I came into 100k, i'm a soon to be PhD student(financial economics). I seriously don't know how to trade and am thinking about long term investments such as S&P 500 Index ETFs or Growth or Income mutual funds and withdrawing a portion of the principal + interest each year to have extra spending cash during PhD studies. I basically know what every finance student should, basics, long/short, reading wall street journal, avoiding whispers, hot stock tips etc. I don't want to risk it by building equity or derivatives portfolios without the proper training.
I have read some quantitative finance books but am scared to take a leap into the world of derivatives. Don't have much knowledge of fundamental analysis or technical analysis. And according to Paul Wilmott, quantitative finance has been the most successful trading science for the last century. But it seems like every quantitative science book talks about derivatives/futures and the amount of leverage from it scares the shit out of me. I don't want to risk this money, it literally is the most money I have come across my whole life(probably combined).
Joe Terranova, the former oil trader from CNBC's Fast money visited ML's Private bank & investment group while i was in college and flat out said, he used to call on dock workers to keep an eye out for the number of cargo ships that passed through to get an idea of the volume of oil being consumed. Is this the type of ish real traders do to get an edge? If so, shit, I just don't want to compete in a market place where I might lose out because I don't have the right info. It seems like every book I read doesn't compare to the tenacity of what a real trader might do to get insider information. I remember being harassed by trading interns to divulge portfolio information at an insurance firm I worked at(I was in market risk and had portfolio valuations/prices for var reporting)
Back to my question, what/how/where do I get the tools necessary to succeed at trading?
There is absolutely no way a few books or following someones knock off tips that they are willing to share will give you any edge over the market. Stick it in a low risk/low exposure account. Gov. Bonds or corporates, depending on who you trust less.
if you're looking for something interesting with a good upside, stick it in a start up and take a role in it as a job.
T
This is just my 2 cents....
I am a personal investor, albeit with a much smaller sum than you have. I ask myself, what advantage do I have over the pros and what strategy suits my personality.
What the pros have that i don't 1) I don't have a Bloomberg Terminal (at home) and I don't have direct market access 2) I don't have the technology or time at work to follow the markets and act on every news flow 3) I don't know enough about programming to build an algo that can trade for me.
What advantage do I have over the pros? 1) I only answer to myself, its my money and its up to me what I do with it 2) I don't have the pressure to trying to beat the market every quarter to justify my fees to clients 3) I can afford to be patient and take a long-term approach to investing 4) I can be as diversified or as concentrated as I like
All of this would suggest I'm better off investing as a long-term buy and hold investor and allowing my returns to compound over time. I don't know you and I have no idea what your skill set is but why pit yourself against traders who have a huge advantage over you? I don't see how you can with at their game. Play a game you can win, which is long-term wealth creation. Money managers can't play this game because they need to chase AUM or justify fees by matching their peer group every quarter. Take advantage of this.
Don't trade. Even professionals mostly trade with other peoples money.
The way I would approach the issue would be to first prepare a budget and then allocate the 100k accordingly to give me peace of mind and flexibility.
Define what the purpose of the money is and allocate it accordingly, i.e. living expenses during PhD, Long term savings, potential wedding expenses or down payment on a house, etc... How much will you need in terms of cash on hand in the next 3 years and are there any major expenditures on the horizon?
You will find that you suddenly have a lot less than $100k, but will have an idea of how to budget/prioritise and do some asset/liability matching.
The fact is with rates where they are and the fact that you aren't earning fees on this investing, it makes sense to take a conservative approach.
Disclaimer: This isn't investment advice. Just the way I would approach the issue.
I agree with Relinquis. Start at a place like Fidelity, Schwab, etc. and use one of their asset allocation tools. Keep in mind, they heavily overweight US based investments and adjust your non-US allocation higher. Also, invest in index mutual funds/ETFs and largely keep them to the big ones like, SPY, EFA, EEM, and IWM for equities.
Personally, I give you a lot of credit for not being overconfident. Most people think they can beat the market averages, which I think is nearly impossible if you aren't doing it full time (and difficult even then).
Okay, considering most people will tell you not to trade I'll take the other side of this for you. I'd stick a vast majority of it away in whatever you like best, mutual funds etc as everyone else said. Then, I'd take about 10,000 and open up an account and give trading a go. Look, trading doesn't need to be balls to walls, big dick swinging massive risk taking every single day with thousands of dollars riding on every tick of something. In my opinion, it's simply expressing an opinion that is slightly more advanced than saying, " fuck it. I'll just stick it in a mutual fund and live my life" Realize, odds are pretty stacked against you like everything else in the world. Don't even bother thinking about trading bonds, as you'll get absolutely eaten alive. Trust me on that one. Anyways, if you do want to take a portion of your money and start trading here are just a few thoughts I have.
First, wrap your head around the fact that you could lose all the money in that account. Accept it. Own it. Don't count on a cent of that money going forward. While your doing this you also need to accept you will have a lot of losing trades. You will make awful mistakes and you will lose money. In fact, you will have perfect setups and still lose money.
Once you've got the mentality down, then establish what you want to trade and what your trying to achieve. It can be options, futures whatever you want but just understand what your trying to achieve. It can be as simply as picking a high paying dividend stock you like and simply buying it at higher yields and selling at lower yields. Create an extra dividend stream by selling covered calls. Outright speculation on companies you like going forwards compared to others. Whatever. Just set your limits and understand why you are entering into a given trade. Discipline yourself and set your targets and limits before hand, especially hedging towards the downside. Always think about what you could lose in a given trade, and not about what you could make. Look for asymmetrical risk profiles in the market place.
Anyway, I'm rambling and probably not making much sense at this point. Long story short I think that done correctly with the right mentality trading is not only a great thing for your portfolio but it also is very good for helping to discipline yourself in other aspects of your life. Trading is like anything else in that you will learn as you go. You really need to just jump in, manage your risk and exposure, and then slowly but surely build up knowledge and understanding of how the markets work.
Information is everything in trading and professional traders have a near limitless supply of information compared to you. Honestly, if you start trading you are going to get wiped out. Invest that money in some long term funds.
Good points above. Invest in long term oriented funds. It is probably better than trying to do it yourself - your first portfolio will invariably contain horrific errors. Choose a few solid mutual funds and then just don't look at them. Mutual funds often outperform the market, but investor behavior (buying high, selling low) kills individual performance.
I would worry less about asset allocation if you are ok with the short term volatility that comes with an equity heavy portfolio. As Relinquis said, some archaic 60/40 equity/bond strategy really isn't necessary.
Using that money for a house might not be a bad idea, depending on where you live. The returns on housing look pretty attractive relative to the market at the moment.
Just curious, why are most of you guys suggesting traditional MF's over ETF's? The way I see it, ETF's allow you to decide on your own personal asset allocation while at the same time greatly reducing the fees associated with MF's. I can build a pretty well diversified portfolio using only the commission free ETF's offered by Schwab/Fidelity/etc.
you think calling dock guys is crazy?
There's a company out there that flies helicopters/airplanes over cushing and using top of the line laser technology, they can access at what levels the tank farms are and give an estimate to their customers on Monday of what the wednesday oil levels announcement is going to be.
When I received my first large lump sum I:
1) Paid off high interest rate debt to lock in the return (i.e. paid off 12-16% int rate credit cards that I had used in college, paid down a 2nd mortgage that I had, etc.)
2) Set aside $40k in a low-yielding savings account - I assumed that this amount would get me through a rough patch should I lose my job, run into an emergency expense, etc.) given my cash flow needs for an entire year. Most people only need to set aside money for a 3-6 month period but I am conservative
3) Invested the balance as follows: 100% equity exposure
20% Emerging Market ETFs or low expense vanguard funds 15% Domestic Growth ETFs or low expense vanguard funds 20% Domestic Value ETFs or low expense vanguard funds 15% Domestic Small Cap ETFs or low expense vanguard funds 10% REITs/MLPs I had no bond exposure because I am young and wanted maximum risk-reward
I took the balance of the money and invested it in individual domestic stocks that I knew well and felt I had an edge in based of my job and industry knowledge along with 2-3 stocks that were recommended to me by trusted mentors (which I also independently researched).
Summary: Everyone's risk tolerance and cash flow needs are different but I continue to believe in age related high risk/high reward tempered by diversification
I like your asset allocation, but wouldn't you have a low fee bond fund in there simply for correlation reasons (say 5%) and in case you have a Japan like bond boom or deflation?
Pay off/down debt you have (you will be making money by not paying the interest)
Purchase about 30-45 low correlating stocks, that you believe to relatively cheap. The P/E of the S&P is still relatively cheap.
Buy Tax-Exempt Muni Bonds
Only agree with #1 if the interest is above OP's expected return on his portfolio. Disagree with #2...buy an ETF and save on transaction costs. #3, OK.
You have a point on number two but take this into account. Typically, if you purchase an ETF, your research will not be as extensive. If low amounts of diligence is put into an ETF and the it takes a hit, the probability of selling at the wrong time will be higher because conviction will not be there. Passive management of an ETF could be killer for his holdings because rebalancing rarely takes place. If he actively managed and researched his own stocks, confidence in his selections will be higher and result in a longer holding term and probability of higher returns.
Paying off all debt regardless of interest rate I believe would be better. When you pay down debt, you know for a fact you are saving money. If you don't achieve expected portfolio return (or even negative) you are screwed. People despise losing their capital more than they enjoy making money.
Buy gold bullion. We're looking at probably a 10-20% chance (I'd actually put it at ~40%, but that's just me) of a major sovereign default situation (U.S./Euro/Japan) over the next few years, which will almost certainly be associated with hyperinflation. Even if this wide-scale default is not your expectation (e.g. probability repo). What are governments doing now? Shifting all of our debt from 10 or 30 year maturities, to 1-2 year maturities. That means every year or two we're going to need to roll over the full $16T in notional value. All that needs to happen is one of our creditors needs to opt not to renew, and we're fucked. It will be exactly the same thing that happened with Bear and Lehman, except an order of magnitude larger. The government will have an out - it can print $. This isn't a real solution in the long term, but they'll do it anyway. So yeah, buy gold.
Disclaimer: My PA is about 80% tied to gold and silver.
Thanks for all the posts.
fwiw if any monkeys need an answer to the "what would you invest if I gave you xxx question" these types of threads/posts are more useful imo than most of the usual cookie cutter BS answers...
Made the front page of WSO, YAY!
Whoever said to buy Muni bonds is wrong. I am assuming that you are not going to be in a high tax bracket if you are a PHD student. Munis have lower yields due to their tax advantages. If you are considering a muni and first you need to calculate the taxable equivalent yield(muni yield / (1- your tax rate))
Do not put all your money in gold: it doesn't pay a dividend and it is near an all time high. If you want to pursue quantitative trading, keep in mind that the strategy will cost you a lot more in commissions and most of your taxable gains will be short term.
I like stat arb or pairs trading as far as quant strategies go, but don't expect massive outperformance. Also, when you find a strategy that works you need to monitor it, because it will usually stop working after a while and you will need to come up with something new. If you want to seriously give the quant route a try, I would use interactive brokers' paper trading account www.interactivebrokers.com.
Also, there are managed sites that will design a portfolio like www.financialtailor.com or www.wealthfront.com. Wealthfront uses MPT to make a portfolio of Vanguard etfs, Financial Tailor is a brand new company but it allows for more control if you want to avoid certain classes of stocks for ethical reasons.
What you say about munis having a lower yield is generally, but not always, true.
http://www.bondsonline.com/Todays_Market/Composite_Bond_Yields.php
True, I was speaking in generalities. There are some higher yielding munis that are attractive, especially in states like NY, IL and CA where there are good pockets that have been discounted more than they should have. I am far from an expert in Muni-land, but I would not make a blanket recommendation to buy based on the simple fact that most grad students are in a low bracket. For equivalent credit quality and maturity most munis will have a lower yield.
My biggest long term concern is overreaching for yield in both junk bonds and longer maturity bonds. I don't see it happening any time soon, but I do think that rising rates will come out of nowhere and surprise a lot of conservative investors.
pay off debt imo
agreed!!
surprised no one said this...real estate. literally dirt cheap and rental income is great to have. start an llc and now all your student expenses become deductible.
Curious as well, I love the idea of renting but those I know in the Re business around me say to avoid it unless you really want to put your heart and soul into it.
I'm purchasing a starter home, newer construction 2007 for $115k, just finished houseshopping today and truly found the home I would imagine living in. I don't want to invest it all into homes because of liquidity, I'd have to hold onto the homes for awhile, ya know.
Great thread picture.
Here is what I'm looking at: Of the $100k. 25k down payment on a home 5k to pay off my unsubsidized student loans(I have 10k in subsized loans left, I figured, they pay my interest while i'm in school, so I might as well take advantage of it.) 70k to invest in the market
5% - Vanguard Healthcare ETF: VHT 25% - iShares S&P 500 Index Fund ETF: IVV 15% - iShares S&P 500 Value Index ETF: IVE 25% - Spider S&P 500 ETF: SPY 15% - Vanguard Long-term Bond ETF: BLV 15% - Vanguard Total Bond Market ETF: BND
My reasoning is as follows. Someone mentioned zero bond exposure. I'm looking to preserve some of the capital just incase things don't work out. I guess my risk tolerance isn't high. I chose Vanguard's bond funds because the majority of holdings are in AAA securities for the long-term bond ETF. I know annual yields are low but I just want some money to be safe.
On another note, I chose the healthcare etf as a gamble. I presume the healthcare industry will see a lot of profits when everyone has to buy health insurance. I chose 5% not to risk as much.
The remainder is going into S&P 500 Index funds for long term growth potential.
What do you guys think?
I would reduce the size of the invested part of the portfolio to set cash aside for living expenses and to tide you over until you become employed, especially since you are buying a home and are 3 years away from being done with your PhD. In my opinion, that's better than keeping it all in bonds as they still have price risk. So set aside an extra 20k or so in a separate cash account. This will allow you to be a bit more aggressive with the portfolio if you wish.
Also, 92% your equity investments (65% of the investment portfolio) is correlated to the S&P 500 essentially. It might make sense to diversify some of that into other equities (other developed or emerging markets), say 5-10% of the investment portfolio.
Disclaimer: This isn't investment advice. Just the way I would approach the issue.
Relinquis: Good point. I'm setting aside 10k in a money market fund. I was offered a research assistantship worth $21k/year. After taxes/basic living expenses(food/shelter), that leaves me with $700/month. I'm not a big spender. My biggest luxury is cigarettes racking up $150/month. I assume another $150 for gas. $100 for insurance. Maintenance, not to worried about, I drive a honda heh. And $300/month to spend going out. In class 4 hours a day + 4 hours a day of working + studying on the weekends doesn't leave much room for play. I had the same schedule as an undergrad, I didn't spend much. Currently, in my gap year, and i'm averaging $650/month living at home. But I did splurge occasionally like spending $1000 on clothes or something of that nature. I always finish off the semester with a trip to vegas, another $0-1500, depending if I win at poker.
Do I misunderstand, you're going to buy a house and expect your expenses to remain at undergrad level? Too many optimistic assumptions are built in here.
Amigos, it's pretty simple. Markets are mostly efficient over the long term. If you want yield you need to take some risk or buy something classy that's hard to value. Then it comes down to some coin flips. Heads, tails, heads, tails. The best you can do is diversify your coin flips. That's the basis of finance. Stop looking for handouts. Be prestigious.
If i had a lot of cash i'd prolli buy a house. Housing prices are slowly increasing and with QE-INFINTIY mortgage rates should continue to stabilize or decline around the current 3.3%(?) not sure the exact numbers but its pretty fucking low. But I did hear WFC are the only ones in town really doing mortgages right now.
You said you don't know much about investing. If that's the case, then the answer is simple: put most of your money into an index ETF, and the rest into low-risk corporate or government bonds.
Here are 100 ETFs to choose from: http://etfdb.com/compare/lowest-expense-ratio/
I'd used it to travel the world. Upon graduation and beginning of employment it will be difficult to take a month off for holiday. I'd use that money to travel to emerging markets, the middle east, etc., places that are far and difficult to travel to while holding a job. Not only will you experience different cultures and get exposure to different economies but your purchasing power will be double/triple in many of these places. In addition, the people you meet will open your mind to new ideas/business opportunities that you would not be exposed to living in the G7/9 countries. Use this money to invest in yourself, you will have plenty of time post graduation to make it back and worry about investments then. Also, with global equities markets in a slump and rates returning close to zero I don't see it being worthwhile. Hope this is useful.
With 25% in both IVV and SPY you're 50% indexed to the S&P 500. What's your rational for being in two nearly identical funds? Also, IVE is very highly correlated with SPY/IVV. You're diversified in the sense that you own a broad market index, but your three major holdings are all pretty much the same thing - large cap US equities.
I would suggest you look into further diversifying into a broader range of market segments - US small caps, REITs, international equities, TIPs, etc.
The guys at Bogleheads.org are really helpful and intelligent when it comes to personal asset allocation stuff. It might be worth heading over there and seeing what they have to say.
FYI, I work as a trader but don't actively trade my personal account. In my retirement accounts I hold target date retirement mutual funds (VFIFX, specifically). In my taxable brokerage account I utilize a system very close to this:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962461
I'd pay off whatever high interest debt you have.
Some good ideas here, what you should consider is that YOU COULD BE WRONG. Dramaticized for effect but meaning putting all of it one spot is assuming you won't lose.
The simple version is to put - 25% in cash or some "high yielding" cash equivalent - 25% spread around in solid stocks that pay a dividend - Wal-Mart, JNJ, etc - 25% gold - 25% real estate or REITs
This way no matter what happens you can't get hurt too badly, and you won't get crushed by inflation. Obviously if you have any debt that should be your first target. And also... as a trader, do NOT start trading with it. If you want to trade start with play money until you have a track record.
If you really don't want to manage your own account, use betterment.com and let them auto-allocate for you between stocks and bonds. You pay .15% of assets in fees, the account if fairly liquid, you can average your way into the account with recurring deposits.
StrongMan, I know just how you feel. I'm terrified of risk and probably always will be. Index funds would have been OK for me, but... in my second or third year IRS regulations changed and my firm could no longer accept accounts from customers with American nationality. And since I worked for the company, I couldn't open an account anywhere else. This basically closed the entire US stock market off to me. So I was stuck with low-yielding, inflation-exposed cash only! What did I do? Wait until I could get into real estate.
I second the real estate supporters. RE is safe in a way that stocks aren't. You own an apartment or house, you rent it out. The value of that land and building might go down, but it's never going down 90% like a stock might.
I ended up saving plain old ordinary cash until I could buy my first apartment for about $120k (cash; no RE loans for me where I live). Now I own it, have renovated it, and have another $120k in cash. The stock market is what I work with for a living, but I don't entrust my own life to it: my money stays in cash, earning 0.15% per year. If I can afford a better apartment, I hope to move into it and get nice, safe, steady income renting out my first one.
If you're terrified of risk, this might be a way to go. Then again, I'm terrified of risk and hyperinflation, so...
What To Do With $100k Right Now? (Originally Posted: 06/20/2014)
Guys,
I'm looking for some advice on what to do with around $100k in terms of business prospects or investments. I have some money in equities and funds so I'm trying to go towards some unconventional (while at the same time, classic) investments. I recently liquidated some overseas real estate investments and would like to do something other than leave it in a CD/Annuity/[Enter top growth fund here].
I was recently thinking about buying an investment property in an area of Brooklyn that's still untapped as far as commercialization and is just starting to be gentrified. People in NY might know this as East New York.
If not that, opening up a Little Cesars in NY seems it could be a fair shot at a good return haha.
Thanks in advance!
I already do this but get my shopping list and wait to write options on my favorite dividend players. If I get assigned I flip the script and write the calls (covered), re-invest the dividends etc. Worst case scenario in 3 years my cost basis is roughly at a 30-35% discount from where I purchased on only the highest quality stocks with best growing yield. It doesn't mean there isn't risk involved, and you had best understand the risk of using options thoroughly before employing them. Volatility is very low at the moment and most companies are very overvalued at this point in the market cycle. So just wait for juicier premiums and some discounts.
Basically think of it as being able to get paid, to buy into discounted and growing cash flow. So I get a better yield than owning a successful MCD franchise, with lower overhead/buy-in and can liquidate at the touch of a button. I probably made it sound easier than it is, but it is always amazing to me how many people have lost touch with investing.
Don't buy a business or franchise.
A franchise is a HUGE time sink. I would only tell you to get into that market if you're going to own like 3 or more so that the time=profit is worth it. What you do with the money really depends on whether or not you actually need this money short term or want to have the option to cash out right away to transition into something else (ex- you want to pick up an investment property).
@"ArcherVice" I wanted to invest in a few properties over the next year or two. Any advice on this?
Real estate is a bit outside of my wheelhouse unless you are talking about a vacation rental in Europe, here in the states I know some people that have bought distressed properties with cash and flipped it into rental income and seem to be doing very well. I would emphasize 'seem'.
For my own purposes I once ran the numbers on a 2 million dollar 25 unit complex, 20% down and 4.5% interest rate. Which the numbers sounded great, but as anyone involved with real estate will tell you... it's never rosy. Sink breaks, management fees, late rent and whole lot of overhead can put a lot of pressure on your margins but the headache either stays the same or amplifies.
I will say avoid condos for investment purposes, first to get hit and last to recover plus HOA dues can be stifling.
It depends on age and goals — but if I had 100k, I’d put all of it into a company that I could directly influence or control, or even one that I loved.
If you're looking into investment properties on the NYC area, look into Newark and Journal Square in Jersey City, within walking distance to the PATH. Prices are low and gentrification usually happens near food public transportation. Newark has a very long way to go before becoming gentrified, but Journal Square is already on the way. Prices already reflect this difference.
Unless you're going to be there yourself, I wouldn't advise opening a business. From everyone I've spoken with that owns small businesses like that, they all say you have to be there or it will lose money. Employees steal, managers mismanage, etc...
Besides, with all the competition out here (in NY) and the high rents/costs, it would make it even worse. 100k isn't a good amount of money to be doing that with either, you need more money than that. One big reason businesses fail is under capitalization
I don't have a business myself, but it's been something I've been looking into for quite some time now (leaving finance and opening a small business) and just telling you what I've been told by numerous owners, far and wide.
I know. I've been rethinking the whole business thing. It seems like oen can just get a franchise and be follow a template to a good icnome, but when you look closely at it and talk with other franchisees, you see it's a full time thing. There is no part-time franchisee unless you have multiple. I can't be running a franchise while working full time.
You have $100k (Originally Posted: 09/30/2015)
You have $100k in your checking account for whatever reason. What do you do?
Me? Probably 25% REIT, 25% CD, 25% SXP (S&P 500 Index), 25% money market.
Would anyone here lever up to $500k and buy some sort of real estate? Buy something cash flow producing?
Sparking up conversation on a slowish day.
It depends. What's your life situation? Are you in your 20s, single and in school or in your 30s, done school, married with kids?
JV with someone else that has more capital and lever into something at a reasonable cap rate. If you don't know anyone, then REIT, CD's are worthless, have you seen the S&P lately? Money market... no. But like previously said, depends on your lifestage and risk profile. I'm 30s with a wife and kid, and to me equity in a decent shopping center is a no brainer, but I also specialize in retail so I understand that market in depth.
buy cheap real estate in some coastal city in an "emerging" african country
I wonder where the rest of my money went
Your life situation is your life. Do you want me to tell you what your kids' names are too? It's a hypothetical, general, fun question---Jesus.
I picked $100k because it's big enough to move a needle and small enough to never get talked about. Very unhelpful answers overall--well done.
People sh*tting on CD's, bonds and and s&p500 make me laugh. Judging returns on the s&p because of the last 8-10 month return? If anything the over valued stock market has been somewhat corrected. No one can deny long term stock market returns. I'd rather stick 100 grand in a 1.5% 2 year CD than a 2% stake in a 2.8% capped 90% full class B office building etc. good luck getting out at a residual cap anything like what you're buying. My investment pattern with 100k is a "wait to invest" type strategy.
Anyone have anything better? Any cash flow type investments out there? ATM machines, vending machines etc? Fast food JV? How about buying a 4 unit house in upper state New York or western MA for 400k and get a 8% return with lots of vacancy risks? Thinking out loud.
pretty puzzled why you are trolling on previous posts...life situation helps understand investment goal (growth, income, preservation, etc). You asked a wealth management question and he answered with the first thing any FA needs to figure out....you work in RE we get it. All your options listed are cash flow...other people may want growth...and public REITs will get busted when yields elsewhere rise
Buy SPY tomorrow morning and close your eyes for a little while. Thank me later.
25k US large caps, 25k small caps, 50k O&G with a slant towards E&P
CD's? Really? Have you heard of inflation?
Keep it in cash. You never know, when you are too drunk to sign on your black amex for that mathusalem bottle you just ordered
70% equity portfolio of my own choosing, 15% US/Germ/UK sovereign, 10% REIT, 5% EM/speculative
Alternatively lever, buy property for $400k, put $60k into property and flip or buy and rent if I wanted something less active.
Pretty vanilla but one of those three strategies.
I'd examine Q4 trends, where the S&P has delivered in excess of 5% returns on 4 occassions in the last 5 years. Then probably take into account factors like the Spanish elections in December, with the anti austerity parties potentially reignitiy euro political risks.
And then I'd stick 90k on Red, with 5k hedges on 0 and Black 31.
Personally I would hold cash and wait for the next downturn. People say we are in the 7th to 8th inning and assuming (Big assumption) these people are right....I would wait hold cash and when the dip happens invest in real estate. I am in mid to late 20's and aside from my 401K I have everything in a savings account. I have family in CRE so that's a bit of a leg up but I am hoping to JV in order to realize a bit more upside. You are in real estate...assuming you don't have kids to feed why not invest in the industry you work in and potentially learn something along the way. Also considering buying a house fixing it up and renting it out ect.
CDs? Money market? Hopefully reits that have exposure to millennial housing and the like
Are you retired with 100k lol
I'm sort of with those who are in cash. I'd keep it in cash and await a really stellar investment. My regular investment portfolio is almost 100% retirement assets (401ks, IRAs). So if I had excess, non-retirement investment money I would hold out for a superior opportunity--real estate, small business, start-up w/a phenomenal product and/or business model, etc.
If you're gonna stay on the sidelines for a few years till RE goes pop again...
In 2010 - 2012 I saw several investors here in San Diego close on apartment deals well over $1MM with less than a $100k. Old school AITD style. Pay the loan current with $50k then slide the seller $50k to walk. These guys are sitting really nice right now.
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