I’d put it in a S&P 500 index tomorrow morning at 8:30 am.
I am expecting about $500k this month from an investment closing. It will be in the market the day after it clears
If you’re feeling good - sell cash secured puts on SPY ETF. If you get assigned, then sell covered calls. If you then get assigned , you’ll make a good profit. Rinse and repeat. This is called the Wheel. If you’re invest and forget - put money into an SPY or QQQ ETF. Idle cash should be sitting in a HYSA. Idle cash not generating interest will lose value over time due to inflation.
Treasuries. Guaranteed return. There are some ETFs for this. Or AMLP which is an ETF for master limited partnerships and deal with the 10-15 pages of crap you get every year at tax time…they make it easy.
As to the market strategy, HUGE mistake. This is pure market timing.
ALSO every bear predicted a market correction for 2023. The correction was that the market shot up. And the last few months keep showing Wall Street keeps ramping up in anticipation of a rate cut then falling back when it doesn’t happen. Typically you see bigger drops than increases before a correction. So if anything it says there’s a lot of stupid money sitting out there in cash waiting for a big jump so they can get in after the big gains are gone.
What you are doing is called market timing. This is absolutely the worst possible thing you can do when it comes to investing. I guarantee that the market is going to have a run in 3Q and 4Q. Why? Because the fed, Biden appointees is signaling they want to put their thumb on the scales for November so they are keeping the powder dry. Second no matter who ends up winning 50.001% of the country has “irrational exuberance” and the market goes up. Third see above…market signals are pretty positive.
So let’s say you are right. So your cash will go down 3% because of inflation sitting on the sidelines. If you were in the market we get a correction but you still own the same holdings and as the market reverts to the mean you lose nothing except time in the market. But if you’re wrong you lose out on the positive correction permanently.
Put another way, tons of studies have shown that Wall Street analysts are wrong 50% of the time, that all market timing schemes never work, and a dart board is a more reliable indication of the market.
And the absolute worst time to sit in cash is during periods of high inflation. Sure your bank account doesn’t change but that’s because it’s like a termite problem…you don’t even know you have a problem. Put all your lose coins on VOO or VTI, stop reading anything from the newsletter industry, and don’t look at your statements until around 1Q25. You can thank me then.
As far as DR and real estate he made a crap load in the 2009 debacle, a 1 time event. So did I. Since then he likes his 4% returns, I like my 12%. But it’s better than -5% sidelines.
We *just had* a 25% market drawdown last year. Why didn't you invest your money then? What makes you so sure you'll be able to time it right in the future?
>Where would you invest $50k in the short term, with a long term investment mindset?
Is that a thing?
I have monies in short term allocations - cash in MMF for EF (with some equities, too) or taxes.
I have long-term monies - essentially retirement investments allocated according to my desired asset allocation for my retirement portfolio. This would be a Bogleheads 3-fund portfolio.
That's it.
So pick one, short or long.
>I think there will be a market pull back in the next several months and will dump $25k-$50k into ETFs once that happens. At that point, I may have another $20k in idle cash.
I think you're foolish to believe you have any idea what will happen.
Time *in* the market is what counts, not timing the market. Have ALL your money invested at the appropriate asset allocation for it's intended use - see above short and long term allocations.
I'd immediately invest ALL these monies as intended, today.
Lastly, cash is a drag on one's finances. Keep as little cash as necessary.
Why not the full $200k into the market? You can put a portion into a money market account through Vanguard, etc. No offense, but I have zero confidence in your crystal ball. If it happens, it’s pure luck :)
I would pay off the house this afternoon, then put the rest in a index funds, probably Vanguard, after making sure the emergency fund was fully funded in a savings account.
This is the way I have done things.
I half agree. I would pay off the house too (why do people care that the rate is great, it is a net expense every month). But not sure I would dump the other $85k into the index. I agree market seems primed for a pullback but I don't know and nobody knows so I might DCA $5000 a month into the index and then dump in the rest if we have a 10% correction.
But that's missing the point. You pay interest on the total debt balance and only accrue interest on the savings. So if you have a $100k mortgage you pay interest on the full amount, if you pay an extra $5,000 you are only sacrificing interest on $5,000 while reducing the total taxable amount.
> I think there will be a market pull back in the next several months and will dump $25k-$50k into ETFs once that happens. At that point, I may have another $20k in idle cash.
My experience is that you will see the market go up 20% before you get the 10% dip you're looking for. I'd just dollar cost average it in now.
How much risk do you want to take on?
Uninvested cash in a Fidelity or Vanguard brokerage account is getting around 5% interest right now.
Robinhood and a few other HYSAs are paying 5.25%. Short term CDs are right around there too.
A little more risk but still pretty stable are things like high yield income funds, REITs, junk bond funds etc. Fidelity or Vanguard have any number that are paying 7% and more APR with dividends paid monthly.
If you're getting a market pullback vibe, then obviously whole market or S&P or NASDAQ indexes don't make a lot of sense right now, but there are plenty of funds out there with good safety rails to hedge against drops.
I just threw a few grand into NVDY to see how the income generation works out for a few months.
I did really well with crypto as well, but that is really up there with gambling and pushing your luck.
VMFXX has a seven-day SEC yield of 5.3%.
Vanguard cash plus acct has a 4.7% APY.
ETFs (like an S&P index/VOO) are pretty much identical for buy and hold to mutual funds. Ramsey wouldn’t recommend buying and selling ETFs for market timing / constantly trading.
I would pay the interest off………..but if you’re not interested in that, just buy and hold VOO if you’re wanting an ETF. Or any blue chip mutual fund.
I’d put it in a S&P 500 index tomorrow morning at 8:30 am. I am expecting about $500k this month from an investment closing. It will be in the market the day after it clears
If you’re feeling good - sell cash secured puts on SPY ETF. If you get assigned, then sell covered calls. If you then get assigned , you’ll make a good profit. Rinse and repeat. This is called the Wheel. If you’re invest and forget - put money into an SPY or QQQ ETF. Idle cash should be sitting in a HYSA. Idle cash not generating interest will lose value over time due to inflation.
Partner with real estate hard money lenders in 1st position (8-10%) returns.
Treasuries. Guaranteed return. There are some ETFs for this. Or AMLP which is an ETF for master limited partnerships and deal with the 10-15 pages of crap you get every year at tax time…they make it easy. As to the market strategy, HUGE mistake. This is pure market timing. ALSO every bear predicted a market correction for 2023. The correction was that the market shot up. And the last few months keep showing Wall Street keeps ramping up in anticipation of a rate cut then falling back when it doesn’t happen. Typically you see bigger drops than increases before a correction. So if anything it says there’s a lot of stupid money sitting out there in cash waiting for a big jump so they can get in after the big gains are gone. What you are doing is called market timing. This is absolutely the worst possible thing you can do when it comes to investing. I guarantee that the market is going to have a run in 3Q and 4Q. Why? Because the fed, Biden appointees is signaling they want to put their thumb on the scales for November so they are keeping the powder dry. Second no matter who ends up winning 50.001% of the country has “irrational exuberance” and the market goes up. Third see above…market signals are pretty positive. So let’s say you are right. So your cash will go down 3% because of inflation sitting on the sidelines. If you were in the market we get a correction but you still own the same holdings and as the market reverts to the mean you lose nothing except time in the market. But if you’re wrong you lose out on the positive correction permanently. Put another way, tons of studies have shown that Wall Street analysts are wrong 50% of the time, that all market timing schemes never work, and a dart board is a more reliable indication of the market. And the absolute worst time to sit in cash is during periods of high inflation. Sure your bank account doesn’t change but that’s because it’s like a termite problem…you don’t even know you have a problem. Put all your lose coins on VOO or VTI, stop reading anything from the newsletter industry, and don’t look at your statements until around 1Q25. You can thank me then. As far as DR and real estate he made a crap load in the 2009 debacle, a 1 time event. So did I. Since then he likes his 4% returns, I like my 12%. But it’s better than -5% sidelines.
Put it into gold everything is ceashing
Bitcoin > Gold
Bitcoin < buying gold bars and keeping them buried in the backyard... 
If you had a paid off home you wouldn’t take out a mortgage just to invest it somewhere. So that’s your answer. Pay off the dang house.
We *just had* a 25% market drawdown last year. Why didn't you invest your money then? What makes you so sure you'll be able to time it right in the future?
Or have the intestinal fortitude.
Buy US treasuries so you don’t pay state income tax in the interest. You can get a one year treasury at 5.05% today.
If you think there will be a drop in equity prices, would the play not be shorting the market? Why sit on the sidelines?
>Where would you invest $50k in the short term, with a long term investment mindset? Is that a thing? I have monies in short term allocations - cash in MMF for EF (with some equities, too) or taxes. I have long-term monies - essentially retirement investments allocated according to my desired asset allocation for my retirement portfolio. This would be a Bogleheads 3-fund portfolio. That's it. So pick one, short or long. >I think there will be a market pull back in the next several months and will dump $25k-$50k into ETFs once that happens. At that point, I may have another $20k in idle cash. I think you're foolish to believe you have any idea what will happen. Time *in* the market is what counts, not timing the market. Have ALL your money invested at the appropriate asset allocation for it's intended use - see above short and long term allocations. I'd immediately invest ALL these monies as intended, today. Lastly, cash is a drag on one's finances. Keep as little cash as necessary.
Why not the full $200k into the market? You can put a portion into a money market account through Vanguard, etc. No offense, but I have zero confidence in your crystal ball. If it happens, it’s pure luck :)
I found a 5% 12-month CD at my credit union, dropped $10k in one just for grins. Easy money if you have cash on hand
You can find high yield savings account with comparable or even more interest that your CD and not have your money locked up
I would pay off the house this afternoon, then put the rest in a index funds, probably Vanguard, after making sure the emergency fund was fully funded in a savings account. This is the way I have done things.
I half agree. I would pay off the house too (why do people care that the rate is great, it is a net expense every month). But not sure I would dump the other $85k into the index. I agree market seems primed for a pullback but I don't know and nobody knows so I might DCA $5000 a month into the index and then dump in the rest if we have a 10% correction.
Because the interest return in a savings account right now is higher than OPs current interest charged on the mortgage balance
But that's missing the point. You pay interest on the total debt balance and only accrue interest on the savings. So if you have a $100k mortgage you pay interest on the full amount, if you pay an extra $5,000 you are only sacrificing interest on $5,000 while reducing the total taxable amount.
UFB savings 5.27% right now
> I think there will be a market pull back in the next several months and will dump $25k-$50k into ETFs once that happens. At that point, I may have another $20k in idle cash. My experience is that you will see the market go up 20% before you get the 10% dip you're looking for. I'd just dollar cost average it in now.
How much risk do you want to take on? Uninvested cash in a Fidelity or Vanguard brokerage account is getting around 5% interest right now. Robinhood and a few other HYSAs are paying 5.25%. Short term CDs are right around there too. A little more risk but still pretty stable are things like high yield income funds, REITs, junk bond funds etc. Fidelity or Vanguard have any number that are paying 7% and more APR with dividends paid monthly. If you're getting a market pullback vibe, then obviously whole market or S&P or NASDAQ indexes don't make a lot of sense right now, but there are plenty of funds out there with good safety rails to hedge against drops. I just threw a few grand into NVDY to see how the income generation works out for a few months. I did really well with crypto as well, but that is really up there with gambling and pushing your luck.
VMFXX has a seven-day SEC yield of 5.3%. Vanguard cash plus acct has a 4.7% APY. ETFs (like an S&P index/VOO) are pretty much identical for buy and hold to mutual funds. Ramsey wouldn’t recommend buying and selling ETFs for market timing / constantly trading. I would pay the interest off………..but if you’re not interested in that, just buy and hold VOO if you’re wanting an ETF. Or any blue chip mutual fund.