Q. Hey Robert, what can I do to combat low CD rates? I am thankful that they have risen some in the past three years but I still cannot keep up with inflation. When do you think CD rates are going to rise and how much longer do you think the stock market is going to rise? – Matt in Jamestown
A. Matt, the questions you ask are good. I feel we are probably 2 to 3 years away from halfway decent CD rates. This is simply an educated guess on my part. I do not think we are going to see any really good rates for many years, especially while the Federal Government is still struggling with trillions of dollars in debt. Bankrate.com was showing a national CD average rate of 1.36% for one year and 2.06% for 5 years (Accessed on June 19, 2017). Depending on the purpose of the money you have in CDs, there may be alternative solutions that can offer you the potential for higher rates of return. Remember, however, that there are typically trade-offs you will need to consider before purchasing any conservative financial product.
As far as predicting the length of our current market’s rise, that would take a crystal ball. The only thing we can try to do is look at historical trends. Inevitably there will be some type of correction, meaning a downturn in the market. But exactly when that is going to happen is anybody’s guess. One thing to remember is to be proactive now when it comes to Estate and Income Planning, not reacting to a sudden market loss.