07 Sep We sold our stocks. What should we do with the money?

Q. We sold our stocks when the market tanked. Our money is now making .01% interest but at least my husband can sleep now. A broker has offered certificates of deposit (CDs) with a 2.5%+ rate. We are retired and in our mid 70s. Any advice on moving forward?
— Investor

A. There’s a lot we don’t know about you.

How you invest this money has a lot to do with your overall financial picture.

The most important aspect of financial planning is your well-being, and no one wants to see you anxious, said James Suazo, a chartered financial consultant with Baron Financial Group in Fair Lawn.

He said you need to ask yourself a series of questions.

First, will you need these funds to support your lifestyle within the next year? If so, you may want to consider keeping these funds in cash, he said.

Next, do you have a financial plan in place?

“Having a financial plan is beneficial in many ways, most importantly, it can provide peace of mind knowing you have planned for various outcomes,” Suazo said. “The financial planning process will help determine how much cash you should keep available to reach your goals in retirement.”

Then, how much risk are you willing to take?

Suazo said now that you sold your stock, you should consider your willingness and ability to take risk.

“Having a systematic approach to investing helps keep emotions out,” he said. “Market timing can be very difficult because one needs to be right on both sides, when to exit and re-enter the market.”

Finally, CD rates have gone up.

“If you don’t think you will need the funds soon, a CD could be a great option for a stable investment as you consider your next move,” he said. “This way your money is generating some return and that could provide some relief.”

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This story was originally published on Sept, 7, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.