Thoughts on investing bonus this year?

Any thoughts on how you’ll be allocating your bonus this year?

The market feels overpriced right now, but assuming elevated inflation continues it seems irresponsible to hold a lot of cash. Would be curious if anyone is seeing any attractive opportunities in any particular funds or asset classes.

 

I'm on the same boat. From where I'm standing, I plan to miss out on whatever gains are left and hold on to my cash. There's a crash coming and when it happens, I'll start hunting for bargains. FOMO has already costed many their life savings, so self-restrain might be the most intelligent strategy moving forward. I rather devalue my cash than see it all burn down when the market starts catching fire.

 
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What's behind every recession, at least to some extent? Widespread demand weakness. With supply chain issues and excessive liquidity supported by quantitative easing, we'll definitely continue seeing strong demand for the time being. But, and this is my humble opinion, quantitative easing is set to stop at some point next year. The economic impact will be far too great for the Fed to fully withdraw support, so they might keep it going for a while to avoid a selloff. However, we are all seeing the trade-offs of this monetary policy. The Fed might have to choose between tightening its policies or letting inflation run wild, and I genuinely think they'll be forced to choose the former despite the economic impact thereof.

With valuations as high as they are, any sign of raising rates and withdrawn support, will bring the market down. Investors won't risk the crazy gains they have amassed over the past year and will go running with their money without thinking about it twice. The current level of spending, to put it simply, is not sustainable in the long run. Maybe we'll see 1 or 2 more business cycles, but my best guess is that the last 2 quarters of 2023 will be very very ugly. But then again, what do I know? You can't perfectly time a market downturn, but you can get really close. Whatever marginal gains I could possible capture next year are not worth the risk of what's ahead.

 

because market reminds circus currently. look at Rivian (no sales and 3rd largest market cap in the world among automakers) and Lucid (similar). look at cryptos (blatant scam promoted by bots all over Internet with trillions in market cap - look at descriptions of these crypto "projects", they are laughably filled with buzzwords with 0 meaning, and people still put their hard-earned real money in there). meanwhile, there is a record number of people who just retired and will not be putting their money into market anymore and instead will be withdrawing.

 

Still allocating largely to public equities with some thematic focuses. Probably going to put a little bit in some floating rate debt that I can rotate out if rates increase (TBD how successful that will be since asset classes move increasingly in tandem). Maybe a little to a crypto basket, I like the value prop of the space overall but haven’t been excited by any pitch for a given coin. We’re in the market for a new fund right now, so I’ll probably allocate a couple hundred there, but it’ll amortize over the next few years and I get 50/50 leverage so only a small piece of it will come from current bonus. 

 

This. They're the only two things outperforming fiat debasement.

 

Surprised by some of the answers here. Sitting in cash and waiting because you think valuations are too high? Since when does that shit actually matter. Baffles me how some people continue to play it during one of the largest wealth transfers in history. This window won’t always be open. Say what you want about risk. I’m nearing enough to exit the rat race legitimately. Sticking with TQQQ and Crypto particularly DAOs and DeFi.

 

Genuinely curious, why are the bankers on this side so risk-averse when it comes to investing? Feel like it's finance 101 to not try to time the market, and people in their early 20s can definitely survive a bear market if they just don't sell. Tens of thousands in bonus going to cash instead of equities sounds like a great way to never build actual wealth

 

People who feel like they are smart are in general are risk-averse because they feel the need to have to understand every little nuance before investing something. It’s also a superiority thing maybe. As in “I don’t have to be a degen a buy TQQQ or crypto” maybe something like that idk. I win either way. 

 

Superiority complex and inability to adjust to current investing landscape. Vast majority of people here comes from IB background = I work insanely hard, I'm well paid, anyone who does things differently is an idiot.

Times have changed. Tech exploded, crypto became a new asset class with pretty heavy use cases, plenty of coin speculation, plenty of average Joes making serious buck trading memes.

This pisses off people here. 

 

As long as you plan on holding for at least ~10 years & can stomach a few bad years, your best bet is to just put in SPY / IVV and forget about it. While it is clearly not the most ideal valuation levels to invest, it is impossible to time the market and you could end up having several massive bull years before a crash, which would hurt the thesis of holding cash. Not trying to time the market will save you some stress and should result in 8-10% annualized as long as you hold for the long-haul

 

(1) - Leveraged up as much as I can through mortgage. With the current interest rate and inflation, it's like free money from the bank as long as you have credit and good income. Try to partner with someone who knows real estate and you're just a LP.

(2) - All in on tech stocks through my retirement IRAs, it's down 40% YTD but idc. I have 40 more years to go before I even tap into the money.

(3) - The $3k rental income that I'm generating is being put into Alt coin recommended by my friends in tech to capture any short gains and move into ethers.

(4) - Small amount in cash and the rest in EFR as recommended by my group head.

(5) - Spent time investing in myself such as looking for higher pay jobs, better opportunity, time with family and health. (Health is probably the most important thing, because the potential yield on that will make the biggest impact on your life) It's also something that I need to work on.

 

And it's definitely higher than 6% because the CP lie is rigged to understate inflation. The owners equivalent rent that they use is straight out of fantasy land compared to actual increases in rent and housing prices. Then you add in all the hedonic quality adjustments and statistician sleight of hand through substitution effects and other bs, and it's obvious why it will never give an accurate picture. But yeah anybody saying stay in cash right now, especially being in finance and knowing where inflation is rn, is a retard.

 

Luckily there is a CRE sponsor in AZ with who I will be putting my bonus with as he is raising a new multifamily/ground-up fund. I have invested in his funds since 2017 and he continuously produces 30%+ IRRs. Lowest fees (1% acquisition fee, no management fee, 7-8% pref, typical waterfall) I have seen as well and he is always the top investor within the fund personally, so interests are aligned. The AZ market will continue to stay hot as it is severely underbuilt and I have read reports the current building supply wouldn't meet demand until ~2030. 

 

Just get into the habit of averaging into an index. You can buy more when its down if you want to time the market to a certain extent. 99% of the people here (and elsewhere) have no idea what they're talking about, and there are always going to be people calling for a crash based on their econ 101/WSJ/CNBC/or whatever other misinformed source they regurgitate. Often will miss out on years of returns calling for a crash, and then when a market correction comes either miss it because they're too scared to deploy or hoping for the market to go down more and miss the recovery. Or even worse, the guy that will miss a 50% move up but brag when they finally get a 5% correction and tell everyone "I told you so". A broken clock is right twice a day...

Frankly unless you're a macro investor, timing the market should be completely above your paygrade. Even then, look at how many famous macro investors have mistimed the market just looking at the last 2 years. 

 

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