Exploring Alternatives: Diversifying Investments for Cautious Investors

Cautious investors looking for stability and income may want to consider active management and fixed income strategies instead of relying solely on high-yield savings accounts. According to SPDR Exchange Traded Funds' Matthew Bartolini, active fixed income within ETFs can provide consistent performance, improved tax efficiencies, and better forward-looking returns. However, Bartolini warns that higher returns come with higher volatility, and cash carries its own set of risks, such as reinvestment risk. Dan Egan of Betterment also highlights the challenge of convincing investors to move away from cash, given the perceived safety of FDIC-insured accounts.