From Due Media:



In 2023, cash was the worst-performing investment option, yielding only about 5% before taxes. On the other hand, the S&P 500 Index increased by 26%, the Nasdaq Composite Index soared by 55%, Real Estate Investment Trusts (REITs) increased by 12%, gold posted a 13% gain, international stocks went up by 15%, and tax-free bonds yielded a 6% return.

Many investors held cash as a primary investment in 2023 due to the anticipation of an economic recession, thinking that a 5% yield on cash investments would protect their assets from market fluctuations and uncertainties. However, they overlooked the tax implications of this strategy, which led to significantly lower net returns after taxes, especially for high-income earners.

Diversification is crucial in investing, as it helps mitigate risk and navigate turbulent financial markets. A diversified investment portfolio should include stocks, bonds, and alternative investments, each performing differently under various economic conditions. Seeking the guidance of a financial advisor or firm specializing in portfolio management can help investors balance high-risk and high-return investments, ensuring a well-rounded and responsive portfolio.



Read more: Cash Investments Underperform in 2023