OT: Cash on sidelines? Financial help needed.
- Thread starter R house
- Start date
One suggestion is Vanguard short term Corporate bonds, VCSH. Cost is low ,risk is low. If you want no risk then money market or Goverment short term bonds ,but the return is less than 1 per cent.If your investment timeline is long term, market downturns are ok and will balance out and allow additional share purchases when stocks are on sale. This is called dollar cost averaging.Good luck!
Stock market is up because there is no yield anywhere else.
And you wait until a Saturday night at 11:47 pm to ask for advice... markets crash and have for years and will continue to do so ....keep this in mind only a few people really determine what goes on in the markets... the average investor has little chance to stay ahead In times of downturns ...be smart ... stay the course and make sure to have someone who has knowledge of what your short and long term goals are... personally have been through 4 market disruptions or as you say “crashes “ ... the last one in March had the quickest recovery I have ever experienced...realize there are many in power who were hoping that the market would continue the downward turns... could still happen based upon what and who Wall Street thinks is going to win the Presidency in November.
Thank you to for the advise. I still have about 70 percent still in the market And the remaining in cash. I mean mm when I say cash. I’ve always been an all in kind of guy, but things seem different this time around. Political uncertainty, huge federal debt, society clashing, high unemployment, commercial real estate potential collapse, major industry disruptions. I have much more cash on the sidelines than I need, but don’t want to be that guy who was fully invested that got wiped out in the Great Depression. Do you think corporate bond fund is the way to go? Wont the value of my holdings in bonds go down drastically if interest rate increases? How about tips, someone mentions those, but not sure what those are. Do you think a variable annuity is a safe way to go? Thank you for help, a lot of smart people on here.
Fed quantitative easing means no yield. Market searching for yield or growth as an alternative to bonds. Why tech or dividend stocks are on Vogue. Rally is not broad as 2/3 of market left behind.
. Always try to not let your emotions play into using basic investment strategy...nobody can outrun the downturns unless you are a guy like Warren Buffet... this is the type of man I listen to even though whatever wealth I possess is minute in scope... talk to people and yes READ... ask questions as you have done here.... the board has some smart and caring folks...
You need a precious metals hedge of approx 5 % of your investments.
Pay off all credit card debt/use monthly.
Refinance mortgages, if you have any, pay down principle monthly.
Modernize kitchen and baths for resale of RE home.
If you own your cars, have them serviced regularly esp oil/filter. Buy a long term service contract if you hold thru the original service contract mileage/age.
Decide where you have to/can live in older years. (Don't move West of West Point like Mary Anne and I did, unless your kids NEED you.)
Pay off all credit card debt/use monthly.
Refinance mortgages, if you have any, pay down principle monthly.
Modernize kitchen and baths for resale of RE home.
If you own your cars, have them serviced regularly esp oil/filter. Buy a long term service contract if you hold thru the original service contract mileage/age.
Decide where you have to/can live in older years. (Don't move West of West Point like Mary Anne and I did, unless your kids NEED you.)
OR;
2/3's of the market is still available for investment is the other way to look at the markets.
One thought is Berkshire Hathaway. Modest valuation offers some downside protection; I haven’t checked the exact specs recently, but I think for every dollar you invest, you’re basically buying roughly 20 cents of cash, and of course there’s also some upside if market continues to soar higher.
Essentially you’ll probably outperform the s&p if the market’s animal spirits die out, you’ll likely underperform the s&p, but outperform cash if valuations continue to climb. And you’re still sitting on a lot of cash, just cash managed by Buffett & his lieutenants.
Essentially you’ll probably outperform the s&p if the market’s animal spirits die out, you’ll likely underperform the s&p, but outperform cash if valuations continue to climb. And you’re still sitting on a lot of cash, just cash managed by Buffett & his lieutenants.
It's kind of like when the financial meltdown happened. People have to put there money somewhere and the US is still the safest place to be. Sometimes being the least worse option is all you need to be.
Just curious since my wife and I will be looking to move/downsize in a few years. I don't know the area well (live in Bergen County) but what's wrong with west of West Point? And how west of West Point do you mean?
Keep expenses as low as possible. No Cc, car payments and ideally no mortgage. I got my monthly built in expenses down to about 1300 month( rent, utilities, car insurance). That doesn’t count food and discretionary spending. Got about 1.1 mil in assets both retirement and non retirement(stocks, MF, etc)
Synchrony Bank 0.75 apy
Capital One 0.65 apy
It wasn't long ago when those were returning over 2%.
Another idea is government bonds, the interest is low but if kept 20 years they are guaranteed to double. 20 years is a long time though.
Capital One 0.65 apy
It wasn't long ago when those were returning over 2%.
Another idea is government bonds, the interest is low but if kept 20 years they are guaranteed to double. 20 years is a long time though.
What state do you live in? I put my mom in MUJ, Blackrock's high quality NJ mini bond fund. Yielding close to 5% tax free. MPA is the Pennsy one.
I was never a fan of annuities. They take your money and after x years give it back to you in annual increments. Most of them offer a high return rate for a year or two then drop to the interest rate the federal bank is set to. There may be some good annuities, their terms vary greatly between the types and one has to understand exactly how they work, any penalties for early withdrawal, their tax implication when you collect and what they pay out.
Ever hear of the rule of 72? The 20 year treasury is 1.29% That means your money will double in 55 years. $$$$
Invest of gold/silver if you are trying to hedge the market downturn and think it will get as bad as you say.
They are not true investment vehicles but protect again the dollar weakening which is currently happening and a flight to safety.
May give you more interest than leaving it in the bank.
They are not true investment vehicles but protect again the dollar weakening which is currently happening and a flight to safety.
May give you more interest than leaving it in the bank.
Suggest looking into some alternative investments. You’ll find a very low correlation between the stock market and alternates. I’m talking about investigating a small percentage of your overall portfolio in alternatives (5% or so).
I am talking about savings EE bonds. They are guaranteed to double after 20 years no matter what their annual interest rate is.
EE Bonds
I see the print which would give you about a 3% return annually for 20 years but find out in 20 years they won’t pay up like the elimination of student loan for public service. I’m familiar with EE bond but wasn’t aware of that clause.
Invest in water. Harvard's doing it so it must be smart.
https://www.wsj.com/articles/harvard-quietly-amasses-california-vineyardsand-the-water-underneath-1544456396#:~:text=490%20Responses-,On%20a%20former%20cattle%20ranch%20in%20California's%20Cuyama%20Valley%2C%20Harvard,wells%20and%20planted%20a%20vineyard.&text=The%20firm%2C%20Brodiaea%20Inc.%2C,of%20a%20flat%2Dbottomed%20valley.
https://www.wsj.com/articles/harvard-quietly-amasses-california-vineyardsand-the-water-underneath-1544456396#:~:text=490%20Responses-,On%20a%20former%20cattle%20ranch%20in%20California's%20Cuyama%20Valley%2C%20Harvard,wells%20and%20planted%20a%20vineyard.&text=The%20firm%2C%20Brodiaea%20Inc.%2C,of%20a%20flat%2Dbottomed%20valley.
If one was to buy an EE bond today, it would only return 0.1 percent, pretty much zero. One would have to not cash them for 20 years. 55 - 20, one would have to be 35 years old or so to do bonds.
+1
Annuities is an awful idea. @R house , there is no silver bullet to get a better return without increased risk. If you don't want any risk, stick with cash and CDs. If you have access to a legit stable value fund, you can push returns to 2%'ish. However, any other options come with risks.
BINGO! As of now, for the vast majority of people, the choice is either the stock market or "under the mattress". We have about 20% of our non-real estate assets in cash. We are making 1.5-2.0% on average (mostly via existing CDs). It is what it is. The security makes us comfortable so it's our choice. Besides with other 80% ripping it up, our overall returns are pretty sweet.
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The other option is paying down debt. 3-4% better than nothing and accelerates debt elimination.
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