Investing your cash as interest rates drop
Over the past several years, rising rates offered investors exceptionally high returns on cash. With rates now dropping, consider these moves before they decline further.
“IF YOU HOLD TOO MUCH CASH in your portfolio, that could potentially come with some risks,” says Matthew Diczok, head of Fixed Income Strategy, Chief Investment Office, Merrill and Bank of America Private Bank. That’s especially true now that the Federal Reserve has begun to cut interest rates.
In the video above, he and Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, offer tips to help you recalibrate your asset allocation in this lower rate environment. They also discuss what’s behind the cut, how many more might follow and the potential impact on the economy, markets and investors’ portfolios.
For more on the topic, read “How much is too much cash in your portfolio?” and for the latest developments, tune into our regular Market Update audiocasts.
Important disclosures
The opinions expressed are as of 9/19/2024 and are subject to change.
Investing involves risk, including the possible loss of principal.
Past performance is no guarantee of future results.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets. Equity securities are subject to stock market fluctuations that occur in response to economic and business developments. Bonds are subject to interest rate, inflation and credit risks.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).
