It is remarkable how Wall Street was bullish just six short weeks ago, and the major indices were printing all-time highs. That party is over for now, and it’s not just because the president is putting tariffs on foreign products to level the playing field. Now, after a quick correction that drove the Magnificent 7 into bear market status (down 20% from all-time highs), all the major banks we cover, like Goldman Sachs and Bank of America Securities, are adjusting their 2025 price target for the S&P 500. In addition, some of the other firms we cover are sending out the typical “focus on the long-term” letters to nervous clients who have watched the market rise almost straight up since 2022, driven by breakthroughs in artificial intelligence. The stock market is long overdue for a cleansing sell-off, and it may have just started.
The bottom line for baby boomers and retirees who cannot afford a significant market correction or, God forbid, a crash is that now is the time to move a substantial amount of assets to guaranteed investments. We focus on two ideas that are currently the safest. We purposely avoided certificates of deposit (CDs) because, while some do pay monthly, the longer-dated CDs offered by many banks will charge a penalty for early withdrawal of funds. Therefore, if you have an emergency and need to access your money, you may receive less back than you initially invested. Please make sure the terms are clear if you decide to purchase one.
Exchange-Traded Treasury Bill Funds
Unlike open-end mutual funds, exchange-traded funds (ETFs) trade on major exchanges like stocks. They own financial assets, including stocks, bonds, currencies, debt, futures contracts, and commodities such as gold bars. One significant advantage of ETFs is that they can be bought or sold at any time the market is trading. Additionally, there is a substantial market and significant demand from investors for exchange-traded funds.
One of the funds we highly recommend at 24/7 Wall St. is the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE: BIL | BIL Price Prediction). The fund invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in securities that the adviser determines to have economic characteristics substantially identical to the financial characteristics of the securities comprising the index. The index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to one month and less than three months.
The State Street website says this when describing the fund:
- The SPDR Bloomberg 1-3 Month T-Bill ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg 1-3 Month U.S. Treasury Bill Index
- Seeks to provide exposure to publicly issued U.S. Treasury Bills that have a remaining maturity between 1 and 3 months
- Short-duration fixed income is less exposed to fluctuations in interest rates than longer-duration securities
- Rebalanced on the last business day of the month
The fund currently pays a 4.92% yield and a monthly dividend/interest payment of $0.3828. Investors should be aware that the price of the ETF will decrease by that amount when the dividend is paid. However, at $91.47 at the time of this writing, the decrease is a fractional amount each month.
With a tiny 0.14% expense ratio and daily liquidity, it is ideal for those who can’t afford a significant loss of principal.
High-Yield Money Market Funds
A high-yield money market fund, also known as a high-yield savings account (HYSA), is an investment that aims to generate income while maintaining a relatively stable and liquid principal. It is considered a low-risk investment and can have higher interest rates than savings accounts. Money market funds invest in short-term securities, such as government securities, commercial paper, and corporate debt.
They are intended to be safe and not lose value. Best of all, you can withdraw cash from a money market fund without penalties. In addition, they pay interest monthly and are insured by the FDIC up to $250,000.
Here are the rates from some well-known companies that we recommend:
- American Express High Yield Savings: 3.70%
- PNC Bank High Yield Savings: 3.95%
- CIT Bank Platinum Savings: 4.10% on balances of $5,000 and more
Why J.P. Morgan’s High-Yield Dividend ETF Is the Safest Way to Stay Invested Now
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