July 21, 2024

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I’m 64 and Received a $50K Inheritance But I ‘Took a Bath’ in the Stock Market Once Before. Should I Put It Into High-Yield Savings?

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I’m 64. I just inherited $50,000. I’m leary of investing it in stocks as I took a bath after 9/11 and saw my $70,000 401(k) cut in half. I have been looking at high-interest savings in digital banks such as CIT bank. But I am concerned about their legitimacy. 


I can understand your concern about both stocks and wanting to be sure a financial institution is legitimate before depositing your money into its products. Fortunately, there are some pretty straightforward ways to check.

Keep in mind: While there are some things you should consider as you work through your decision, the answer that’s right for you will ultimately depend on your risk tolerance and goals. Regardless of your ultimate choice, you’ll want to do a significant amount of research if you plan to do this by yourself – or consult a financial advisor.

Past Investment Experiences and Risk Tolerance

Our past experiences often influence our perceptions and future behavior. Investing is no different. You, like so many others, saw your portfolio value drop significantly as markets fell after the Sept. 11 terrorist attacks. However, your portfolio fell much more than the market as a whole, indicating you may not have been diversified or made some unfortunate timing decisions. I’ve addressed a similar scenario in another recent column you may want to read, but for this discussion we can take it for what it is… a bad experience that has left a sour taste in your mouth for market risk.

If your appetite for risk is low, then holding a less aggressive portfolio is the right choice. That’s because you are more likely to stick with your plan during volatility. If you are invested too aggressively for your temperament then you are likely to abandon your investments at precisely the wrong moment. That may have been partly why your losses were so large after 9/11. You can’t fix that now, but you can prevent it going forward by holding investments you are comfortable with. (And if you’re looking for a…

2023-11-25 12:00:19

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