If you have a small amount of untouched money in savings, which would be better: investing in CD's or investing in the stock market? It seems like the rates for CD's are pretty low right now, however, sometimes investing in stocks can be a gamble. How do you go about starting to invest money in the stock market? Which option would you prefer?
When it comes to investing, nothing's really set in stone. It's all a matter of strategy and research. As you said, CD rates are low at present while investing in stocks entails more risks. Just my two cents but you can actually invest in both. If your available capital can only accommodate one investment at a time then stocks would have to take precedence. However, keep your capital to a minimum. Think big only if you're ready to gamble that much. Good luck!
Investing in the stock market doesn't have to be a gamble do some research and buy the "right stocks." Currently though since the market is very volatile it wouldn't be the right time to invest. So though the rates for CDs might be low at the moment, it is a safer bet. Once the markets stabilize you should think of investing in the stock market.
Neither is necessarily right or wrong - it just depends on the purpose and your life situation. CDs are good for shorter timescales when you know you're going to need a certain amount of money at a certain time. You're not taking on that much risk, which is why the returns won't be great. And if you held CDs for years in principle you are effectively likely to lose money because of inflation. For stocks, you have to accept that there is more risk associated for the opportunity to get a higher return. Because of that, time is usually your friend because it helps to smooth out the volatility of the investment's performance. More so than CDs, it helps to know what you are doing and learn about the mechanics of investing. Not all stocks are created equally.
