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Courtesy Jen Glantz
- During the pandemic, I tried out trading stocks for the first time, and it went poorly.
- The stocks I bought were basically random, and I wasn't able to give my portfolio close attention.
- I pulled my money out and put it in a CD with a 5% APY, and I'm happier with the guaranteed return.
During the pandemic, I made one of the riskiest financial moves I had ever made in my life. For the first time ever, I decided to take money out of my savings account and put it in the stock market.
Irresponsible buying decisions and a lack of attention on my stock portfolio caused me to lose thousands of dollars over the past few years. That's why in 2023, my goal was to try to fix my investment strategy and eliminate risk.
To do that, I decided to take money out of the stock market and put it into some of the best CDs instead. Here are the three reasons I'm glad I made that choice.
1. I had been investing in individual stocks
As a rookie investor in 2020, I decided to take money out of my savings account and buy random individual stocks. I didn't have a strategy or any professional advice. Instead, I bought stock in companies that I liked or listened to advice from friends, who were always new to investing in the stock market.
I treated my stock portfolio like it was a game and the money I was putting in wasn't real. I didn't research companies, buy index funds, or attempt to diversify the types of stocks I was buying.
Because of that, my results weren't good and my risk was very high. Since my initial lack of strategy had failed me, I decided that keeping the money in these declining stocks wasn't going to benefit me. Instead, putting the money in a 5% APY one-year CD would at least help me inch back closer to my initial investment three years ago.
2. Trading stocks required more attention than I could give
I spent the last few years watching the individual stocks I bought rise and fall. I didn't sell any of these stocks when they were high or low. Since I wasn't paying frequent attention to the market, I didn't have a pulse on my stock's performance or the timing of when it was up and I could sell.
Since some of the stocks reached an all-time high a few years ago and have been declining since, I felt like I had missed my opportunity to sell. Instead of hoping for a future payday, I decided that some of that money would benefit me by sitting still in a CD that will earn me 5% APY, guaranteed, in just one year.
3. I wanted to reset my investment strategy
When I first invested in the stock market, my goal was to buy individual stocks as a long-term investment. But since my stock picks were random and my portfolio wasn't diversified, I realized that the odds of me making money in the future with this current strategy was very low.
I felt like I needed a big financial reset this year and decided to switch up my investment strategy. Instead of focusing so much on long-term investment goals, I wanted to utilize short-term investment goals to help me recoup some of my lost money first.
My plan was to take some money out of the stock market and grow it in 5% APY CDs and then reinvest the money made on the CDs next year in a more thoughtful long-term stock market portfolio.