As Hurricane Sandy bears down on much of the east coast Monday morning, many major businesses have halted operations for the day, including the New York Stock Exchange (NYSE) and NASDAQ.
While the stock exchanges only expected to halt floor trading, online trades have also stopped. The good news is if you are trying to find out where to invest money today, there are other places to turn.
Hurricane Sandy Shuts Down Stock Trading
Hurricane Sandy is making headlines this morning, not simply because it has been labeled a “Frankenstorm” due to its hybrid mix of storms, but because it has managed to shut down the New York stock market for the first time since September 11, 2001.
The Category 1 hurricane has already claimed the lives of over 60 people in the Caribbean. With New York being a prime target for the worst of the storm by Monday evening, Governor Andrew Cuomo shut down New York City’s subways and buses on Sunday.
Hundreds of thousands of residents near water were forced to evacuate and public schools along with government offices closed on Monday. The NYSE, as well as the New York Mercantile Exchange (NYMEX), NYSE Euronext and NASDAQ were quick to follow suit.
Where to Invest Money with NYSE Closed
With all trading halted in New York City on Monday, and possibly Tuesday, some may be wondering where to invest money aside from the stock exchanges. Here are a few options to consider:
- Certificates of deposit (CDs): A certificate of deposit is an investment tool that allows financial institutions to borrow funds for a predetermined period of time (typically six months to five years) while paying back interest to the investment. Since CD funds are not liquid, institutions pay higher interest rates than savings accounts, though they are just as easy to open at a local bank or credit union. CDs are deemed low-risk investments because they are federally-insured for up to $250,000.
- Money markets: Money markets are investments that allow individuals to buy shares; however, these shares are safer than stocks because they rarely fluctuate. Unlike CDs, which offer higher interest for investing money over a longer period of time, money markets reward individuals who invest larger sums of money. Money markets also offer liquidity through a checkbook, making them similar to checking accounts. Funds added to a money market account are federally insured for up to $250,000.
- Life insurance annuities: Many people don’t consider life insurance as an investment option, but with a life insurance annuity, you can invest premium payments on a tax-deferred basis. Later in life, those premium payments are returned to you in increments or a lump sum.
While many banks and insurance companies along the east coast are likely closed today, individuals living in other parts of the country may be able to invest using these avenues while waiting for the stock exchanges to reopen.
Photo: Kevin Hutchinson