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Question:


What kinds of short-term investments are smartest in a marketplace characterized by low interest rates and a volatile stock market?
-Malik_B


Answer:


“Short-term investment” reads like an oxymoron. Investing is something done for the long haul, as financial planners are always reminding their clients. If you’ll need access to your money soon, you may have to settle for market interest rates that are running around 1 percent a year on savings and some checking accounts.
 
The picture changes if you’ve got debt through a home-equity credit line or if you own stocks or bonds on margin. Any money that you can park in the relevant bank or brokerage account will bring down the balance of what you owe for as long as it’s in there, saving you interest at whatever rate you’re paying, no doubt a lot more than 1 percent.
-Conrad de Aenlle



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