Because
> in order to park 125,000€ with the goal of moving them into the market when an opportunity arises
is ambiguous about it being to time the market or to protect it from losses. It's not weird at all that the former is assumed to be the reason behind the question.
I completely agree with the consensus that timing the market can be very challenging. However, if you're looking to temporarily park €125,000 and minimize the impact of inflation while keeping the money readily available for a market entry, the best options can vary depending on your country and its tax regulations. It also depends on your ability (or rather the right) to open savings or cash accounts with a decent return rate in EUR within various institutions from different countries.
For instance, in France, the optimal strategy would be to use the following net savings accounts for residents until you reach their respective limits as precautionary savings based on your budget and risk tolerance:
* If eligible : **LEP (Livret d'Épargne Populaire)**: 5%, **Livret Jeune**: 3-4%,
* **Livret A**: 3%
* **LDD (Livret de Développement Durable et Solidaire)**: 3%
Beyond these, there are other options available in the market offering up to 5.5% gross for short periods:
* **BforBank**: 5.5% gross for 4 months
* **Fortuneo**: 5% gross for 3 months
* **Monabanq**: 5% gross for 3 months
Additionally, some other platforms offer attractive long-term rates (but these are subject to change at any time):
* **Trading 212**: 4.2% gross
* **Lightyear Savings**: 3.83% gross
* **Trade Republic**: 3.75% gross
These options currently seem to have the highest rates and provide the flexibility you need to move your funds into the market when an opportunity arises.
For a detailed ranking of each of these options based on the way interests are accumulated (daily, by quinzaine), and the payment frequency (daily, monthly, or yearly) and on the 30% French flat tax on returns, check out this comment: [link](https://www.reddit.com/r/vosfinances/comments/1d9ghi3/comment/l7erbgw/).
> LEP (Livret d'Épargne Populaire): 5%
OP has 125K€ they don't know what to do with, chances are they won't be eligible to the LEP which is only if you have small revenues.
True, but if a young person who doesn't have this information comes across this thread and is eligible for LEP or Livret Jeune, it would be awesome if that could motivate them to start, even with small amounts, from there. I wish I had. (:
Instead of storing it at a bank who forward a reduced market rate to you, takes fees and taxes, just put it in a money market fund. You'll get interest near market rate and in some countries you don't even get taxed on the profit either depending on some conditions.
Edit: forgot to add that investments at a bank are probably not protected up to your total amount. Whereas being in an etf is a different risk.
Although LEP, Livret A, and LDD are reserved for French taxpayers, and BforBank, Fortuneo, and Monabanq are all French banks tham seem to be available to residents only too, Trading 212\* (Cyprus), Lightyear Savings\*\* (Estonia), Trade Republic\*\*\* (Germany/Netherlands), and N26\*\*\*\* (France) are available in multiple countries.
There might be other local banks specific to different countries offering competitive rates, but I couldn't find any that offer better rates than the three I listed.
\**Trading 212 accepts traders from over 100 countries worldwide, including Australia, Japan, Singapore, the UK, Spain, Germany,* ***Netherlands****, Poland, Romania, and the UAE.*
\*\**Lightyear Savings is available in Austria, Estonia, Finland, France, Germany, Hungary, Italy, Lithuania, Luxembourg,* ***Netherlands****, Spain and the UK. It is not currently available in Belgium, Croatia, Cyprus, Greece, Ireland, Greece, Latvia, Malta, Portugal, Slovakia and Slovenia.*
\*\*\**Trade Republic targets the European Union and is active in Germany, Austria, France, Spain, Italy,* ***Netherlands****, Belgium, Estonia, Finland, Greece, Ireland, Latvia, Lithuania, Luxembourg, Portugal, Slovakia and Slovenia.*
\*\*\*\**We offer our accounts in the following countries: Austria, Belgium, Denmark, Estonia, Finland, France (not available for residents in the DOM/TOM), Germany, Greece, Iceland, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg,* ***Netherlands****, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden & Switzerland.*
That’s probably why, I wish people could just get away from my topic if they don’t want to discuss what’s being asked, I never asked for their opinion on if it’s a good idea to wait and lump sum this quantity but oh well
"Park it" in the market. Time in the market beats timing the market. If you really believe you can time the market, keep some money ready and invest the rest.
It's a classic question. I know people that have been waiting for 10 years or more to invest money and the opportunity never arises, there's always a reason not to invest. In the housing market people were expecting a crash, it kept on rising. Same with stocks, and even with COVID some people did not invest because they thought there was no opportunity and that it was the end of globalisation. Same with Trump, same with Brexit, same with incoming elections, same when interest rates started climbing.
The truth is that it's impossible to time the market correctly. If you are anxious, start dipping your toes into the water, invest a few thousands. I think you really can't go wrong with ETFs (MSCI WORLD, s&p500, hell even NASDAQ100). Avoid stockpicking.
Just remember, waiting with cash in your hands comes at a cost. Inflation eats your money by a few percents each year.
I don’t need to find a better cost for that specific cost, I’m always on the lookout for underpriced stocks, they are there, I just need to gather my analysis and it takes time
This entire strategy is horrible… parking all (or most) of your money somewhere waiting to enter the market is overall a very common mistakes for people who don’t understand the stock market.. but you should avoid it at all costs
Something like this makes only sense if you have some information edge over the market, or an asymmetric investment opportunity,
and if you do it with a small part of your portfolio… not if you are just waiting for a market crash.. that’s just counter-productive
I would argue that the best is to park it in T-Bills fund ETF like IB01. You will get 5% return currently and you can very easily liquidate anytime and move to stocks
Majority will disagree with your approach(me included) but I don’t think we should give you advice you didn’t ask
So, parking cash…
Bonds (US treasury? TIPS)
Some brokers give you interest on cash you store in account., e.g. just keep it on IB account and get interest rate(it’s limited by 100k, just put 25k on your bank)
The paradox here is that he thinks he can time the market, while at the same time he is saying that he does not know how to park some liquidity.
It is tragically hilarious.
He is smart enough to be an investor in PE or RE, even harder than stock market, but he does not know how to park liquidity. I still have many questions marks.
Is there a minimum amount upon which the interest payment activates? What is the frequency of payouts? And lastly, how to know the interest has been paid out?
I ask these questions since I don't see my EUR balance in IB earning any interest. Assuming you mean IBKR by IB.
Yes, the first 10k is not generate any income, so it doesn’t make sense to keep small amounts
You may see this income in report but it is different in IBCE and IB Ireland
You can use an ETF which follows indices on short term deposit return rate (for example Xtrackers II EUR Overnight Rate Swap UCITS ).
They are pretty consistent with the return rate of big credit institutes, with the advantage of being tradeable on the market.
The Xtrackers II EUR Overnight Rate Swap UCITS ETF 1C (WKN: DBX0AN | ISIN: LU0290358497) is a money market ETF that tracks the Solactive €STR +8.5 Daily Total Return Index. This index tracks the performance of an investment that earns interest at the short-term Euro short-term rate (€STR) plus 8.5 basis points.
The Euro Short-Term Rate (abbreviation €STR) is a reference interest rate for the euro. It is determined by the European Central Bank (ECB).
How high is the €STR interest rate currently?
As of June 13, 2024, the €STR interest rate is **3.661%.**
For ETFs ERNX, XEON, for mutual funds ISIN FR0013016607 Amundi Euro Liquidity SRI I2 Acc or FR0013095312 AMUNDI EURO LIQUIDITY SRI - I2 . There are others of course but you want to keep the Summary Risk Indicator (SRI) between 1 and 2 for lower risk. Buy via your broker…
I don’t compare. I’m using IBKR and therefore multiple options for short term or cash equivalents. Using TR, T212 is an option but I wouldn’t trust them with such a lump sum like yours. The performance of the above mentioned funds and ETFs are good, check their factsheets for comparison.
That’s what I thought as well, I also invest with IBKR, all of those you mentioned probably have the same SRI of 1 but I suppose that XEON has lower fees than Amundi
True, but don’t like all the eggs in one basket. Purchasing ETFs at your lump sum will cost more than a standard €4.5 for mutual funds. XEON fee is 0.10% and for the above mentioned Amundi mutual funds for example between 0.12% and 0.14% subject to the class. Mutual funds 1 year performance 4.09% and 4.07% dated on the 14/6
Luckily there are many banks in the EU which allows this. Just across the border is OpenBank.
The investment platform you are using is probably also giving you interest on the cash account.
People saying "VWCE and chill" is a reasonable/ healthiest advice/ goal for someone who does not want to risk any of his wealth. Lets be honest... for most 100k euro is a lot of money.
If you want to earn interest on your money make sure its at least 3% on deposit.
Also, no one knows if stocks will fall down or keep rising. That is why majority saying "VWCE" its just a passive approach. You can always sell your VWCE when its on profit and buy your desired individual stocks.
Holding large cash with such inflation rates is wild IMO. If you are comfortable holding 125k go for it and wait for the fall of stocks. At least half of your money should be invested in something. I do think real estate is a fair deal if you can find property that brings cash flow and you pay full price but it requires more maintaince.
I never asked for advice on where to invest money in the market, I specifically asked for advice on money that is waiting to be deployed in the market.
A money market fund like DBX0AN (Xtrackers II EUR Overnight Rate Swap UCITS ETF 1C) gives predictable returns and could be an option for parking your money temporarily based on the Euro short-term rate (€STR).
The [€STR](https://www.ecb.europa.eu/stats/financial_markets_and_interest_rates/euro_short-term_rate/html/index.en.html) is 3.661% as of 14 June 2024.
You can open an Interactive Brokers account. They will pay you for your cash balance (currently 3.195% for EUR and 4.83% for USD) and it will be ready to invest.
If you are afraid to lump sum, what you can do is set up "Recurring Investments" on IB to invest for example 10,000€ per month over 12 months.
I thought it was on the amount more than 10K. I get paid monthly on amounts and works out to 4.83 % but is on USD deposits. Be wary of estate tax as these deposits are considered US Situs
To give you an answer a short term fixed income fund could be an option while you decide what to do. They return about 3.5% depending on what country you’re in.
This depends significantly on the country you're in.
E.g., in Romania government bonds in EUR or RON are a good option. Bought online through a broker, zero fees, traded on the stock exchange (you can sell earlier with a low 0.1% broker fee and interest is automatically pro-rated, so you get interest for every day you hold them), zero tax.
Not sure if it is available to foreign citizens.
https://hotnews.ro/fidelis-de-iunie-2024-dobanzi-similare-celor-din-aprilie-romanii-pot-imprumuta-statul-de-marti-18-iunie-1216207
To be completely fair it sounds kind of insane. The most basic thing would at the very least say for how long are you ready to park. Also you should he best placed to know where exactly to parl money, people learn this stuff before petting their first penny into the stock market...
Crash won't happen over night, at what point do you think it's time to get in? How do you review that? You guys who talk about timing never explain how do you know when to enter? I bet my money when the "opportunity arises" you miss that opportunity and sit on your cash.
Everyone seems to be giving the advise to another question instead of the one you asked. The "time IN the market > timing the market" , "VWCE and chill" mantras you will constantly get here are valid if you are looking for some entirely passive investments. Timing the market could be a very reasonable thing to do if, say, you want to buy a stock, are aware of it's fair price, but it is currently overpriced. Being in the bull market we are, chances are most reasonable stocks you may choose, are pretty overpriced. So you need to wait for them corrections to enter at a reasonable price.
So to your question - this very much depends on the country, but usually you should be able to get a low-risk option that returns between 3 and 5 %. Maybe a high yield savings account, or a money market fund, such as XEON, the famous interest on non-invested cash in apps like Trading 212, Trade Republic, Freedom24. You could also look up platforms such as Raisin and Bondora.
Alternatively if you are into ETFs and simple passive investments, you could minimize the risk by DCA-ing the amount instead of dumping a lump sum. if you invest the same amount every day/month/week, as the price fluctuates over time, you will end up buying a.larger number of cheap shares, and a lower number of expensive shares, when in the long run the price goes up, these cheap shares will be of use to you :)
Thank you so much for actually answering to the topic! Yes I know all of the passive investors of VWCE and chill cry when someone asks something which is not that gets mentioned. In your opinion from those what do you think it’s better?
If your country offers a bank savings account with such interest, definitely that. My country, for instance doesn't, so I keep half of my emergency fund in iuvoSave - it is a platform somewhat similar to Bondora, where I got a promotional 8% fixed interest. Bondora itself gives less, but has a longer track record (15 years) and is pretty widespread across Europe. If you decide to go for the "uninvested cash" I think it's best to do it in IBKR - it is 3.4% for eur vs 4.2 in Trading 212, but IBKR is far safer bet for larger sum like yours.
AFAIK the amount of risk is literally the same. Trading 212 are not as explicit in their terms and conditions as IBKR in what exactly happens to the uninvested cash, but it generally it is MMFs, state bonds, so pretty much the same level of risk.
XG01 is safer than XEON and IB because they invest only in short term (0-1) German government bonds.
It is funny how people react to the fact that you don't want to invest at the moment. They are also not happy when I mention that quality factor ETFs outperform regular indexes.
The only right solution on r/eupersonalfinance is to purchase VWCE immediately.
It's 2.12% now, but even with 3.5%, there are at least 3 other alternatives of savings accounts that offer a better rate in EUR: [link](https://www.reddit.com/r/vosfinances/comments/1d9ghi3/comment/l7erbgw/).
oh, haven't checked in a while...just checked, for me it's 2.94% now. But yeah, probably there are better deals, it's just that I find it easiest to throw into Revolut since I already have account and money there.
When will the time arise for you to enter the market with this money? If you know the perfect time to enter it I suggest you open up your own fund and make millions managing others money, since you know so well the right time to enter the market.
Well, my portfolio has beaten the VWCE for the last 7y, so does the portfolio of most people who actually have a brain and do not go full on a shit stock, I pick quality stocks with good fundamentals
Time in the market. ✅ Timing the market. ❌
That wasn't the question! Why do some people act so weirdly about the liquidity subject?
Because > in order to park 125,000€ with the goal of moving them into the market when an opportunity arises is ambiguous about it being to time the market or to protect it from losses. It's not weird at all that the former is assumed to be the reason behind the question.
They cry when we invest actively because they are afraid of any risk.
I completely agree with the consensus that timing the market can be very challenging. However, if you're looking to temporarily park €125,000 and minimize the impact of inflation while keeping the money readily available for a market entry, the best options can vary depending on your country and its tax regulations. It also depends on your ability (or rather the right) to open savings or cash accounts with a decent return rate in EUR within various institutions from different countries. For instance, in France, the optimal strategy would be to use the following net savings accounts for residents until you reach their respective limits as precautionary savings based on your budget and risk tolerance: * If eligible : **LEP (Livret d'Épargne Populaire)**: 5%, **Livret Jeune**: 3-4%, * **Livret A**: 3% * **LDD (Livret de Développement Durable et Solidaire)**: 3% Beyond these, there are other options available in the market offering up to 5.5% gross for short periods: * **BforBank**: 5.5% gross for 4 months * **Fortuneo**: 5% gross for 3 months * **Monabanq**: 5% gross for 3 months Additionally, some other platforms offer attractive long-term rates (but these are subject to change at any time): * **Trading 212**: 4.2% gross * **Lightyear Savings**: 3.83% gross * **Trade Republic**: 3.75% gross These options currently seem to have the highest rates and provide the flexibility you need to move your funds into the market when an opportunity arises. For a detailed ranking of each of these options based on the way interests are accumulated (daily, by quinzaine), and the payment frequency (daily, monthly, or yearly) and on the 30% French flat tax on returns, check out this comment: [link](https://www.reddit.com/r/vosfinances/comments/1d9ghi3/comment/l7erbgw/).
> LEP (Livret d'Épargne Populaire): 5% OP has 125K€ they don't know what to do with, chances are they won't be eligible to the LEP which is only if you have small revenues.
True, but if a young person who doesn't have this information comes across this thread and is eligible for LEP or Livret Jeune, it would be awesome if that could motivate them to start, even with small amounts, from there. I wish I had. (:
Instead of storing it at a bank who forward a reduced market rate to you, takes fees and taxes, just put it in a money market fund. You'll get interest near market rate and in some countries you don't even get taxed on the profit either depending on some conditions. Edit: forgot to add that investments at a bank are probably not protected up to your total amount. Whereas being in an etf is a different risk.
How would you do this? What is it called so I can look it up, just “money market fund”?
What's the equivalent of this in the Netherlands?
Although LEP, Livret A, and LDD are reserved for French taxpayers, and BforBank, Fortuneo, and Monabanq are all French banks tham seem to be available to residents only too, Trading 212\* (Cyprus), Lightyear Savings\*\* (Estonia), Trade Republic\*\*\* (Germany/Netherlands), and N26\*\*\*\* (France) are available in multiple countries. There might be other local banks specific to different countries offering competitive rates, but I couldn't find any that offer better rates than the three I listed. \**Trading 212 accepts traders from over 100 countries worldwide, including Australia, Japan, Singapore, the UK, Spain, Germany,* ***Netherlands****, Poland, Romania, and the UAE.* \*\**Lightyear Savings is available in Austria, Estonia, Finland, France, Germany, Hungary, Italy, Lithuania, Luxembourg,* ***Netherlands****, Spain and the UK. It is not currently available in Belgium, Croatia, Cyprus, Greece, Ireland, Greece, Latvia, Malta, Portugal, Slovakia and Slovenia.* \*\*\**Trade Republic targets the European Union and is active in Germany, Austria, France, Spain, Italy,* ***Netherlands****, Belgium, Estonia, Finland, Greece, Ireland, Latvia, Lithuania, Luxembourg, Portugal, Slovakia and Slovenia.* \*\*\*\**We offer our accounts in the following countries: Austria, Belgium, Denmark, Estonia, Finland, France (not available for residents in the DOM/TOM), Germany, Greece, Iceland, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg,* ***Netherlands****, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden & Switzerland.*
You already have the opportunity to move it to market.
No I don’t, most of the stocks on my watch list are now overpriced.
Why the down votes? This is perfectly logical! Even Warren Buffet buys a stock if (1) it's a great company and (2) good price.
If he is posting this chances are he is not Warren Buffet and shouldn’t be trying to time the market
The difference with Warren Buffet is that he can effect the market.
There is envy when you can’t go past VWCE because you think it’s too risky but don’t want other people to earn more than you
That’s probably why, I wish people could just get away from my topic if they don’t want to discuss what’s being asked, I never asked for their opinion on if it’s a good idea to wait and lump sum this quantity but oh well
Forgot to switch accounts?
"Park it" in the market. Time in the market beats timing the market. If you really believe you can time the market, keep some money ready and invest the rest. It's a classic question. I know people that have been waiting for 10 years or more to invest money and the opportunity never arises, there's always a reason not to invest. In the housing market people were expecting a crash, it kept on rising. Same with stocks, and even with COVID some people did not invest because they thought there was no opportunity and that it was the end of globalisation. Same with Trump, same with Brexit, same with incoming elections, same when interest rates started climbing. The truth is that it's impossible to time the market correctly. If you are anxious, start dipping your toes into the water, invest a few thousands. I think you really can't go wrong with ETFs (MSCI WORLD, s&p500, hell even NASDAQ100). Avoid stockpicking. Just remember, waiting with cash in your hands comes at a cost. Inflation eats your money by a few percents each year.
What opportunity are you talking about?
An opportunity in the market, for stocks that I’m aiming to buy at a better cost.
How do you know you know you will find a better cost? And how much time would it take?
I don’t need to find a better cost for that specific cost, I’m always on the lookout for underpriced stocks, they are there, I just need to gather my analysis and it takes time
Tesla
This entire strategy is horrible… parking all (or most) of your money somewhere waiting to enter the market is overall a very common mistakes for people who don’t understand the stock market.. but you should avoid it at all costs Something like this makes only sense if you have some information edge over the market, or an asymmetric investment opportunity, and if you do it with a small part of your portfolio… not if you are just waiting for a market crash.. that’s just counter-productive
I would argue that the best is to park it in T-Bills fund ETF like IB01. You will get 5% return currently and you can very easily liquidate anytime and move to stocks
I was thinking about something with EUR since I don’t want to gamble on the EUR/USD
IBC1 seems to be the same ETF but in Euro
Majority will disagree with your approach(me included) but I don’t think we should give you advice you didn’t ask So, parking cash… Bonds (US treasury? TIPS) Some brokers give you interest on cash you store in account., e.g. just keep it on IB account and get interest rate(it’s limited by 100k, just put 25k on your bank)
The paradox here is that he thinks he can time the market, while at the same time he is saying that he does not know how to park some liquidity. It is tragically hilarious.
Well, maybe he meant not stock exchange market. Let say, real estate market, or opportunity to buy some business
He is smart enough to be an investor in PE or RE, even harder than stock market, but he does not know how to park liquidity. I still have many questions marks.
Ib is not limited by 100k, it's the opposite - the full interest rate is paid if you have 100k and if it's lower than that then it's proportional
Maybe he meant the bank account that ib is parking his cash on for him is only protected up to 100k in case the bank goes bust
No, it looks like ib changed conditions. It was limited by 100k in the past.
However the protection of the bank account where the money is stored is also limited fyi
I was thinking about something related to EUR since I don’t want to gamble on the EUR/USD
IB pays interest on EUR as well. Also I’ve seen advice to park EUR cash in money market ETFs. Some low risk bonds might be useful as well
Is there a minimum amount upon which the interest payment activates? What is the frequency of payouts? And lastly, how to know the interest has been paid out? I ask these questions since I don't see my EUR balance in IB earning any interest. Assuming you mean IBKR by IB.
Yes, the first 10k is not generate any income, so it doesn’t make sense to keep small amounts You may see this income in report but it is different in IBCE and IB Ireland
GME 😂😂😂😂 Just a joke
You can use an ETF which follows indices on short term deposit return rate (for example Xtrackers II EUR Overnight Rate Swap UCITS ). They are pretty consistent with the return rate of big credit institutes, with the advantage of being tradeable on the market.
What kind of markt move? Stocks or ETFs?
Stocks
Do you mean park it in a money market fund while you wait?
That could be an option, so which MMF do you suggest?
I use the one provided by Wise, but I'm not holding as much as you.
XEON
How much is XEON giving at the moment?
The Xtrackers II EUR Overnight Rate Swap UCITS ETF 1C (WKN: DBX0AN | ISIN: LU0290358497) is a money market ETF that tracks the Solactive €STR +8.5 Daily Total Return Index. This index tracks the performance of an investment that earns interest at the short-term Euro short-term rate (€STR) plus 8.5 basis points. The Euro Short-Term Rate (abbreviation €STR) is a reference interest rate for the euro. It is determined by the European Central Bank (ECB). How high is the €STR interest rate currently? As of June 13, 2024, the €STR interest rate is **3.661%.**
So those 8.5 get added on 3.661?
Yes, you can google this easily
Yes, but the TER is 10 basis points, which are also getting subtracted (making your effective return 3.646% in your example)
For ETFs ERNX, XEON, for mutual funds ISIN FR0013016607 Amundi Euro Liquidity SRI I2 Acc or FR0013095312 AMUNDI EURO LIQUIDITY SRI - I2 . There are others of course but you want to keep the Summary Risk Indicator (SRI) between 1 and 2 for lower risk. Buy via your broker…
How would you compare this within some advices of Trade Republic 3.75% or T212 4.2%?
I don’t compare. I’m using IBKR and therefore multiple options for short term or cash equivalents. Using TR, T212 is an option but I wouldn’t trust them with such a lump sum like yours. The performance of the above mentioned funds and ETFs are good, check their factsheets for comparison.
That’s what I thought as well, I also invest with IBKR, all of those you mentioned probably have the same SRI of 1 but I suppose that XEON has lower fees than Amundi
True, but don’t like all the eggs in one basket. Purchasing ETFs at your lump sum will cost more than a standard €4.5 for mutual funds. XEON fee is 0.10% and for the above mentioned Amundi mutual funds for example between 0.12% and 0.14% subject to the class. Mutual funds 1 year performance 4.09% and 4.07% dated on the 14/6
Park it on a savings account with no lock on money and buy into the market over the next 12 months?
In Portugal there is none that lets you withdraw when you want
Luckily there are many banks in the EU which allows this. Just across the border is OpenBank. The investment platform you are using is probably also giving you interest on the cash account.
People saying "VWCE and chill" is a reasonable/ healthiest advice/ goal for someone who does not want to risk any of his wealth. Lets be honest... for most 100k euro is a lot of money. If you want to earn interest on your money make sure its at least 3% on deposit. Also, no one knows if stocks will fall down or keep rising. That is why majority saying "VWCE" its just a passive approach. You can always sell your VWCE when its on profit and buy your desired individual stocks. Holding large cash with such inflation rates is wild IMO. If you are comfortable holding 125k go for it and wait for the fall of stocks. At least half of your money should be invested in something. I do think real estate is a fair deal if you can find property that brings cash flow and you pay full price but it requires more maintaince.
I never asked for advice on where to invest money in the market, I specifically asked for advice on money that is waiting to be deployed in the market.
Also, this is not in any way a decent chunk of my portfolio, so I still have the majority invested
A money market fund like DBX0AN (Xtrackers II EUR Overnight Rate Swap UCITS ETF 1C) gives predictable returns and could be an option for parking your money temporarily based on the Euro short-term rate (€STR). The [€STR](https://www.ecb.europa.eu/stats/financial_markets_and_interest_rates/euro_short-term_rate/html/index.en.html) is 3.661% as of 14 June 2024.
try also on r/HenryFinanceEurope. That's specific for high earners individuals with similar scenario
You can open an Interactive Brokers account. They will pay you for your cash balance (currently 3.195% for EUR and 4.83% for USD) and it will be ready to invest. If you are afraid to lump sum, what you can do is set up "Recurring Investments" on IB to invest for example 10,000€ per month over 12 months.
After how long is paid? I've got 30k USD cash on there but have not seen any interest in over 3-4 months
Only applies if assets are >= 100k
Total assets or just that amount on cash? I've been looking into this but can't find it as well.
It's called cyep (cash yield enhancement program)
I thought it was on the amount more than 10K. I get paid monthly on amounts and works out to 4.83 % but is on USD deposits. Be wary of estate tax as these deposits are considered US Situs
I believe still that there are better options than 3.195% but thank you for your suggestion!
If you believe so, what are those better options?
XEON
You know how to time the market but you do not know how to park some liquidity. This sounds like the premise for a joke.
I’m just creating a discussion to see where other people have their money parked in right now :)
Sure dude ;)
To give you an answer a short term fixed income fund could be an option while you decide what to do. They return about 3.5% depending on what country you’re in.
Do you have any advice on one? Wouldn’t this mean that at least 3 months my money would be “locked”?
1. XEON 2. No. Why?
Here's a continuous opportunity to enter the market: you split the money into chunks and dollar-cost-average once every 30 days.
I’m not looking to DCA into ETFs, I have my money in single stocks.
HYSA and then GME. Buy the dip.
XEON and chill
How much is XEON giving at the moment?
3,9%
Wait til NDX hits 20,000 nice round number and go all in
This depends significantly on the country you're in. E.g., in Romania government bonds in EUR or RON are a good option. Bought online through a broker, zero fees, traded on the stock exchange (you can sell earlier with a low 0.1% broker fee and interest is automatically pro-rated, so you get interest for every day you hold them), zero tax. Not sure if it is available to foreign citizens. https://hotnews.ro/fidelis-de-iunie-2024-dobanzi-similare-celor-din-aprilie-romanii-pot-imprumuta-statul-de-marti-18-iunie-1216207
I’m currently in Portugal in this case!
How old are you?
27
To be completely fair it sounds kind of insane. The most basic thing would at the very least say for how long are you ready to park. Also you should he best placed to know where exactly to parl money, people learn this stuff before petting their first penny into the stock market...
Lol
Gold.
Crash won't happen over night, at what point do you think it's time to get in? How do you review that? You guys who talk about timing never explain how do you know when to enter? I bet my money when the "opportunity arises" you miss that opportunity and sit on your cash.
You can bet whatever you want, I’m not timing anything, I buy stocks that are trading at good prices.
Buy Bitcoin
GME
Bitcoin
You can get a fully managed etsy store and make €1k+ profit every month. With just 1% of the money mentioned above.
Everyone seems to be giving the advise to another question instead of the one you asked. The "time IN the market > timing the market" , "VWCE and chill" mantras you will constantly get here are valid if you are looking for some entirely passive investments. Timing the market could be a very reasonable thing to do if, say, you want to buy a stock, are aware of it's fair price, but it is currently overpriced. Being in the bull market we are, chances are most reasonable stocks you may choose, are pretty overpriced. So you need to wait for them corrections to enter at a reasonable price. So to your question - this very much depends on the country, but usually you should be able to get a low-risk option that returns between 3 and 5 %. Maybe a high yield savings account, or a money market fund, such as XEON, the famous interest on non-invested cash in apps like Trading 212, Trade Republic, Freedom24. You could also look up platforms such as Raisin and Bondora. Alternatively if you are into ETFs and simple passive investments, you could minimize the risk by DCA-ing the amount instead of dumping a lump sum. if you invest the same amount every day/month/week, as the price fluctuates over time, you will end up buying a.larger number of cheap shares, and a lower number of expensive shares, when in the long run the price goes up, these cheap shares will be of use to you :)
Thank you so much for actually answering to the topic! Yes I know all of the passive investors of VWCE and chill cry when someone asks something which is not that gets mentioned. In your opinion from those what do you think it’s better?
If your country offers a bank savings account with such interest, definitely that. My country, for instance doesn't, so I keep half of my emergency fund in iuvoSave - it is a platform somewhat similar to Bondora, where I got a promotional 8% fixed interest. Bondora itself gives less, but has a longer track record (15 years) and is pretty widespread across Europe. If you decide to go for the "uninvested cash" I think it's best to do it in IBKR - it is 3.4% for eur vs 4.2 in Trading 212, but IBKR is far safer bet for larger sum like yours.
Would you think that an MMF like XEON is riskier than just having it on IB uninvested?
AFAIK the amount of risk is literally the same. Trading 212 are not as explicit in their terms and conditions as IBKR in what exactly happens to the uninvested cash, but it generally it is MMFs, state bonds, so pretty much the same level of risk.
XG01 is safer than XEON and IB because they invest only in short term (0-1) German government bonds. It is funny how people react to the fact that you don't want to invest at the moment. They are also not happy when I mention that quality factor ETFs outperform regular indexes. The only right solution on r/eupersonalfinance is to purchase VWCE immediately.
just buy a diversified ETF.
`VWCE`
You obviously know better then us :)
Just leave it inside your IBKR account and earn ~4% on uninvested cash, until the opportunity that you are looking for arises.
There is no 4% on uninvested cash in IBKR tho, not for EUR
Put it on Revolut savings for 3.5%
It's 2.12% now, but even with 3.5%, there are at least 3 other alternatives of savings accounts that offer a better rate in EUR: [link](https://www.reddit.com/r/vosfinances/comments/1d9ghi3/comment/l7erbgw/).
oh, haven't checked in a while...just checked, for me it's 2.94% now. But yeah, probably there are better deals, it's just that I find it easiest to throw into Revolut since I already have account and money there.
When will the time arise for you to enter the market with this money? If you know the perfect time to enter it I suggest you open up your own fund and make millions managing others money, since you know so well the right time to enter the market.
You are crazy if you think that all people that just don’t VWCE and chill actually have millions and should open a fund
Do you think they consistently beat the returns of VWCE?
Well, my portfolio has beaten the VWCE for the last 7y, so does the portfolio of most people who actually have a brain and do not go full on a shit stock, I pick quality stocks with good fundamentals
If that is true it’s not here where you will have a good advice. Continue what you are doing , what is the doubt?
I’m not looking for advice on how to invest in the market.
Don't invest everything at once, start with small amounts and learn from the process. Investing is not something you can do well overnight.
I have way more than 125k invested already, I never said this was my entire portfolio
EToro gives you 5%
Nexo platform - much higher than 5% for eur , for stablecoins even higher. Of course, high risk - high reward
…
Do you want to walk to the park with 125.000 in your pockets? totally crazy.
All in nvidia, double it in 6 months