the.irvine
Active member
zubs said:
If you have 300-500K in cash where what would be the best option to invest in current climate? Obviously, an option which gives you freedom to access your cash in case of an emergency.
Bull run in housing over???
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If you have 300-500K in cash where what would be the best option to invest in current climate? Obviously, an option which gives you freedom to access your cash in case of an emergency.
I would look at a CA muni bond portfolio -- with shorter dated bonds . some of the options can yield as high as 4.25% - 4.5% now and -- main advantage being no tax hit both at federal and state level
plus if things get worse , these will outperform equity markets and corporate bonds. maybe the place you hold your cash otherwise (bank) can help you w this.
I actually think CDs are a good buy right now...I think you can get 1.5% on a 6 month CD...not great but gives one a lot of flexibility.
IC makes a great point about flexibility
we are used to thinking about cash as yielding some fixed % -- 0 % in 2014 and now say 1.5-2% depending upon your bank of choice.
But there is a meaningful option value to holding cash -- which allows you to take decisive action and buy when others are reeling. this option value should also be considered when thinking about cash.
Or to ride out any economic bumps of your own. Worst thing you can do is be forced into making economic choices due to circumstances. Even if you have to make a move...having more time is almost always better.
I am not sure how those savings account work per se...I know a lot of online banks give good rates.
I think more flexibility is always better.
https://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001/
But isn't this true overall, not just the tech sector?
https://fred.stlouisfed.org/series/COMPRNFB
bargaining power is higher in these two areas given demand for specific skills. other sectors also seeing wages going higher , but more with "beta" as opposed to sector specific fundamentals. some cyclicals like construction are also seeing shortage and so are hourly laborers (in restaurants and retail) but they affects marginal consumer spending not the buyer base for affluent communities like Irvine in CA.
If you have 300-500K in cash where what would be the best option to invest in current climate? Obviously, an option which gives you freedom to access your cash in case of an emergency.
This is off topic but since we are on a tangent already , thought worth posting . These comments are not originally mine but were forwarded by a friend. My favorite is #17 --
1. If you need to spend your money in a relatively short period of time it doesn?t belong in the stock market.
2. If you want to earn higher returns you?re going to have to take more risk. If you want more stability you?re going to have to accept lower returns.
3. Any investment strategy with high expected returns should come with the expectation of losses.
4. If you want to hedge against stock market risk the easiest thing to do is hold more cash.
5. No investment strategy can outperform at all times. Almost any investor can outperform for a short period of time.
6. Brilliance doesn?t always translate into better investment results. ?I don?t know? is almost always the correct answer when someone asks you what?s going to happen in the markets.
7. Watching your friends get rich makes it difficult to stick with a sound investment plan.
8. If you invest in index funds you cannot outperform the market. But. if you invest in active funds there?s a high probability you will underperform index funds.
9. If you are a buy and hold investor you will take part in all of the gains but you also take part in all of the losses. For buy and hold to truly work you have to do both when markets are falling.
10. Proper diversification means always having to say you?re sorry about part of your portfolio. There is no signal known to man that can consistently get you out right before the market falls and get you back in right before it rises again.
11. Most backtests work better on a spreadsheet than in the real world because of competition, taxes, transaction costs and the fact that you can?t backtest your emotions.
12. Compound interest is amazing but it takes a really long time to work.
13. Investing based on what every billionaire hedge fund manager says is a great way to drive yourself insane.
14. It?s almost impossible to tell if you?re being disciplined or irrational by holding on when your investment strategy is underperforming.
15. Reasonable investment advice doesn?t really change all that much but most of the time people don?t want to hear reasonable investment advice. The best investment process is the one that fits your personality enough to allow you to see it through any market environment.
16. Successful investing is more about behavior and temperament than IQ or education.
17. Stock-picking is more fun but asset allocation will have more to do with your overall performance.
1. If you need to spend your money in a relatively short period of time it doesn?t belong in the stock market.
2. If you want to earn higher returns you?re going to have to take more risk. If you want more stability you?re going to have to accept lower returns.
3. Any investment strategy with high expected returns should come with the expectation of losses.
4. If you want to hedge against stock market risk the easiest thing to do is hold more cash.
5. No investment strategy can outperform at all times. Almost any investor can outperform for a short period of time.
6. Brilliance doesn?t always translate into better investment results. ?I don?t know? is almost always the correct answer when someone asks you what?s going to happen in the markets.
7. Watching your friends get rich makes it difficult to stick with a sound investment plan.
8. If you invest in index funds you cannot outperform the market. But. if you invest in active funds there?s a high probability you will underperform index funds.
9. If you are a buy and hold investor you will take part in all of the gains but you also take part in all of the losses. For buy and hold to truly work you have to do both when markets are falling.
10. Proper diversification means always having to say you?re sorry about part of your portfolio. There is no signal known to man that can consistently get you out right before the market falls and get you back in right before it rises again.
11. Most backtests work better on a spreadsheet than in the real world because of competition, taxes, transaction costs and the fact that you can?t backtest your emotions.
12. Compound interest is amazing but it takes a really long time to work.
13. Investing based on what every billionaire hedge fund manager says is a great way to drive yourself insane.
14. It?s almost impossible to tell if you?re being disciplined or irrational by holding on when your investment strategy is underperforming.
15. Reasonable investment advice doesn?t really change all that much but most of the time people don?t want to hear reasonable investment advice. The best investment process is the one that fits your personality enough to allow you to see it through any market environment.
16. Successful investing is more about behavior and temperament than IQ or education.
17. Stock-picking is more fun but asset allocation will have more to do with your overall performance.
the.irvine said:
I would look at a CA muni bond portfolio -- with shorter dated bonds . some of the options can yield as high as 4.25% - 4.5% now and -- main advantage being no tax hit both at federal and state level
plus if things get worse , these will outperform equity markets and corporate bonds. maybe the place you hold your cash otherwise (bank) can help you w this.
Irvinecommuter
New member
fortune11 said:
I actually think CDs are a good buy right now...I think you can get 1.5% on a 6 month CD...not great but gives one a lot of flexibility.
Irvinecommuter said:
IC makes a great point about flexibility
we are used to thinking about cash as yielding some fixed % -- 0 % in 2014 and now say 1.5-2% depending upon your bank of choice.
But there is a meaningful option value to holding cash -- which allows you to take decisive action and buy when others are reeling. this option value should also be considered when thinking about cash.
Irvinecommuter
New member
fortune11 said:
Or to ride out any economic bumps of your own. Worst thing you can do is be forced into making economic choices due to circumstances. Even if you have to make a move...having more time is almost always better.
aquabliss
Well-known member
Why would you choose a CD over Amex Savings account giving 1.75% yield:https://www.americanexpress.com/personalsavings/home
I have most of my cash here, no issues so far and good customer service, quick transfers.
Seems much more flexible than a CD.
I have most of my cash here, no issues so far and good customer service, quick transfers.
Seems much more flexible than a CD.
Irvinecommuter
New member
aquabliss said:
I am not sure how those savings account work per se...I know a lot of online banks give good rates.
I think more flexibility is always better.
https://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001/
ThirtySomethingWEquity
Active member
fortune11 said:
But isn't this true overall, not just the tech sector?
https://fred.stlouisfed.org/series/COMPRNFB
woodburyowner
Well-known member
There were some savings accounts at 2% and 2.25% recently (you would be grandfathered in). I think highest one now is 1.85%.
ThirtySomethingWEquity said:
bargaining power is higher in these two areas given demand for specific skills. other sectors also seeing wages going higher , but more with "beta" as opposed to sector specific fundamentals. some cyclicals like construction are also seeing shortage and so are hourly laborers (in restaurants and retail) but they affects marginal consumer spending not the buyer base for affluent communities like Irvine in CA.
irvinebullhousing
Well-known member
Both.