2 Places To Put Your Money if the Stock Market Freaks You Out Right Now

When the stock market takes a dive — or even just wobbles — it's normal to feel uneasy. For investors who are nearing retirement or who are simply risk-averse, market turbulence can feel more like a threat than an opportunity.

The good news? You don't have to invest in stocks if it's keeping you up at night. If your main goal right now is to eliminate some money stress, here are two alternatives to stocks.

The pros of cash

Cash may not be flashy, but it offers liquidity and stability.

Keeping money in a high-yield savings account, money market account, or certificate of deposit (CD) allows you to earn modest amounts of interest without suffering the ups and downs of the stock market.

These accounts are also federally insured by the Federal Deposit Insurance Corp. (FDIC) for up to $250,000 per depositor, per bank.

One of the biggest benefits of holding cash is how easy it is to access. Whether you need to cover a medical bill or jump on a once-in-a-lifetime travel deal, your money is there — no selling or waiting period required.

You also avoid the risk of having to sell investments during a market dip simply to raise cash, which can lock in losses.

The cons of cash

The biggest downside to holding cash may be that it puts you at risk of the ravages of inflation. When prices rise faster than your cash earns interest, you're effectively losing buying power over time.

Even with today's higher interest rates, the returns on cash won't help much if your goal is to build long-term wealth. For those thinking more than a few years ahead, cash is better used as a complement to other investments, not as a full replacement for them.

Cash can help with short-term planning

If you know you'll need money within the next six to 12 months — such as for a home down payment or a big purchase — cash can be one of the smartest places to keep it.

The market could easily dip before you're ready to withdraw, and locking in a short-term loss could derail your plans. Keeping those funds in cash avoids that risk entirely.

However, that doesn't mean you should keep all your savings in cash. Once your short-term needs are covered and your emergency fund is full, you might want to look for higher-return opportunities for your longer-term goals.

The pros of gold

Gold is often seen as a safe haven in times of economic uncertainty, and with good reason: It tends to hold its value well when the market falls.

Many investors turn to gold because it often moves in the opposite direction of stocks. When markets drop or inflation spikes, gold often rises.

It's this counterbalance that makes it attractive in a well-rounded portfolio. Some even use gold to protect against currency devaluation, especially during periods of political or financial instability.

Additionally, the price of gold has been on the rise lately.

The cons of gold

However, gold also has some drawbacks. It doesn't generate income like stocks or bonds, and its price can be more volatile than you might expect.

Historical performance shows that gold is far from foolproof. Its price is influenced by global supply and demand, investor sentiment, and geopolitical events, all of which can be unpredictable. Gold is best viewed as a defensive tool, not a growth engine.

Storage and insurance costs for physical gold can add up. Even if you invest in gold through ETFs or mutual funds, you may be exposed to market swings.

Gold can be a valuable addition to a portfolio

While gold is often touted as a store of value, it can be surprisingly volatile in the short run.

Prices may spike on news of geopolitical unrest, then fall just as quickly once the panic fades. That kind of volatility can be nerve-wracking, especially if you're looking for predictable returns.

Still, gold can play a strategic role as part of a diversified portfolio, especially during uncertain times. If you choose to invest in gold, you may want to think of it as part of a long-term risk management strategy.

Bottom line

When stocks feel too risky, it's natural to look for safer alternatives. Cash and gold may offer more security.

Each has strengths and tradeoffs, but together they can provide a solid base while you reassess your risk tolerance and goals.

Using options like high-yield savings accounts or gold ETFs can help you protect your wealth and prepare yourself financially for whatever comes next.