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re: Where to park about $20,000 for a year or so?
Posted on 8/20/19 at 4:21 pm to TDsngumbo
Posted on 8/20/19 at 4:21 pm to TDsngumbo
quote:
I don’t want to lose money and obviously I would like to grow it by a couple thousand in a year. Is there a great bond fund or something else I could place it in or should I just simply stick to a high interest online savings account or CD?
But when you say you don't want to lose money....
Is it that you can't afford to lose money because you will need the principal in a year or so? Or is it more that - if all goes according to plan - you'll use the principal + interest in a year or so for a specific goal but if it lost money you could wait it out for a few years if necessary and fund the goal another way?
In the first scenario I think a high yield savings account is the best option.
In the second scenario, I would maybe buy shares of VTI. But it very much depends on if you can wait out a dip for ~5 years if needed.
Total market has been up something like 24 of the last 30 years and 8 of the last 10, so chances are decent of making money or at least keeping the principal.
On the other hand, if you plug in $10,000 spending on a $20,000 portfolio for 2 years on firecalc.com you get a 59% success rate. This might not be the best or most exact risk assessment method but IMO it's something to think about.
LINK
If you enter those numbers in firecalc, there's somewhere in the ballpark of 40% of outcomes between 0 and 2000, 20% above 2000, and 40% below 0.
Of the 40% between 0 and 2000 they're pretty evenly spread, so let's approximate that about 10% of the total outcomes are around $400 or $500 ahead which is about what a high yield savings will give you, and 10% are below that amount and the 10% above that amount are only getting into the $1000 range.
So my napkin math risk assessment is that in a two year window you have a 40% chance of losing money, maybe a 30% chance of doing at or around a high yield savings account, and a 30% chance of respectably outperforming the high yield savings account.
This post was edited on 8/20/19 at 4:34 pm
1
Posted on 8/20/19 at 4:43 pm to Huey Lewis
You went to the mat for this. When a client comes in and requests what the OP requested, I simply state “what color unicorn do you want?”
Posted on 8/20/19 at 8:23 pm to TDsngumbo
Lot of people here are invested in CIM for the 10% dividend.
Posted on 8/20/19 at 9:13 pm to WM88
quote:I think he's also interested in getting his principal back next year, but I could be wrong
Lot of people here are invested in CIM for the 10% dividend
Posted on 8/20/19 at 9:16 pm to TDsngumbo
Step 1: open a trading account
Step 3: profit
Step 3: profit
Posted on 8/20/19 at 11:31 pm to TDsngumbo
Any bank will give you around 2 percent at a money market (boa fidelity) and keep it flexible
You can trade immediately at fidelity and may take a few hours to move it at boa
Better than a cd
Few bond indexes out there but risk a little for a buy in versus rate change
I have a bunch of one year cds maturing now and next few months and am putting in money market to be flexible and dollar average into some dividend stocks I want and waiting in case a little recession????
You can trade immediately at fidelity and may take a few hours to move it at boa
Better than a cd
Few bond indexes out there but risk a little for a buy in versus rate change
I have a bunch of one year cds maturing now and next few months and am putting in money market to be flexible and dollar average into some dividend stocks I want and waiting in case a little recession????
Posted on 8/21/19 at 5:43 am to Thib-a-doe Tiger
Aren’t they credit unions that aren’t fdic insured?
Posted on 8/21/19 at 2:49 pm to TDsngumbo
Park it in AYX
Posted on 8/21/19 at 3:05 pm to TigreB77
quote:
Aren’t they credit unions that aren’t fdic insured?
No. all FDIC insured banks. Linked one earlier in thread.
Posted on 8/21/19 at 10:43 pm to TDsngumbo
Precious metals, primarily gold. Definitely wont be losing any value with a looming recession & will probably appreciate a decent amount in that timeframe.
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