Investing General Discussion
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Hateyou
Not Great, Not Terrible
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Basically what the entire population understands except the politicians and their blind faithful followers.
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Tmac
Adventurer
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The only specific advice I got on what to do was from
Jackie Treehorn
who said put it in near-nav SPAC's. The other general feedback was advising against investing in the market since it was as ATH. I guess the sentiment being that when its at the top it's more likely to come down.What's your advice? We've got $40k in cash.
Sanrith Descartes
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Why do the think the gubmint is crowing this "there is no inflation" mantra. If there is "no inflation" they can keep printing money out of air.Its gonna be all about massive government spending;
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Sanrith Descartes
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What is your time horizon for using the cash? if it is 5+ years, it doesnt matter what the prices are now, invest it in the SPY/QQQ/FTEC etc and dont look at it for a few years so you dont see the bumps along the way. If this is 40k for "trading" that is an entirely different scenario.The only specific advice I got on what to do was from
What's your advice? We've got $40k in cash.
Furry
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There's been some people betting against the market lately, but you won't find me recommending cash or staying out any time soon. The way things are going, I'm even considering doing a refi on my house and investing every penny of value that I can. Only hitch in my plan is waiting to see how this new tax bill plays out. If it's one thing I enjoy doing, it's not paying taxes, so gotta be as efficient as possible.
Sanrith Descartes
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Its almost time for the obligatory weekly discussion of investing vs trading. Traders hold a cash position because they are constantly putting it to work. Investors should be investing cash as soon as it hits the account. I have shrunk my trading cash position by about half the last month or two and put it into long term investments as the opportunities presented themselves (HD, WMT, PG, KMB).
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I seem to recall you said you might need it fluid inside of a year.The only specific advice I got on what to do was from
What's your advice? We've got $40k in cash.
Unfortunately I dunno how safe near NAV SPACs even are at this point considering many of them go below NAV.
How about carefully monitored sub-NAV SPACs?
Tmac
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I think we want to be able to buy into the housing market once foreclosures crank back up in the next couple of years. By that time we'll probably have $100k in savings. So, if there's something better to do w the cash in the mean time, I'm all ears.
Furry
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That's a lot of optimism. For me, I'd split it up 4 ways. 20% Russel, 30% S&P, 30% Mega-cap Tech, 20% grandpa stocks.
Pretty close approximation to what I currently hold.
Fogel
Mr. Poopybutthole
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Invest your money and put as little as a down payment on a house as you can. Your gains in the market over a couple of years will eclipse anything extra you pay on your mortgage.
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Sanrith Descartes
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The challenge of investing cash over a shorter time frame is the uncertainty of market movements. You end up increasing your risk.
Cash sucks currently. But... You have to model estimated return vs the opportunity cost of sitting in cash and decide if that possible return in investing it is worth the risk of having the principle be down at the time you want to cash it out.
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Furry
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To be truthful, I'd just charge out and buy a house right now if I were him, putting the least amount of cash into it as possible. Expecting the market to tumble on housing seems like a poor plan atm, especially with inflation hitting material goods for houses so hard. I dunno what's keeping him back from going that path, but if something is, I'd still pick the markets over sitting on things.
Buying my house was one of the best investments I ever made. First few years were difficult, years 5-10 felt normal, but as I go into years 10 and then 15+ this place became almost chortlingly easy to pay for. My mortgage is less than half of the average rent around here, and I could sell the place for more than every dollar I've put into it. I think buying a house is the absolute best investment, despite my abject fear of owning rental properties.
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Sanrith Descartes
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I am personally generally risk averse (even though I invest in SPACs) so the opportunity cost of sitting in cash or just buying the house now for minimum down is the route I would choose rather than risk being at a 10-20% drop a year from now. Especially for something as important as a house purchase. But as I said, I am risk averse.
Tmac
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If I buy a house now I'm going to be in for a $50k - $100k premium.
Considering we can easily pay off a house in 10 - 15 years and the fact that I don't like to carry debt in my personal finances, I don't want to buy a house at the top of the market.
Foreclosures ramp up again in July and will prob take until January to impact markets. So, I'd like to wait and see what happens then.
Considering we can easily pay off a house in 10 - 15 years and the fact that I don't like to carry debt in my personal finances, I don't want to buy a house at the top of the market.
Foreclosures ramp up again in July and will prob take until January to impact markets. So, I'd like to wait and see what happens then.
Furry
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I have an extreme aversion to debt, but I've realized that house debt is good debt. The interest is extremely low, and this is definitely NOT the top of the market. What ownership taught me, is that it pays itself off over time. At first I took your approach of I want to pay it off in 15 years. Now I'm much more of the mindset of how can I put this easy debt to work?
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Sanrith Descartes
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You are assuming that the Biden Administration doesnt keep extending the foreclosure moratorium until 2024. You are facing risks and unknowns at every angle. If you are willing to risk some sort of market upheaval for returns then throw it all into the total market (like ITOT) and pray the US economy doesnt collapse in the next 8 months. If it does, then buying a house is probably also going to be seriously impacted.
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Fogel
Mr. Poopybutthole
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As furry said, there's different types of debt. There's a big difference between a mortgage debt at 3% interest backed by a stable asset and an unsecured loan or credit card debt at 6-20% interest. S&P500 averages 8-10% return a year easy, over 3-4 years with 40k that's a huge amount of money. Also, what area are you looking to buy a house in? Not all housing markets are the same.
