“They have very different purposes in what you’re trying to do in your life,” Clark says.
How Series I Savings Bonds Work
Series I Savings Bonds, which you can buy through the U.S. Treasury Department website, are great vehicles for parking your cash for a specified time. "The Series I Savings Bonds are a savings tool," Clark says.
These savings bonds allow you to earn two interest rates: a fixed rate and a rate that changes with inflation. Twice a year, the Treasury adjusts the inflation rate for the following six months.
Series I Savings Bonds are currently offering a total interest rate of 9.62%. To lock in that rate, you'd better hurry: It's set to change on bond purchases made after October 28, 2022, according to the Treasury Department.
How the Stock Market Works
The stock market works by facilitating a platform in which companies can list shares of their stocks on a public index. Investors can buy, sell and trade those shares, which helps the companies grow their businesses.
Clark says even though the market may experience a downturn from time to time, his philosophy is to stay the course.
“The money you have in the stock market is investing for the long term,” Clark says.
Should I Keep My Money in the Stock Market Right Now?
Barring some unexpected catastrophe, Clark says the worst may be behind us when it comes to plunging stock prices. His advice to the podcast listener applies to many others as well:
“If your time horizon is measured in a decade or more, ride this out,” Clark says. “Ride the market down as far as it goes, because the recovery going forward, you don’t want to miss.”
Clark says during the 2009 recession, the market plunged astronomically, causing many investors to sell out. Ultimately, they missed out on an enormous return when the economy rebounded.
“Returns over the next decade aren’t going to be like the last decade. There are so many unique factors that led to the enormous increase in value, but still, you don’t want to miss the ride back up,” he said.
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