Everyone has heard about the bulls and the bears. But what about the "chickens"? What do you do with money that you don't want to lose, or can't afford to lose? Here are five things you should know about "chicken money."

Safety first

The safest short-term investment in the world is U.S. Treasury bills, where rates are set at multibillion-dollar weekly auctions. In times of fear, global money rushes to buy T-bills, pushing the auction yields down. Any short-term investment that yields more than T-bill rates involves more risk.

Stay short-term

Ultra-safe investments are limited to short-term FDIC-insured money market deposit accounts or bank CDs. You can buy U.S. Treasury bills directly from the government at those weekly auctions in minimum amounts of $100. Money market mutual funds also offer short-term safety and liquidity. But choose one that buys only short-term U.S. Treasury securities.

Don't stretch for yield

If you tie up your money for a longer term, you'll get a higher yield — but at some extra risk. If you buy a five-year, FDIC-insured CD, you could be stuck in a low yielding account if rates suddenly rise. Or you would pay a penalty to break out of that CD early to invest in something else.

Understand the risks

The S&P 500 stock index currently has a dividend yield of 1.87 percent, but many companies pay more. The risk is that a company could cut its dividend, or that the stock price could fall for some other reason.

Beware of bonds

Bonds have higher yields than Treasuries, but typically that reflects the risk that the company may not be able to pay the interest or repay the principal. You also risk losing money if you sell a low-yield bond before maturity. Other investments, such as annuities, may offer higher yields, but beware of penalties for taking money out early.

Terry Savage