Saving for a house

Q:

I’m saving to buy a house in a few years. How should I invest that money? — P.W., Carmel, Ind.

A:

Not in stocks, unfortunately. The stock market is arguably the best way to grow your wealth over the long run, but in the short run, anything can happen—such as a market crash at an inconvenient time, forcing you to postpone your purchase.

Park short-term savings — money you’ll need within five years (or even 10 years, to be more conservative) — in safer places, such as bank accounts, certificates of deposit (CDS) or money market accounts. You can find good rates for such accounts at our sister site, Theascent.com.

Q:

What, exactly, are “tech stocks”? — H.G., Santa Fe, N.M.

A:

When many people hear the term “tech stocks,” they probably imagine companies such as computer hardware manufacturers, semiconductor specialists and software companies. But these days, many, if not most, companies employ a lot of technology in their operations.

Airlines, for example, rely on very technically complex machines and employ fancy software to manage their logistics. Banks may seem like old-fashioned businesses, but there’s a lot of technology behind the scenes as millions of transactions are processed electronically, and consumers are shifting to banking online. Even Nike has recently introduced technology (“Nike Fit”) that measures your foot electronically and recommends the correct shoe size for you — in its stores or via an app. Some companies are even 3D-printing shoes.

The energy industry uses technology to produce solar power and search for oil, among other things. Retailers use technology to track their inventory and remain stocked. Some are even using robots in warehouses. As you can see, “tech stocks” isn’t a particularly distinctive term anymore.