Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

7 of 21
BACK NEXT
7. Make sure your cash is really safe
The whole point of stashing part of your portfolio in cash - that is, in a CD, a bank money-market account or a money-market mutual fund - is to protect it. So there's no reason to expose this money to losses.

Sadly, investors who've been saving in "cash equivalents" have discovered there's no way to grab for more yield without getting a fistful of extra risk.

Short-term bond funds - sometimes used as money fund substitutes - are down more than 1% this year. Ultra-short-term bond funds have lost nearly 3%, partly because of the mortgage mess.

Yet you don't need nontraditional accounts to earn decent yields. With the Fed likely to raise rates soon, money fund yields, now about 1.9%, could climb. Some online banks are already beefing up savings offers. HSBC Direct extended a 3.5% yield, originally set to expire in August, to mid-September.

NEXT: Keep expenses low, low, low

Last updated August 16 2008: 4:37 PM ET
More Galleries
Google's logos through the years Google changed its logo for the fifth time in 17 years this week. Here's what the old ones looked like. More
How much you should have saved for retirement right now Joe is 50 years old and makes $70,000 a year. He should already have $364,000 saved for retirement. Are you on track? More
The stock market's wild week in 6 pictures It was the wildest week in stocks in recent memory. Here's photos and CNNMoney's tweets of reactions to the panicked selling on Monday and Tuesday, which gave way to a mad buying scramble on Wednesday and Thursday. And then...a selloff on Friday again. More

Special Offer