I have enough cash flow.
If you’re worried about safety than putting your money in an online savings account is a safe way to go. As long as you put your money in an FDIC insured account you’re protected up to $100,000. This is a case where less risk doesn’t lead to less return when you compare them to money market mutual funds. The Reserve money market mutual fund recently broke a buck causing investors to lose part of their principal and the fund is paying less than 2%. In an online savings account such as FNBO Direct you don’t have to worry about losing your principal and it pays 3.50% APY. Why would you invest in a money market mutual fund?
I’ll end with the standard disclaimer. I’m not a financial professional and I’m not advising you how to invest your money. I’m just telling you what I am doing with my money.