Investing

Elon Musk Says the Storm Is Coming and to Stash Cash: The Top Low-Risk Cash Ideas for 2023

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Last year was the proverbial train wreck meets the dumpster fire. All the major indexes closed lower to end 2022, with the Nasdaq leading the way. The tech-heavy index closed down a stunning 33% last year, while the S&P 500 barely dodged bear market status by closing 19.44% lower. The Dow Jones industrials fared the best, down 8.82%. It marked the worst year for stocks since the 2008 financial crisis.

So things look like they will be getting better in 2023 right? Well, perhaps not, according to Elon Musk. The Twitter and Tesla chief executive and principal owner said that he feels that the next 18 months could be very rocky, and he advised investors to hoard cash and keep their powder dry.

While good advice, as interest rates likely are close to the top, they probably still are going higher. Inflation, which appears to have peaked, is also still at a very disruptive 7% year-over-year rate. That is not good for most of us, who likely did not get a 7% raise to cover the increase in prices.

Many strategists on Wall Street are in the same camp as Musk, and most think we do indeed have a recession emerging. However, many feel that the second half of 2023 could be the turning point for stocks and the economy, instead of Musk’s 2024 prediction. While the advice to hoard cash is solid, it is a lot easier for one of the richest men in the world than for the average investor.

We decided to look for cash-related ideas that could be helpful to those who want to play it safe after a wretched 2022 but who may want to have liquidity so they can be ready to get in the game when the market looks like it is ready to bounce back. With rates on the short end the highest in years, conservative investors finally may have hit the perfect storm jackpot.

American Express High-Yield Savings

Insured up to $250,000 this is one of the best ideas for investors seeking safety and liquidity, and the ability to move funds in and out (with restrictions) between the American Express account and a personal checking or savings account. Yielding a very solid 3.3% with no charges to investors, this is an outstanding cash idea for those seeking to preserve capital while getting a competitive interest rate yield.

Short Maturity U.S. Treasury Securities

Buying U.S. Treasury debt is another very solid idea now, but this is not as easy as buying high-yield savings accounts. Investors looking to own government securities likely will need a brokerage account, and a broker who knows how to put in orders for Treasury debt. With that in mind, look at the current yields now. These are the closing prints for 01/03/2023.

  • 3-month: 4.37%
  • 6-month: 4.78%
  • 1-year: 4.75%
  • 2-year: 4.40%

It is important to remember that the T-bill securities with maturities of a year and less are bought at a discount and accrue to the par pricing on expiration, while the two-year note pays dividends every 6 months.

Short-Maturity Treasury and Government Debt Mutual and Exchange-Traded Funds

For those looking to own short government debt, we found these top exchange-traded funds, which may or may not have the ability for investors to reinvest dividends.

  • SPDR Portfolio Short-Term Treasury ETF
  • Vanguard Short-Term Treasury ETF
  • Schwab Short-Term US Treasury ETF
  • iShares 1-3 Year Treasury Bond ETF
  • iShares Agency Bond ETF

Top investment companies like Vanguard and Fidelity also have highly rated mutual funds that trade on a closing price basis, which for some investors make more sense as the volatility may be lower as hedge funds and fast money investors tend to trade the ETFs more than the old-school open-end mutual funds. Plus shareholders almost always can reinvest dividends and any capital gains to buy more shares rather than take the income.

  • Vanguard Short-Term Federal Fund (VSGBX)
  • Fidelity Spartan Short-Term Trust Bond Index Fund (FSBIX)
  • Baird Short-Term Bond (BSBIX)
  • PGIM Short-Term Corporate Bond (PSTQX)
  • Vanguard Short-Term Corporate Bond (VSTBX)


There is an alternative for investors looking for the highest interest rates but who are comfortable with, in some cases, longer holding periods. Typically certificates of deposit (CDs) may have a longer (but not always) maturity, but in most cases they can pay higher yields than money market savings. However, should you need to cash out before maturity, there is often a penalty and, in some cases, pretty severe ones at that. We found five short-maturity CDs that look like great ideas now. Again, this was from reliable sources, but these may have changed.
  • Capital One: 4.15%. No minimum deposit, one year.
  • Marcus from Goldman Sachs: 4.30%. $500 dollar minimum, one year.
  • Bask Bank: 4.45%. $1,000 minimum, one year.
  • CIT Bank: 4.55%. $1,000 minimum, 13 months.
  • Synchrony Bank: 4.60%. No minimum, 14 months.


The reality now is that we remain in very difficult times, and another $1.7 trillion omnibus spending bill passed recently will push the total United States debt to nearly $33 trillion. That kind of profligate spending is what already has pushed inflation to the highest levels in 40 years, and a continuation of this kind of reckless spending likely will support higher inflation for years.

The good news is that worried investors can hunker down, move their money to the highest-yielding short-term investments in almost 20 years, and wait for an opening in the equity markets for a good entry point. For conservative investors looking for income and safety, now is the best of both worlds as short-maturity money pays very well.

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