By nature, emergencies are unpredictable. That’s why it’s so important for your emergency savings to be readily accessible when you need fast access to cash. Yet, many people “lock up” cash and short-term savings in time-deposit accounts such as certificates of deposit (CDs), many of which carry stiff penalties for early withdrawals. In fact, some impose up to six-months interest penalty charges.
As investors seek higher returns on cash, it’s important to understand that any financial instrument can invite unwanted risk if your financial assets aren’t properly allocated based on your personal needs. Early withdrawal penalties associated with time-deposit accounts can be costly, potentially wiping out all or a portion of earnings. Likewise, selling longer-term investments like stocks or bonds at an inopportune time to raise cash to support short-term living or emergency expenses can quickly derail your financial strategy.
A comprehensive approach to investment management can help you avoid these situations and remain on track toward your goals. By thoroughly assessing your short- and long-term financial goals, spending needs and tolerance for risk, we can work together to put an asset allocation strategy in place aligned with your income needs and lifestyle preferences.
To learn more, reach out today to schedule a consultation to talk about strategies for managing financial risk.
This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought. Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss.
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