The Best Places to Park Your Short-Term Investments

Plus, where should investors stash their safe money today, does Apple savings account live up to the hype, and more. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=45363&elqTrackId=fded9de3ce124ca290e8d50593c6ea24&elq=7d3c9118b32d462da02cd23c1b68ea5e&elqaid=45363&elqat=1&elqCampaignId=22135) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] [Cash investments have been selling like hotcakes in 2023](. That owes to the Fed’s campaign to lift interest rates, of course, as well as the inverted yield curve, which means that short-term securities are paying higher yields than longer-term ones right now. During the ultra-low-yield environment that prevailed for the past decade, most investors were probably reticent to shop around for higher payouts; it’s hard to get excited about the difference between 0.10% and 0.05%, after all. With today’s higher overall interest rates, however, the yield differential among various cash vehicles has grown more stark. At the same time, the highest-yielding options usually come with some strings attached—either they’re not FDIC-insured (money market mutual funds) or there are strictures on your withdrawals (certificates of deposit). [To home in on the best cash options in your situation]( it’s useful to consider all three elements: yield, safety, and liquidity—and determine which you value. I also appreciated [Michael Kitces’ helpful discussion of how to think about your cash holdings](. In a related vein, [Amy Arnott’s recent look at Apple’s newly launched savings account]( merits a look. She notes that its yield is competitive, but it’s not hard to identify higher-yielding alternatives. If you’re ever inclined to get “tactical” with your portfolio—for example, to switch into cash when storm clouds are gathering over the market and back into stocks when they recede—Jeff Ptak’s recent assessment of the universe of tactical mutual funds should give pause. As a follow-up to [some recent research about whether fund managers have managed to add value with their trading]( (TL;DR—they have not), Jeff’s latest piece indicates that tactical fund managers would have earned higher returns if they had left their portfolios untouched versus monkeying with them. The lesson from all of this, I think, is that a policy of benign neglect often beats an investment policy that’s too busy and active. That’s true for us individual investors, and it seems to be true for the pros, too. Speaking of the pros, my colleague Adam Fleck and I recently had [the opportunity to chat with legendary manager Joel Tillinghast]( who has capably steered Fidelity Low-Priced Stock for the past 35 years. Tillinghast is one of the most celebrated fund managers of his generation, but one of the most striking aspects of our conversation was his humility—his willingness to admit past mistakes and acknowledge the contributions of others. As a Boglehead, I don’t dole out praise to active managers willy-nilly, but it’s hard to not be impressed by this manager’s capable stewardship of a giant fund. With warm regards, Christine Benz [Can You Recession-Proof Your Portfolio?]( Be sure to have some exposure to one asset class in particular. [Watch Now]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [U.S. Fund Flows: Widespread Outflows Defined March]( Investors fled stock funds for safer choices. [Read More]( [The Best Places to Park Your Short-Term Investments]( Yields are important, but so are liquidity considerations and guarantees. [Read More]( [Where Should Investors Stash Their Safe Money Today?]( Financial planning expert Michael Kitces shares a framework for balancing yield and safety in investors’ cash holdings. [Watch Now]( [Does the Apple Savings Account Live Up to the Hype?]( How it works and what it yields. [Read More]( [How Can Active Stock Managers Improve Their Funds' Performance? By Taking a Vacation—a Long One]( Active large-cap funds would have generated better risk-adjusted returns over the past decade if their managers'€™ hadn'€™t traded their holdings. [Read More]( [Joel Tillinghast: The Art of Investing]( The legendary Fidelity manager discusses his biggest investing mistake, the implications of AI for portfolio management, and how private equity affects investors in public securities. [Listen Now]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602