Are you wondering what to do with your investments while interest rates and yields are low? 

Perhaps the most important tool for investment success is your asset allocation. This means spreading out and diversifying your investments, rather than focusing on one type of investment, or putting money into a single sector, industry, or country. Asset allocation is important because varying types of assets often move differently from one another – when one sector decreases in value, another may increase. Therefore, diversification can minimize your risk of loss and possibly increase your potential for gain. Consider these three ideas to help you in today’s financial environment: 

Your Emergency Fund

Your emergency fund should consist of liquid assets (think money market or cash) equal to three to six months of living expenses. This is crucial because in an emergency you want to avoid pulling funds out of high yielding investments or selling stocks at a low. By leaving money invested, your money can work harder. 

Consider Bonds 

When buying bonds, keep in mind timeframe. You may not want to purchase a long-term bond if it has a low interest rate. Consider diversifying among investment-grade corporate bonds, high-yield, and international bonds. While junk bonds may have a higher yield, there is a real risk of principal. A bond-ladder strategy may be useful in order to take advantage of the relative safety of bonds without locking in low yields for the whole portfolio. Your financial professional can help you create a specific strategy. Watch a video about bond laddering at


In times of low interest rates, investors find stocks attractive because of their potential for increasing wealth. In addition to mutual funds and ETFs (exchange traded funds), which can offer a high level of diversification, spreading out the risk in real estate through REITs (real estate investment trusts) can offer increased income in a portfolio. REITs need to distribute 90% of their income to shareholders as dividends, so they may be able to provide a steady source of income. 

There are investing opportunities. If you need help finding them, be in touch. 

Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.

Published July 28, 2014. Updated December 2020

Read more articles