
Ask HN: I have $450K cash, what should I do to maximize my return? - plut0
I recently came into some money and now I have $450K in cash burning a hole in my pocket.<p>I have about $50K in an index fund, own land worth $150K (paid off) and another $200K in industrial real estate investments.<p>Given this spread, what should I do with the cash? I&#x27;m not comfortable investing the entirety into an index fund, given the current socio-political climate.<p>I&#x27;m located in the Midwest, USA.
======
jordanmarshall
Just skimming some of the replies here makes me think you will get better
advice on the Bogleheads forum [1]. Despite the minimalist appearance it is
actually a great place to get sensible financial advice. I would start with
the wiki page on managing a windfall [2], then search through older replies to
similar questions. This kind of question gets asked there a lot, so there
should be some recent threads.

[1] [https://www.bogleheads.org/](https://www.bogleheads.org/) [2]
[https://www.bogleheads.org/wiki/Managing_a_windfall](https://www.bogleheads.org/wiki/Managing_a_windfall)

~~~
arcticbull
Bear in mind Personal Finance is pretty conservative. Depending on how much
time you have in the market you can take some more aggressive bets. I'm not
suggesting r/WallStreetBets style investing but something like a risk parity
adjusted pairing of 3X leveraged S&P with 3X leveraged treasuries can yield
dramatically better returns over time [1]. I'm not recommending it per se, to
each their own risk tolerance and research, but suggesting that if you have
time in the market, consider being more aggressive.

I'd suggest something like this.

(1) Have 6 months of expenses set aside.

(2) Max out your tax-advantaged retirement accounts.

(3) Allocate some amount of capital to traditional or conservative
investments, and some amount to more aggressive plays. The more time you have
in the market, the more aggressive you can afford to be. Having both types of
investments will give you the comfort you need during rough times that your
riskier plays come through eventually.

(4) If you're looking at property, consider setting aside a down-payment. Keep
in mind that if you're employed, buying a house in cash may not be the optimal
strategy as you can deduct large quantities of your mortgage payments, giving
you, with 20% down, a 5X leveraged investment in real-estate with deductible
expenses and historically-low interest rates. Mortgage interest rates are just
a hair over inflation, and when you deduct the interest from your taxes,
you're actually saving money with a mortgage.

(5) Now that you have a large chunk of capital, you can consider financing
some purchases yourself at extremely low rates by taking advantage of margin
borrowing. InteractiveBrokers offer 1.5% interest margin loans, and you could,
if within your risk tolerance, borrow some amount of money collateralized by
your (safe) equity positions. This 1.5% interest is also tax-deductible.
Obviously be careful, a margin call is something to avoid, but against a $450K
portfolio, I personally wouldn't sweat borrowing $45K.

One thing I was able to do personally is borrow enough on margin to make a
down-payment on a property. This allowed me to deduct the entire balance of my
mortgage, beyond the $750K cap, and at 1.5% the margin interest is much lower
than if I'd financed the whole thing.

[1]
[https://www.bogleheads.org/forum/viewtopic.php?t=272007](https://www.bogleheads.org/forum/viewtopic.php?t=272007)

~~~
jannotti
Please stay away from leverage equity index funds.

[https://capitalallocatorspodcast.com/wp-
content/uploads/2017...](https://capitalallocatorspodcast.com/wp-
content/uploads/2017/03/The%20Surprising%20Cost%20of%20Volatility.pdf)

Edit: For more clarity - risk parity can make sense, but I don't think you
ever need to use leverage on your equities to get risk parity. The fundamental
insight of risk parity investing is that at commonly recommended ratios
(50/50, 60/40) the risk (variance) from equities totally dominates the risk
from bonds. So the risk parity advice is usually something with a much higher
bond mix, but the entire portfolio is leveraged. But DO NOT use levered ETFs
that recognize, say, 3x the DAILY movement of the S&P to do this. They don't
do what you think. Read that link, or compute the following two scenarios:

1) Market goes up 1.1% on odd days, down 1% on even days. That yields about 9%
(200 trading days). But a 3x daily etf product would only get you about 22%,
not 27%.

2) Market foes up 1% on odd days, down 1.1% on even. That, sadly, means you
lose about 11% on the year. If you use a 3x DAILY etf product, you lose around
75%.

~~~
arcticbull
Please read the write-up before replying with blanket statements that aren't
relevant in this case :)

That issue is addressed in the bogleheads post explicitly ("How much does the
leverage cost?" and "Don't you know that leveraged ETFs are only intended to
be held for one day?"), basically the ETFs are risk parity adjusted, and the
volatility in the ETFs actually what generates the returns. The strategy makes
money from volatility, and the 3X leverage is used to add volatility in,
exaggerating the returns.

I think you might find the post interesting because it seems like you are
interested in investing. What you're saying is again explicitly addressed
there, and factored into the calculation. They work an example of that kind of
decay, and how it's mitigated. Specifically, it doesn't matter that you have
volatility decay in one of the ETFs because they're uncorrelated, and when one
goes up the other goes down, canceling out the effect.

Your blanket statement does not apply to this specific strategy. It's not
wrong in general, but it's not relevant here.

If you don't want to read the bogleheads write-up it's also addressed on
Seeking Alpha [1].

> "That, sadly, means you lose about 11% on the year."

Not if, as you see in the write-up, you pair it with an uncorrelated 3X
leveraged asset and rebalance periodically.

The post includes a backtest to 1987.

[1] [https://seekingalpha.com/article/4308489-why-leveraged-
etfs-...](https://seekingalpha.com/article/4308489-why-leveraged-etfs-might-
be-perfect-for-achieving-retirement)

~~~
blacksqr
I've been using 3x ETFs for the past few years to pursue a Permanent Portfolio
style strategy in one account, and an All Weather strategy in another,
rebalance annually, and both have been doing well.

Low net volatility, high returns. Backtesting of the strategy shows total
returns just under 3x the return of the unleveraged portfolios, just what I
expect given the leverage costs.

I expect both strategies to be both market-agnostic and age-agnostic. About as
close to fire and forget as you can get.

~~~
kristopolous
The right advice is "don't use a leveraged fund unless you want to be involved
and look at the market every day"

I've made good money on them as well, but I shuffle money in and out
frequently.

It's not a good strategy unless you really want to study things.

~~~
arcticbull
That’s true in general, but this strategy is basically set it and forget it
(rebalance quarterly for best results), and it works because it’s been
carefully balanced to offset decay.

~~~
rayuela
how do you offset the decay?

~~~
arcticbull
It's all in the post ("Don't you know that leveraged ETFs are only intended to
be held for one day?" section) but there's something we need to clear up
before we start.

(1) What people refer to as "decay" is just the way the the daily exposure
works on these ETFs. To quote the article:

"Let's say over five days the daily returns of the index are +1%, -2%, +3%,
-4%, +5%, and you start with $100."

"At the end of the five days your $100.00 becomes $102.76."

"Now let's use a 3X leveraged ETF. Ignoring ER and other costs, the daily
returns are +3%, -6%, +9%, -12%, +15%."

"At the end of the five days your $100.00 becomes $106.80."

6.80 is not 3X 2.76, and it's because down days leave you with less exposure
the following day, so you need a bigger up day than the preceding down day to
make up for it. However, as the article points out, this dynamic works for you
in ETFs that exhibit positive momentum. Since "stocks always go up" \-- at
least the S&P always goes up over time, so far -- this dynamic works to your
favor and the total return of UPRO to date has been _5X_ the return of SPY.

(2) UPRO and TMF are uncorrelated, and so the positive momentum of SPY causes
UPRO performance to exceed 3X, and offset some of the lower-than-3X
performance of TMF over time. For the record since 2017, the performance of
TMF is 2X that of TLT, give or take.

(3) Further, the way this makes money is actually when the S&P drops 10%, UPRO
drops 30%. As people flee assets, they buy treasuries, pushing TLT up 6-7%,
which causes TMF to go up 20%. Then at rebalancing time, you sell TMF and use
it to buy UPRO, so you sell the 3X winner, and buy the 3X loser at a deflated
price. When prices normalize, the extra shares on the losing end in
conjunction with positive momentum (and the fact you've reduced the size of
your winner before it falls) put you much further ahead than if you weren't
using leveraged ETFs.

This strategy makes money on volatility, and should be agnostic to market
performance. It actually held up really well during March.

~~~
kristopolous
Part of what I do is something I'll call "pile of reserve" investing. I'll
hold like $X in some leveraged fund but I have 50x in cash on the side so if
things go south I can dollar average my way to profitability. This also
requires constantly winnowing down profitable investments to insulate from
risk. I've been doing this for about 3 years. About a 3x return on my current
holdings, which is about 50% of the maximum I've had in.

This will very likely make less money but really, I can pay all my (admittedly
very modest) bills with my portfolio and have returns left over + my actual
day job income so honestly, why do I care?

I come from a privileged background and I lived that life. I didn't like it
and have no interest in returning to it.

People have to find the strategy and mix that works for them.

------
throw0101a
> _I 'm not comfortable investing the entirety into an index fund, given the
> current socio-political climate._

Over the the long term there is not really anything better to do with it than
equities: the Great Depression, World War 2, gold standard retirement, 1980s
inflation, etc. Even if you only invested in the peaks, you'd still do quite
well over the decades:

* [https://awealthofcommonsense.com/2014/02/worlds-worst-market...](https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/)

Jumping in with a lump sum amount can be quite daunting, so what you can do
instead is put in (say) 40K every month over the course of a year or so:

* [https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...](https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/)

Certainly better than sitting in cash. If you're worried about volatility,
then also invest in some bonds funds: 60% stocks, 40% bonds? If you want more
growth, 70/30 or 80/20 maybe.

And while the S&P 500 gets a lot of the press, a total market fund is what
Vanguard is steering their own employees to:

* [https://www.marketwatch.com/story/bogle-explains-why-vanguar...](https://www.marketwatch.com/story/bogle-explains-why-vanguard-employees-wont-have-a-flagship-sp-500-fund-in-their-401k-2018-06-07)

See also:

* [https://www.pwlcapital.com/should-you-invest-in-the-sp-500-i...](https://www.pwlcapital.com/should-you-invest-in-the-sp-500-index/)

~~~
quotemstr
I'm an index fund skeptic. What would happen in a world where _everyone_
invested in index funds? Capital allocation would go haywire. You can't create
value out of nothing. ISTM that the more people push on index funds, the more
overvalued equities in the index become relative to those outside the index.
I'm not sure that retrospective analysis saying index funds are the best
applies going forward in a world where index funds are much more popular than
they were in the past.

~~~
branweb
Not the op but I wish downvoters would comment giving their reasons. I
remember seeing something about this in the atlantic a while back, and it
would be good to know if/why it's a bad argument.

~~~
quotemstr
There's this weird social energy surrounding index funds that's very
aggressive about preaching that they're the only viable option and that
everything else is ridiculous. To be honest, this energy is another input that
increases my skepticism of the whole thing. These days, whenever you see an
argument downvoted instead of rebutted, there's likely something to it.

~~~
mancerayder
I think voting can mean different things to different people.

Some people upvote or downvote because they agree or disagree. They view it as
a "vote" for the opinion.

Others upvote or downvote because they thing the argument is strong or weak,
or maybe because someone said something nice and positive to another person or
someone said something mean or hostile to another person.

I strongly favor the second approach.

------
nknealk
Surprised not to see this mentioned anywhere. In finance, we don’t look at
maximizing total return but rather risk adjusted return. Buying a lotto ticket
has amazing total return if you hit the jackpot but really bad risk adjusted
return.

The thing you should spend some time doing is deciding what your risk
tolerance is and how much variance in your portfolio you can stomach. Then you
can start talking investment strategies.

~~~
sushshshsh
Ok so say I have enough risk tolerance to put my money in something other than
cash, but not more aggressive than a fund that tracks the S&P, what precise
steps should I do to live off of my cash stack while doing absolutely 0 work
other than sitting on my couch?

~~~
brianwawok
If it’s all in the market, most wisdom says you can take out 4% a year and
never run dry. Is 4% of your stash enough to live on? Congratulations you are
financially independent. You can read through mr money mustache if you want
more depth..

~~~
Apes
The current risk free rate is absurdly low, which would suggest a much lower
sustainable draw down than 4% for the next 10-30 years, probably only around
.5 to 1.5% at most.

~~~
eloff
That's rubbish that you think you can predict a 1% return in the market over
the next couple decades. It would be extremely unprecedented, and you'd need a
very solid argument to have any confidence at all in that prediction.

~~~
arcticbull
Not to mention SPY has a 1.75% dividend yield.

------
aazaa
> ... I have $450K in cash burning a hole in my pocket.

First, the urge to put money somewhere could be a problem. Examine why you
feel this way - closely. It could be you're letting emotions take over and
that's rarely a good thing.

Second, you didn't mention debts. If you have any, you might look at the
interest rate (including government freebies) and compare that to the most
likely return you'll get. If your interest rate is higher than your expected
return, paying off the debt wins.

Third, what kind of reserve fund do you have? If you don't have 3-6 months of
expenses in a ready cash, consider creating an emergency fund.

Fourth, if you have not maximized contributions to tax-advantaged accounts,
consider doing that. If your employer offers a match, really consider that.

Fifth, avoid the temptation to tell others about your windfall.

Sixth, has someone helped you who is now in need? Think hard about it. If so,
consider helping them out.

Seventh, be sure you understand the tax implications of receiving the money.
How much will you owe, if anything. Make sure that money is securely set
aside.

Eighth, if everything else is taken care of, think about the lifestyle you
want to lead. Do you have enough money now to retire? How attractive does that
possibility sound? Taking that path means taking less risk with the money.

~~~
netflixandkill
On debt, while the financial math and low interest rates usually favor
carrying it, there is a certain spiritual liberty about not being beholden to
it.

Much like having enough in savings that you don't have to fear a few months
without a job drastically changes what you'll tolerate from an employer, not
having the weight of debt, however advantageous leverage might be, does grant
the ability to look at opportunities large and small without the "but ..."

------
owenversteeg
Ever since John Bogle created the first index fund about 50 years ago, the
advice of simply put your money in, don't try to time the market, and divide
between an allocation of stocks and bonds based on your risk tolerance has
performed far better than anything else. This includes periods where the
market has been very over-inflated. If you had the worst possible timing and
put your money in around the absolute peak before the 2008 recession, held
throughout the crash, and left it in for a while, you would have more than
doubled it a little over a decade later.

It may be hard to realize, especially at times like this when the market
doesn't seem to reflect reality, but when investing on a long time frame the
best advice is always simply to put your money in and to not try to time the
market. On a long enough time frame, it will all come out in the wash.

The key, of course, is "on a long enough time frame". If you think there's a
reasonable chance you might need the cash in two or five years, then you
should either significantly reduce your exposure to equities like the S&P 500
or eliminate it entirely. The question then, of course, is what do you put
your money into? Well, there are plenty of options. While the S&P 500 returns
around 9% before inflation, you have a number of options that are lower
returns, lower risk. For that, you have the entire spread from a savings
account (1% right now) to short term Treasuries (2%ish right now) to various
kinds of bonds. The simplest way to get, say, 50% of the reward for 50% of the
risk is to have (for example) 50% in SPY and 50% in Treasuries.

Whatever you do, good luck, and I highly recommend the Bogleheads forum for
good advice on any situation.

~~~
actuator
This has been true for the US markets till now but I am always scared to think
of a scenario where they go the way of UK markets have done in the last
decade. Look at one[1] of the FTSE 100's Index fund returns. They stand at
3.58% annualised, i.e your money is now 1.4x of the original amount. This is
considering the fact that we are looking at returns from Aug 2010 levels when
the FTSE index was already 20% down from the 2008 peak.

So the peaks I see now in Nasdaq actually look very scary to me. Anyway, I
think if they decide to go ahead with equity, they should spread it out over a
period.

[1]
[https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.asp...](https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR06I23&tab=1)

~~~
jefftk
_> They stand at 3.58% annualised, i.e your money is now 1.4x of the original
amount._

Do you have a typo?

~~~
mdpye
Annualised so ten years of 3.58% increase, 1.0358^10 = 1.4215

~~~
jefftk
Thanks! I had missed the reference to "decade" on initial reading.

------
ceocoder
Take a look at this comment from 'patio11 and response by
'mechanical_fish[0][1]. My investment strategy is remarkably close to what
they've described (although I read/learned about it elsewhere - a really good
friend). I still buy an odd stock in low single digits as a "token" \- if I
like the company I should get some stocks - think PTON, TSLA, AMD, GOOG, AAPL
etc. However vast majority of everything else is in blend of vanguard index
funds.

[0]
[https://news.ycombinator.com/item?id=10111454](https://news.ycombinator.com/item?id=10111454)

[1]
[https://news.ycombinator.com/item?id=10114707](https://news.ycombinator.com/item?id=10114707)

------
presto8
If you decide to invest it (in an index fund, for example SPY or IWM), I am
not seeing any downside to selling cash secured puts. For example, on SPY, you
could sell a short 48-dte 30-delta put (strike $312 on Sept 18) for $616
premium. If it is assigned (SPY goes below $312 on Sept 18), you will get 100
shares of SPY for $31,200 but you are no worse off than if you had bought
today and also you will have reduced your cost basis to $30,584. If SPY goes
up, the shares will not be assigned; pocket the $616 premium and repeat the
cycle. Repeat this loop until your entire $450k is invested. This also has the
advantage of spreading out your purchases, and thus dollar cost averaging
them. Just a thought... I welcome any criticism of this approach :-)

~~~
PascLeRasc
The only argument against this that I can think of is that the market could
continue to go up and up, and your premium gain might be less than what you'd
gain through regular DCAing or lump summing in.

~~~
presto8
Thanks and yes, that is a good point. However, given that SPY is already at or
near an all-time high, it seems unlikely that it would continue to go up every
month or two by the premium amount (which itself is pretty substantial due to
high volatility currently).

However, one adjustment if you have a bullish outlook is to reduce the delta
from 30 to 20 or 10. Premium would go up and assignment is more likely.

OP, do it and report back :-) Even if you don't have any options experience, I
am sure any broker will be happy to give you level 4 options (or at least
level 2 which is what you need for cash secured puts) if you deposit $450k
capital!

------
soldeace
The answer is: nothing. At least nothing different than what was your strategy
before that large sum of money entered your life. If I were you, I'd split up
this sum in 10 or 20 chunks and mingle each part with the amount you invest
monthly. The reasoning behind the split-up is that it's easy screw up when it
comes to investment, so easing in rather than nose-diving prevents you from
doing something stupid.

A last word of caution: maximized returns come with maximized risks

------
pedrocr
This may be an interesting starting point:

[https://www.reddit.com/r/personalfinance/wiki/windfall](https://www.reddit.com/r/personalfinance/wiki/windfall)

~~~
dmoy
Actually surprisingly solid advice, even though it's reddit.

Helps that the first sublink in there is bogleheads :)

------
rayhendricks
Don’t take financial/tax advice from random internet people.

Go to a fee-only financial advisor something like this
[https://www.feeonlynetwork.com](https://www.feeonlynetwork.com) in your state
and take their advice that is a fiduciary. It will cost you a few hundred
dollars but that is entirely worth it, we don’t know your whole tax and risk
situation.

------
emit_time
> I'm not comfortable investing the entirety into an index fund, given the
> current socio-political climate.

The government is printing an awful lot of money right now.

Keeping your money in cash isn’t a guaranteed return if inflation goes up
significantly. You’re much better having it in assets with intrinsic value.
(Stocks, real estate, etc)

I would suggest investing the money over the course of a couple years into an
index fund, probably S&P 500 or total market.

Even if you invest at the worst possible times (right before crashes) you’ll
come out way far ahead of leaving it in cash.

[https://awealthofcommonsense.com/2014/02/worlds-worst-
market...](https://awealthofcommonsense.com/2014/02/worlds-worst-market-
timer/)

~~~
crack-the-code
> Even if you invest at the worst possible times (right before crashes) you’ll
> come out way far ahead of leaving it in cash.

I don't like this argument, because it seems to imply you would indefinitely
leave it in cash. In this hypothetical situation, where a market crash is
impending, and individual could invest at the bottom and make significantly
higher returns than investing prior to the crash.

This of course goes without saying, "you can't time the market", but it's a
bit dishonest to indicate that you can't beat the market here.

------
boulos
The normal first question is "do you have near-term need for this money" which
it sounds like your answer would be "No, this came to me and now I just need
to invest it for a long time".

It sounds like your asset allocation is currently:

\- $50k "index fund" (S&P 500?) \- $150k land/home \- $200k industrial real
estate \- $450k cash

I would suggest you start at Asset Allocation [1] and as an example read
through the "Three Fund Portfolio" [2]. Before this cash, you were nearly 90%
real estate. At the very least, you can outperform "cash at a bank" by at
least keeping that $450k in a Vanguard or similar Prime Money Market Fund [3].
So as you think about what to do, take the 1.3% or so :).

[1]
[https://www.bogleheads.org/wiki/Asset_allocation](https://www.bogleheads.org/wiki/Asset_allocation)

[2] [https://www.bogleheads.org/wiki/Three-
fund_portfolio](https://www.bogleheads.org/wiki/Three-fund_portfolio)

[3] [https://investor.vanguard.com/mutual-
funds/profile/performan...](https://investor.vanguard.com/mutual-
funds/profile/performance/vmmxx)

------
lowercased
Without knowing more about you - age, health, goals, risk tolerance, other
obligations, etc - it's all just random suggestions from the internet.

My random suggestion here is diversify in to a few different equities areas.
US, international, etc. I mostly have a few 'general market' funds, but a
couple that are focused on tech companies, and they've outpaced the general
market over the last several years.

Keep some in cash - ally and others have around 1% return on cash. not great,
but it's something. keep maybe $80k or so in there.

put some in general 'broad market' index funds - total market or S&P or
something - maybe $150k in that.

find some international funds - put $80k in that.

pick a precious metals fund - put $40k in that. Alternative, take _some_ of
that and put in to crypto if you've got an interest in that.

This would leave you with around $150k. Consider some more real estate -
perhaps just land and let it appreciate, or a small house you can use as a
rental, or more industrial. Or just hold that in cash for a bit longer while
you wait and see what happens. You already have $200k in industrial real
estate. If you're comfortable with that, and you're getting a return that from
area, increase your exposure there.

Watch the investments - readjust portions to your comfort level - perhaps
every 3-6 months - as things change. Keeping cash will give you some cushion
if there's a downturn, either to weather a storm, or give you some ability to
throw a bit more in to a specific market.

There's no rule that says you have to put it all in one index fund right now.
You're in a fortunate position, and can afford to take this slowly, and spend
time learning more about these various instruments before blindly throwing in
hundreds of thousands of dollars.

Part of that learning can (and probably should) be meeting with a fee-only
advisor who can review your situation in more detail and give you a more
comprehensive set of recommendations more suited to those aspects we can't
tell from your post (risk tolerance, life goals, etc).

~~~
projektfu
If you do use a financial advisor, use one that charges hourly. The ones that
charge a percentage win regardless of your outcome. I have been very
unimpressed with their work when I have seen it in action. The flat fee ones
are incentivized to give you less than what they would do in the same number
of hours. Probably you can set up an initial allocation and learn about
rebalancing, and you’ll only occasionally need advice in the future.

Another good book to read is “A Random Walk Down Wall Street”.

~~~
lowercased
"use one that charges hourly" \- that's what I'd meant by "meeting with a fee-
only advisor", but perhaps my term isn't the best phrase to keep in mind. yes,
keep a fixed fee (hourly, whatever) - just don't tie a % of your portfolio as
a fee for someone to 'manage' your money. Or... don't do it without careful
consideration.

~~~
135792468
Where do you find them? I’ve been looking in my area and there are a few I’ve
spoken with that don’t seem to be in tune with 2020 or my personal
philosophies.

------
ericmay
What’s your goal? That’s the first question that needs to be answered here
before trying to identify an investment strategy.

~~~
aboodman
Investment managers always ask this question and I never know what to answer.
I feel like everyone's answer must be the same: maximize return, minimize
risk.

What are possible answers to this question you're looking for?

~~~
kqr
You can't both minimise risk and maximise return. They're polar opposites.
("Risk" is a bad word for the concept. It's more about volatility. The more
volatile the asset, the higher the fluctuations, and the less you can expect
to still have tomorrow, but the more you'll have in 20 years.)

The expected answer is mainly about what risk you are able to tolerate, i.e.
how soon you will need the money back again.

------
fujiters
[https://www.bogleheads.org/wiki/Managing_a_windfall](https://www.bogleheads.org/wiki/Managing_a_windfall)

Use this money to max out all tax advantaged accounts available to you (401k,
IRA, HSA), and invest the rest in a brokerage account. When in doubt, invest
the money in a target date fund at Vanguard or Fidelity that most closely
matches the date you plan to start withdrawing from the account. A total world
fund/ETF, like VT, is also a fine option.

------
jacquesm
I'd advise you to stay liquid for a sizeable fraction of that for the next
12-18 months. The world is changing rapidly and access to a sizeable chunk of
cash could make all the difference once the smoke clears and it is clear what
to do. Also: you could go bargain hunting.

------
kp98
As someone who has been a partner in a fund in the past, I've done a solid
amount of research, and for someone who is risk averse, one of the best
strategies of the last 50 years has been 33% of your investment in real
estate, 33% in hedge funds, and 33% in a portfolio balanced between stocks and
bonds. I don't have the study on hand, and I also don't have the time to
search for it, but doing research into the hedge fund field will probably
yield this study. good luck

------
fossuser
This is a good resource:
[https://www.reddit.com/r/financialindependence/](https://www.reddit.com/r/financialindependence/)

Long term VTSAX or FZROX are probably good places to hold most of that. You
could keep $30k in cash for emergency fund.

The other comments suggesting the bogleheads forums are also right. Most of
the other comments are a total disaster I’d be cautious about following any of
the advice here (it’s also surprising to me how bad it is).

I also personally do some individual stock picks of companies I know in the
field I’m in, but that’s still quite risky and not advised unless you like
this kind of thing (Amazon, Apple, PTON, Nvidia, previously tsla). I hold long
term for capital gains.

Long term index funds are the best bet, even if the market goes down you can
wait it out if you’re young. If the current conditions scare you, you can
“dollar cost average” entry which just means buying $X amount each month/week
until you’re fully invested. Long term this kind of thing doesn’t matter
though.

Are you looking to use the cash soon? If so you may want to not invest it.
Being forced to withdraw is where the problems come from.

Don’t listen to anyone on here about bitcoin. That’s gambling, if you want to
do that know it’s gambling and expect to lose everything.

------
achenatx
Personally I would hold the cash until there is blood in the streets. That is
the time that fortunes are made. We arent quite there yet, possibly next year.

In 2000 investors were screaming at buffet because he was sitting on billions
in cash. They were saying he had lost his touch, he should pay a dividend etc.

Then in 2001 the crash happened and he was able to get some great deals.

The time to buy is when everyone else is saying dont buy, things have
fundamentally changed.

~~~
jb775
> _We arent quite there yet, possibly next year_

The fact that a lot of people think this gives me confidence that it isn't
going to happen anytime soon. I'll get nervous when the rhetoric is "The
market is looking great for years to come!", like back in 2005/2006.

------
ThrustVectoring
There's an amount of money you could plausibly need to avoid life
consequences. You get laid off or your business fails, and you have to dip
into savings to keep a roof over your head and food on the table.

Figure out how much that is, and leave it in cash or other extremely safe
assets. This is a highly personalized number and it's hard to give good advice
for it.

For the rest of your money, you now _know_ that you'll basically never need to
sell it. The only thing that matters here is the total return over thirty-plus
years. This is broadly-diversified stock index funds - the standard boglehead
advice works great here. There's always a risk that today's stock price is the
best you'll _ever_ see, so the historically superior plan for how to get money
in the market is to just dump it all in and ignore the current price.

So yeah. Enough cash to make you "safe", rest in the stock market and ignore
the current price and any price movements over the next three decades.

------
praveen9920
Never take financial advice from internet

~~~
slothtrop
As opposed to, say, bankers?

------
x87678r
Wow no one asked if you have a partner or children or plan to. It isn't clear
how old you are, what you want to do with your life, if you have a secure job,
if you want to travel, if education is worth it, if you parents/family needs
help or if you want to own your own business. Without these things any advice
is probably wrong.

------
hlfy_hn
"I have about $50K in an index fund, own land worth $150K (paid off) and
another $200K in industrial real estate investments."

1\. I don't like Index funds. They were a great investment in the past. They
may be a disaster in the future.

2\. "buy land they stopped making it" Mark Twain

3\. "industrial real estate" could be top, could be a disaster, depending on
what "industrial" means. Technology heavy REIT (IT, server, g5 infrastructure)
could be okay.

You could go contrarian and keep it cash. You could diversify in foreign
currencies. In the end, HN is not the right place to ask. I just recently
invested in some Asian utilities companies. They pay 5-10% divendends. Have a
telecom investment that pays 45% dividends. No kidding.

One word of wisdom: Do not do VC investments. I sunk a ton of money there. In
for a penny, in for a dime and it will start sucking a tremendous amount of
time out of you.

~~~
perardi
“I don't like Index funds. They were a great investment in the past. They may
be a disaster in the future.”

Care to explain?

Are you worried about over-centralizing assets into index funds will screw
with the market's ability to find the right prices for stocks?

Because I worry about that myself, but, then, what do you do? How do I
possibly outsmart the market given the information problem?

~~~
chrismarlow9
I'm not sure of hify_hn's reasons why, but I've exited index funds recently
due to:

\- the overweight holdings in tech in many of them.

\- those same tech companies are responsible for most of the growth in the
past decade.

\- retail investors are chasing the tail of growth which is pumping the price
out of realistic prices. many more have entered the arena with robinhood, etc.

\- there's too much cash being printed, feels like hyper inflation.

\- the current bubbles and shift in funds (pharma desperate plays, gold safe
havens) make me think everyone has a finger on the "exit" button.

\- most every major indicator I see says a fall is near.

I'm no pro and this is only my opinion. Been doing this about 3 years with a
mix of daytrade style plays (earnings, swings, cannabis bubbles, etc) that
seed long term etf dca purchases.

I'm sitting on cash for now until near US election time. I think the robinhood
retail passive crowd that's only recently started will be left holding the bag
for the pros near election, much like the crypto newbies in that peak a while
back who tried to get in at the top. Too many similarities of people that seem
to have no basic understanding of how things work under the hood of things and
just chasing a "really hot run in blackjack".

though I'm happy to admit I don't fully understand every nuance of ETF's I
see/hear conversations with people clearly not understanding what they're
getting into and it's just too similar to any bubble I've ever seen.

I've also considered it may just continue to go up and all this is unfounded
and wont matter and I've accepted the possible loses of potentially new profit
for the rest of this year. It's a cost I'm very happy to pay for peace of
mind, and get back to my strategy when the world makes sense again.

In a nutshell it seems like the ETF has just become a raffle ticket that's
being sold through making it easy to simply stick money into it without really
looking at what you're buying and if it makes sense. Like the ETF is no longer
an investment vehicle, but a product with a bunch of hype.

~~~
devcpp
Overall, your post is more a critic on investment in this period rather than
against index funds. Except for the presence of tech, which I'm not sure is
this bad for people willing to take measured risk.

>there's too much cash being printed

Agreed, but then why hold on to cash until the election rather than buy gold
or similar?

~~~
chrismarlow9
Sure, I totally plan to return to the index when it seems to make sense so
you're right, it's only a bad investment (imo) right now.

I have other investments in web entities (think reddit style aggregation
sites) in niches that tend to do well in downturns. They're pretty much a very
small fixed cost for me every month (spot instances on AWS ftw) and can be cut
off at any time. I feel safe holding cash (and its deflation) because the
profit from those is no longer seeding indexes but being stacked on my cash
pile. Ideally keeping my overall cash from deflating.

------
SaintGhurka
Go out and get a copy of "The Only Investment Guide You'll Ever Need" by
Andrew Tobias. It's entertaining enough to keep you interested, fairly short
and it's stood the test of time - first published in 1978 and updated a few
times. You can read it easily in a weekend.

------
simonebrunozzi
This is my advice: make sure to spend enough time to educate yourself about
financial investments. My rule of thumb is to spend one hour per $1,000 you
have in assets.

So, with $450k in cash, dedicate 450 hours of the next 1-2 years to build a
solid education for yourself. Don't simply follow the specific advice that you
feel makes more sense.

If you think this is a lot of time... 104 weeks in 2 years = you need to spend
~4 hours per week to educate yourself. Read 2 hours for 2 evenings per week.
That's it.

Too much? Ok, cut it in half. 225 hours in two years. Still a great effort
that will pay you back for the rest of your life.

This is above any specific tactical move or decision you can make.

If you are not willing to do this, then accept the fact that whatever decision
you will make, you will have a higher chance to regretting it.

~~~
icedchai
Some education is good, but that much could result in paralysis by analysis.
He'd be better off taking a relatively small chunk (say $25K) and learning by
doing. Open a brokerage account and experiment with different investments.

Some people do not have the right "temperament" for investing. They're afraid
to buy. Afraid to hold, so they sell too soon. They can't handle the
volatility, so they get out at the first sign of trouble. It takes practice.
Paper trading can help, but it doesn't get you the same feel as working with
"real" money and markets.

------
mixmastamyk
Right now one should have a significant position in gold/metals for a couple
of years to hedge governments severely inflating their currencies to fight the
crisis/reduce their obligations.

Quality stocks and real estate, typically hold their value as well during
volatile times. Do not panic during short term crashes. These should be bought
on ten-year+ time frames.

As things improve over the next few years you can start selling the gold and
buying other hard assets again. If approaching retirement, it will be time to
start moving into more conservative income options like dividend-stocks,
bonds, etc.

The one thing you don't want to do now is leave a bunch of cash sitting
around. It will get hammered.

------
stakkur
This is a _big_ question that doesn't have a single answer, and might be the
wrong question to ask. I recommend Bogleheads or buy an hour with a fee-based
financial advisor.

------
xutopia
How about your return on happiness. Why not consider where you would want to
spend your retirement and invest in making that place a reality. Forget ROI...
think happiness.

~~~
lightgreen
Maybe they don't want to think about retirement now. They just want to invest
the money and forget about the issue, and do now whatever they make them
happy, which is not planning for retirement.

------
barney54
Don’t feel bad about doing nothing. At some point the world will be more
financially rational. You shouldn’t have fear of missing out when things are
so topsy turvy.

~~~
spottybanana
With investing you can always wait an year or two with the cash and think
about it. However if you end up doing nothing with the money for 10 years, you
will lose some serious purchasing power.

I would just put first everything to an index fund, then from there on try to
find more interesting investing opportunities.

~~~
chii
“Far more money has been lost by investors preparing for corrections, or
trying to anticipate corrections, than has been lost in corrections
themselves.”

— Peter Lynch

~~~
justinmeiners
Any evidence to back up the quote?

~~~
refurb
Scroll down to the table.[1]

[1][https://www.fool.com/investing/2019/04/11/what-happens-
when-...](https://www.fool.com/investing/2019/04/11/what-happens-when-you-
miss-the-best-days-in-the-st.aspx)

Basically, between 1998 and 2018, if you were out of the market during the
best 10 days, you cut your return in half. And the more days out, the worse it
gets.

Of course, this is artificial in the sense that you'd be pulling out one day,
then back in 2 days later and doing it again and again, but the point stands,
you can miss a week in the market and it can have _a huge impact on returns_.

------
kstenerud
It's a bit late in the cycle, but you can still make a few bucks in gold. As
soon as your friends & family start talking about investing in gold, sell.

------
FBISurveillance
Go through wiki and threads on
[https://www.reddit.com/r/personalfinance](https://www.reddit.com/r/personalfinance).

You may also find interesting to read through
[https://www.reddit.com/r/fatfire](https://www.reddit.com/r/fatfire) if you'd
like this to be your starting point towards retiring.

------
keenmaster
_Step 1_ : Choose a diversified equity index based on your time horizon and
risk tolerance. You can also choose a mix of indices.

\- underlying principles: Diversification, reduction of exposure to
idiosyncratic risk (as opposed to systematic risk), Modern Portfolio Theory

 _Step 2_ : Invest $8,653.85 a week for the next year in your indices of
choice.

\- underlying strategy: dollar cost averaging

 _Step 3_ : If the market tanks in September because school re-openings ravage
the country, invest the rest of your money at an accelerated rate.

 _Step 4_ : Continue to reinvest income steadily for the rest of your life.
Never liquidate a diversified index because of a recession (this ruins the
whole investing strategy).

 _Step 5_ : Gradually readjust your portfolio into lower risk indices
before/during retirement based on your risk tolerance. Warning: Even if you
have low risk tolerance, you must have a strategy to live off your earnings
for the rest of your projected life span. Generally speaking, the lower your
risk tolerance, the longer you have to wait before retiring (because bonds are
guaranteed to provide low returns) or the larger your portfolio needs to be
upon retirement.

------
PopeDotNinja
I’m a big fan of boring. I like parking stuff in either Wealthfront or
Vangaurd account, picking a diversified strategy, and leaving it alone.

------
adaisadais
The markets are extremely overinflated as of now. We will see an adjustment by
the middle of 2021 at the latest.

I would wait until the news starts to sound so horrible you can’t help to do
anything but invest.

As many have mentioned, placing it in an index fund is a good idea. I would go
for that! But just wait until the market has the next downturn, invest, and
don’t look back.

~~~
nodesocket
> We will see an adjustment by the middle of 2021 at the latest.

I love people who claim they know what the market's going to do, and
continuously call for a crash. These are the same people who have been calling
for a crash for the last three years. Here's the deal, sure we eventually have
corrections, but if you have cash on the sidelines then you just buy more and
lower your dollar cost average. I did this pretty aggressively in March /
April in peak market overreaction.

Just look at Apple and Amazon stock. Everybody was saying they were way
overvalued and not to buy. What happens? Both of them absolutely crush
earnings, and Apple the largest company in the world pops 10% in a single day
on Friday.

~~~
kp98
You realize that this strategy isn't going to work indefinitely? People like
you will be blown out in the future. Sorry if that sounds awful, but it always
astounds me how people think investment managers are tantamount to tea leaf
readers, and that they've figured it out by simple dollar cost averaging. I
just don't understand the mindset

~~~
adaisadais
Clearly it won’t work in the long term. No one knows what the market might do
tomorrow. We might think we know but no one can ever truly know (legally
speaking).

What I’m advocating for is mainly based on the timing: the market corrects, on
average, every 8-12 years. Right now, many Robinhood investors (like you
probably are) are extremely bullish and are inflating the market.

When the bubble pops I will see you at the bottom. And I damn well hope I am
wrong.

Buckle up.

~~~
nodesocket
> People like you will be blown out in the future. > Right now, many Robinhood
> investors (like you probably are)

First off, I am not a robinhood investor. I've been in the market since 2002,
with a significant amount of capital invested now, weathered 2008 and this
years Covid action and seen many bear markets. I find the fractional Robinhood
"traders" comical and a train wreck waiting to happen. Buying Hertz, Kodak,
Nikola.... That ain't me, so don't make assumptions. I have cash on hand, I
have large percentage in J.P. Morgan ($JPST) a bond traded ETF which pays a
monthly dividend and has a 8% return the last 3 years.

------
pdm55
The first rule of money is, "Don't lose it".

As to what to do with it? If interested in shares, a rule that I like is to
invest in companies that make products that you like. Also, hopefully, you can
make some assessment about the management of the company. If they are bringing
a new product to the market, can you use your expertise to evaluate that
product?

Michael Burry argues that Index Funds distort the market. Think lemmings.
Better to use one's own judgement.

Is the sun always going to be shining? No, rainy days always come. In life,
you will have both lucky and bad breaks. So make the most of your lucky ones.

And don't think you are a genius, when you make a lucky investment. Back to
rule #1.

------
jijji
I have read all the comments here, and although the 8-12% per year returns you
_might_ get from the stock market are tempting, my investment strategy has
always paid off by at least doubling but usually tripling my money every 3
months... buy low and sell high. examples: buy a house in gated community or
on the water on a tax auction or foreclosure auction offered by the court
house and never bid higher than a third of the appraisal value on any deal,
then sell it for what its worth on zillow. number two, buy jet airplanes or
helicopters on auction sites and same thing never bid higher than a third. The
reality of these auctions is once you bid higher than 50-100k, the small fish
drop off and you either win or its a much smaller bidder pool. you're more
than likely to win deals that are 5x to 10x cheaper than what they go for on
the retail market.

------
11235813213455
Get some land, plant trees and all sort of vegetables, and live there
basically in this small heaven.

That's my plan at least

------
jb775
#1: go buy those night vision goggles you've always wanted and take a
vacation. Life is short and you should have some fun. Once that's done, do the
below:

Expect inflation over the next 10 years, so keep the land & real estate
investments (good hedge against inflation). Also, there are strategic ways to
use these for tax purposes...talk to a good tax lawyer.

Treat 10% as "gambling" money with investments. Try to pick some stock market
sleepers.

Spread 60% across a few American Funds and/or Vanguard selections, depending
on your risk tolerance. Also, max out a Roth IRA every year starting now.

Keep 7-10% in a savings account that's accessible for emergencies.

Put 7-10% into bond funds.

Take whatever's left and put into a down payment on more real estate, either
for a personal property or investment property.

------
sanguy
Right now is a challenging time to invest.

In general I would lean towards well managed active funds versus pure index
funds. The markets are in a time that a good active manager can get you some
added return.

With that said I'd probably lean towards something like the all-weather
portfolio. See:

[https://www.iwillteachyoutoberich.com/blog/all-weather-
portf...](https://www.iwillteachyoutoberich.com/blog/all-weather-portfolio/)

Note: this portfolio does cost you some potential upside in good market
conditions but with less down risk.

Disclaimer: I am a big fan of Ray Dalio who came up with the all weather
portfolio. I have 7 figures in such a portfolio. For the equity and bond
portion I use Vanguard active funds.

~~~
reducesuffering
Ray Dalio has also said it's a foolish time to be holding bonds, of which the
All Weather he came up with is 55%. A bit contradictory

------
orasis
If you want to get rich and are reasonably intelligent/motivated, the best
investment you can make is in YOU. With that much money you have the freedom
to not earn income whiling attempting to start a business or join a higher
risk venture.

------
TruffleLabs
Great to hear you are able to have these kinds of decisions to make!

Maximize return needs input * when do you plan to use the money? * what does
maximize mean to you (more money is not always what people mean: Examples
maximize social good, maximize for long term use in a trust, etc)? * what are
your goals?

There are many other questions that could be asked.

Recommend you hire a fee only financial planner.

Also take a personal finance class to help you understand the different types
of investments you have (cash, index funds, real estate, land, etc) and to
learn how each type of investment is measured over time.

Hope you find your path to your goals :)

------
marvin
Globally diversified low-cost index funds. Meaning not just US, S&P500 etc,
but also Europe, developing markets, Nordics, «small cap» (ish) companies.

That’s the portfolio I’m using, anyway. No currency hedging and slightly
underweight (but not majorly so) wrt. the US.

Some US-based index fund strategies include only the US, but that leaves you
less diversified. Though with better returns, historically.

Not sure why you’re leaving index funds so underweight in your strategy;
curious what options you’re considering. There aren’t a lot unless your
strategy is more along the lines of wealth preservation.

------
jasoneckert
My advice is unconventional. Why maximize your return? Money is a renewable
resource, but time is not.

If I were you, I'd spend the money to enjoy my time with others I care about
and donate the rest to others in need.

~~~
cjbprime
Because managing the money wisely allows you to exchange less of it for more
enjoyed time and more donation power, of course.

Your goal of using money to make you and other people feel good is not
unconventional; the advice is unconventional because it's not an effective way
to reach that goal.

------
conchy
Any answer here that includes the word bitcoin will be downvoted to oblivion,
but it was the right answer 10 years ago and it is still the right answer
today. Ignore and downvote at your peril!

~~~
Sschellbach
If you want to secure your current wealth by saving, the fiat standard is not
for you. Bitcoin is saving technology

~~~
PascLeRasc
So I have a Coinbase account and from all their free crypto promotions I have
around $150 of Eth. I'd like to start adding some more to this to hold very
long-term - is there a certain exchange or some other way you'd recommend,
like Kraken or a hardware wallet?

~~~
Sschellbach
Sure. If you have a serious amount of savings, the best approach to balance
security and practicality is to protect your coins using multisignature, or
multisig.
[https://en.bitcoin.it/wiki/Multisignature](https://en.bitcoin.it/wiki/Multisignature)

------
chiefalchemist
How old are you? What are your career and life goals? How much risk are you
comfortable with?

Finally, keep im mind: "past performance is no indication of future returns."
This is more and more true.

------
Tiktaalik
Buy land in Portugal or Malta and leverage it to get a EU Passport.

~~~
RomanPushkin
Why do you need EU passport? Seems like unreasonable investment

~~~
Trias11
+1

~~~
throwaheyy
A US passport won’t let you in right now?

~~~
RomanPushkin
Well, getting EU passport sounds like a long-term plan and investment. Current
travel ban doesn't look like long-term. also, what's the reason of getting
into EU? Is there more opportunity for investment? The vast majority EU
countries the purchase power is lower than it is in US.

------
ajcodez
I have always regretted investing spare cash while feeling a sense of self
imposed time pressure. I would sit on it until there is an opportunity you are
excited about.

------
justinzollars
I recommend listening to
[https://www.schiffradio.com](https://www.schiffradio.com) His guidance has
really worked for me.

~~~
Trias11
Thanks for that - I didn’t know it exists!

------
ckdarby
Hire a good CPA they'll be able to execute strategies to reduce your tax
burden and shelter the amount you pay on what it is earning you with what you
do decide.

------
anm89
This may be frowned upon but :

I am in a nearly identical situation, within a few percent of your dollar
amount.

Ive been looking for a while for a partner for a lifestyle business, something
along the lines of a maker space but open to a wide variety of ideas, most of
them somehow variations on buying a large commercial space cash and using the
free rent to build a business that creates community.

Me email is in my profile, feel free to get in touch, if you'd be interested
in brainstorming.

~~~
tlow
I'm currently starting a new maker space in Texas, please feel free to reach
out, happy to share what we know and have learned.

~~~
anm89
Thanks! Sent you an email.

------
Trias11
Buy oceanfront real estate in Panama and rent it out.

Residency comes with this.

You may use both if things in USA gets from bad to worse - from political,
economical, financial and social aspects.

~~~
ed25519FUUU
If the USA destabilizes, the last place I want to be is Central America.

~~~
Trias11
Share your ideas then.

Panamá gets stable revenue from Panama Canal plus some natural resources and
operates in US dollars in eastern timezone.

As a plan B it’s not exactly that bad.

~~~
glofish
Your advice only works if one speaks fluent Spanish and is well versed in and
comfortable with the way societies work in Latin America.

For anyone else it is a recipe for disaster (as in being taken advantage of
many times over)

~~~
Trias11
I don’t speak Spanish and I own condo in Panama and I renting it out and I
live in USA.

So I’m walking my talk.

------
pinky1417
If you're against a broad market index fund right now (which I think is fair,
not so much because of the socio-political climate, but because of the high
implied valuations of the companies within it), I'd recommend putting about
all of it in Berkshire Hathaway as a set-it-and-forget-it type thing. It's
effectively a cheaper index fund with better-than-average companies.

Why in the world would I recommend a single stock? For one, Berkshire is a
"financial fortress" with virtually no debt, $100B+ in cash, and about a
collection of dozens of wholly owned subsidiaries: GEICO, See's Candy, BH
Energy, BNSF Railway, etc. Berkshire's so conservative that, although Buffett
and Munger have acknowledged leverage could boost their returns, they refuse
to take on obligations that would even create a 1 out of 100 year risk of
failure. More importantly, I believe it's cheap at current prices (a little
under $200 for each class B share). When you buy Berkshire, which has a market
cap of ~$500B, you're getting $175B worth of stock $125B in cash, and the all
the subsidiaries for $200B. And I'd bet the intrinsic value of those
subsidiaries exceeds $200B by a substantial factor.

Risks: (1) The biggest problem is that Berkshire is already quite big. That
makes it difficult to compound capital at large rates. But compared to the S&P
500 or the even-bigger tech companies, I'd rather be buying Berkshire, at
least at today's prices. (2) Buffett and Munger's advanced age. This to me is
not as huge of a problem as people make it out to be. Todd Combs (GEICO), Ted
Weschler (investment manager), Greg Abel (non-insurance ops), and Ajit Jain
(insurance ops) are extraordinarily talented... to say nothing about the
leadership in the subsidiaries. And Berkshire's built such that it would be a
great business even without these top-notch managers. (3) Time. This isn't a
problem if you're happy to hold Berkshire for 20+ years. But markets are
emotional beasts and stock prices can decline rapidly and unpredictably.
Berkshire isn't a bond nor does it pay a dividend. So don't buy Berkshire if
there's a risk that, 5 years from now, you'll need to sell or if you're the
kind of person who can't deal emotionally with large short-term declines in
stock prices.

Disclaimer: NOT investment advice. Just my personal opinion. I've been buying
up more and more Berkshire in the past few weeks.

------
awinder
Just as some general advice, imo that’s enough money to visit with a fee-only
financial advisor for some planning. I don’t think my numbers are wildly off
for location but you could probably spend like a grand (.22%) to get a solid
plan in place that you can ride for a while. Or like others have said,
roboadvisor. I don’t think target date fund makes sense outside of a
retirement vehicle but maybe that’s an option.

------
anonymousiam
You don't say much about how much time you want to spend managing your
investments. That is an important consideration. On one end of the spectrum,
you may have several hours per day to track your portfolio along with market
indicators and news -- On the other end, you may not be qualified, or have the
time to spend.

No investment advice offered here will be worth anything until you decide
where you are on that spectrum.

------
bb88
So $450K is both a lot of money and not a lot of money. Yes you could maybe
buy a house with it, but with the current economic climate of foreclosures
just over the horizon, I would probably wait for the market to bottom out to
do it.

If it were me, I would start looking for vacation properties which are selling
as a steal. Then when the real estate market recovers, sell it. And enjoy the
wealth that comes with it.

~~~
seattle_spring
Not sure if you've been following the vacation rental market, but it's
exploding right now. At least that's the case in the northwest.

------
jkhdigital
Since you’re looking to maximize return, not risk-adjusted return, you should
buy Bitcoin and roll deep OTM weekly put options on large cap ETFs.

------
joubert
> Given this spread, what should I do with the cash?

There isn’t a single answer.

Depends on factors such as:

\- your goals (e.g. would this be for future retirement, for paying your kids’
education, etc.)

\- your age

\- your risk tolerance

\- etc.

What about the socio-political climate makes your risk averse to investing
into an index fund? And are you referring to all index fund, which can vary on
many dimensions such as region, cap size, type (e.g. equity, bond), etc.

------
akrymski
Real estate. Great hedge against long term inflation. And a mortgage allows
you to borrow 5X at low interest rates, with rental yields generating a
profit. Example: you can borrow 2M at 2% (interest only) and rent out at 3%.
Real estate rising 3% on average means a capital gain of 70K a year, which is
a 16% yield on your 450K investment.

~~~
shados
the problem with real estate is that it's work. Even if you hire a management
company (which does hit your profit), shit like bad tenants can really screw
you up, if only in term of time spent on paperwork and legal garbage. In the
best case scenario it's low (but not zero) work, but in the worse case it's a
LOT of work.

~~~
phanindra_veera
Get LEGAL Indian immigrants as tenants. Especially the ones with tech related
jobs. We always pay our rent. We dont want bad credit. We keep things normal.

~~~
shados
The rent's the easy part. It's what happens to the apartment, neighbor
complains, etc that matters (and race doesn't really matter for this,
everyone's capable to be assholes in their own way).

Plus picking tenants based on race is quite illegal.

~~~
phanindra_veera
Agreed. Apologies if offended.

------
maerF0x0
Knowing very little of your goals, risk tolerance etc I'd say start with
[https://rparetf.com/rpar](https://rparetf.com/rpar) . You can always exit it
and do another strategy if you find more tailored advice

Else consider one of the Vanguard TargetDate funds if you have a target date
to retire.

------
switch11
I'll just leave this bit of advice

Very few fortunes are lost by spending or excesses, they are mostly lost by
bad investments and bad financial decisions

* It might be better to take your time and think long and hard before making any investment decisions

We are at a point of unbelievably crazy valuations and in the midst of a
global pandemic

a lot of stuff is going to go tits up

------
dnadler
Figured this would be as good a place as any to plug this retirement planner I
wrote a while back:
[https://lunchmodel.com/retirement](https://lunchmodel.com/retirement)

It's probably a little complicated for a layman, but I think it works pretty
well, and is quite flexible.

------
oh_sigh
Since people are handing out general investment advice, is it possible to
invest in a country? e.g., if I think Central African Republic is going to be
the next South Korea over the next 20 years, how would you invest to reflect
that without just investing in a specific business operating in CAR?

~~~
hedora
I imagine there are ETFs for this purpose.

------
crorella
I am in a similar situation. I ended up investing overseas on a good real
state deal with high yields. The tax side of things was simplified by the type
of investment (debt investment). I think the pandemic created or accelerated a
bunch of business opportunities, some of them out of the US.

------
mandeepj
Question, out of curiosity - How do founders manage those troves of cash after
selling their startups for billions (sometimes even in cash)? I'm aware the
amount is a mix of cash and stocks paid over 3,4 years. But, in some
transactions the cash portion is not less than ~$300M.

------
rvr_
In your position I would save 90% on the safest type of account you can get
(big bank, insured). The remaining 10% I would spend trying to bootstrap some
business. There's a big chance of failing, but if you fail you will still have
a nice amount to reboot.

------
polote
If you have spare time in your life, go to your banker, ask for 450k loan, buy
2-3 houses, keep 200k cash, rent the houses, if stock markets loose 50% of its
value, invest 100k on sp500 index.

There is almost nothing that can beat renting houses if you are a non finance
expert

------
blizkreeg
My advice: take advice from people who have invested that kind of money
before, and no one else.

------
onelastjob
Wait for the next crash and then buy up stocks and rental properties
(apartment buildings) at a discount. See 2008 for reference. While you are
waiting for the crash, you could put some of your cash into gold, which will
do well when the US economy crashes.

~~~
hedora
I did that from 2008 to 2014 (but I didn’t buy gold).

It worked out terribly. I should have parked it in a diversified portfolio.
Instead, housing and equity prices inflated, and I lost a ton of potential
gains.

Buying gold during the crisis would have made it even worse:

[https://www.macrotrends.net/1333/historical-gold-
prices-100-...](https://www.macrotrends.net/1333/historical-gold-
prices-100-year-chart)

If you must buy gold, it’s best to buy some when the stock market is booming.
If you bought gold in 2011 or 1980, your current return would be 0%. It would
have been very negative last year.

~~~
onelastjob
I don't follow. My advice is that OP sit on their cash until the next crash
happens. Then they should buy up stock and rental property. Before the crash,
if they don't want to keep everything in cash, they could buy some gold which
tends to increase in value right after a crash. The crash that started in 2008
bottomed out in March 2009 when the DJI fell to 7000. That would have been the
time to buy stocks. By Nov. 2013 the DJI was up to about 14,000. As for gold,
it was at $864/oz around Sept. 2008 which was a few months before the crash.
By August 2011, gold was at $1819/oz.

------
fortran77
I'll give you a proper Hacker News answer:

Invest it in software companies who develop in Haskell and Rust.

~~~
reducesuffering
Haskell, eh. But companies using Rust are generally quite innovative and posed
to do well in the next decade: Facebook, Dropbox, 10x Genomics, Cloudflare,
etc.

------
baby
In my circle a lot of people just use robo-advisors (wellfront, betterment,
etc.)

The whole point is that it doesn't cost much and it saves you time on learning
about finance.

If you are interested in learning finance, then of course this might not be
the best approach.

------
m3kw9
I can recommended keep investing what you understand best. Trying to invest in
something you don’t understand is one way to minimize returns.

Another advise is to go long in the investment with some risk spreading
according to your tolerance.

------
OJFord
'land worth' is absolutely not 'cash', it's way less liquid, and 'cash' means
~'immediately' available liquid money.

I wouldn't call the REIT cash either, but maybe that's more debatable.

------
xupybd
Find a good financial advisor that can tech you all you need to know to figure
out what to do here.

Looking at where you have the money there is no rush to figure anything out.
It's invested pretty well. Well enough to give you time.

------
muzani
I'm going to bet that there are tips at the bottom of this thread that
actually work and were written by someone who has made a lot of money off it,
but it's hard to sift through them and find out what works.

------
rethab
Are you looking for financial return only? If not
[https://www.givewell.org/](https://www.givewell.org/) searches for charities
that improve lives most per dollar.

------
JabavuAdams
Don't worry about maximizing your return. Worry about frittering it away. Do
you already have the habits to be frugal-ish and control costs, or do you
start spending more when you have more in your pocket?

------
alpineidyll3
A nearly even allocation between: SPY, GLD, TLT, HYG, VXX (or equivalent
sector standins) Has a very good very stable yield for many, many decades.

To have anything better, one must learn a lot about investing and keep after
it.

~~~
dougmwne
Warning: VXX is virtually guaranteed to drop in price in the long run. It uses
periodic reverse spits to maintain its price. Never buy and hold it, ever.

~~~
kgwgk
[https://stocknews.com/what-happens-next-after-vxx-
expiration...](https://stocknews.com/what-happens-next-after-vxx-
expiration-2019-01/)

“Indeed, in the initial prospectus from 2009 stated, “due to the construction
for this product one needs to be aware that its value will approach zero over
time.” The prospectus also called to retire the fund after 10 years which will
be at the end of this month on January 30.“

“All told since its inception 10 years ago, on a split-adjusted basis, the VXX
has declined from $120,700 to the current $47 level.”

------
gnomesteel
Call Vanguard, setup a Personal Advisor account, and let them do their thing.

------
aey
Money printer go brrrr, means invest in housing. It’s the only investment that
gives you 500k of tax free profit.

Also, you know your city, the local market and what the possibilities are much
deeper than any corporation.

------
hughes7370
This is a really complicated question and nobody in this forum is qualified,
nor is it even legally permissible, to give you such feedback. You should seek
out a financial advisor.

------
DabbyDabberson
I recently bought muni bond funds and SLV to hedge on inflation. PMO pays a
nearly 5% dividend which is tax free. I'll take that over a 1% savings account
(with taxes) any day.

~~~
qorrect
AMZN has made a 75% return this year, and you're buying municipal bonds ?

Someone is _really_ risk adverse ...

~~~
DabbyDabberson
key word, recently. As in, within a week. I realized a nearly 80% gain on my
AMZN shares, and 50% on MDB shares, and a bunch of other wins as I managed to
call the bottom of the V pretty well.

However, with the nasdaq fully recovered, yes I am realizing some gains and
taking a more defensive position.

------
ergwwrt
Buy Bitcoin. You can do so with paypal here
[https://emeraldledger.com/buybitcoin](https://emeraldledger.com/buybitcoin)

------
ardme
Personally I would put half in foreign stocks (like EFA etf) and half in gold.
The dollar is dropping against foreign currencies and they are all dropping
against gold. Every central bank is printing money like there is no tomorrow:
with good reason we are in the midst of a deflationary shock.

But couple the money printing with record low interest rates (and negative
interest rates), this creates a special situation where gold (and other hard
currency like bitcoin) outperforms. With a negative real rate on bonds, you
will lose inflation adjusted purchasing power in bonds even if you come out
positive. There are not a lot of great options right now.

------
dmarlow
You can develop something on that land. Or, go for some more real estate
(maybe get some multifamily), but leave ample reserves given the climate.

------
scott31
Invest in yourself, that money could buy 45000 books (assuming 10$ each) and
after reading them all you could even be a billionaire

------
annoyingnoob
Life is short, make sure to leave room to enjoy it.

------
t0mmyb0y
Invest in structured investments, the same ones used to buoy annuities. All
the upside, less risk overall than most investments.

------
bgorman
Look in to opportunities for syndicated real estate investing.

You could also pursue investing in multifamily homes given you live in the
Midwest.

------
wcerfgba
Since you have $750K in assets, you could consider investing in a social
enterprise or giving to charity. I support GiveDirectly because their model --
direct cash transfers -- is very efficient.

Otherwise, as other people have said, it depends on your time frame and the
amount of risk you are willing to take on. If you can wait 5+ years, a fund
blending index tracking with some bonds (for stability) is an excellent
option.

~~~
e15ctr0n
> _consider investing in a social enterprise or giving to charity_

You could even set up your own private foundation for serving a good cause
dear to your heart.

[https://www.investopedia.com/terms/p/privatefoundation.asp](https://www.investopedia.com/terms/p/privatefoundation.asp)

------
companyhen
5-10% of your total into BTC and ETH, 1-3% into smaller but high potential
projects like LINK, MKR, KNC, etc.

------
ahmedaly
If you are interested in investing in a chatbot app targeting middle east and
LATAM, please let me know.

------
peignoir
I would sit on it until the situation gets more clear, good deals should be
coming and cash is king

------
codecamper
Wait 6 months for the market to crash. Then buy things like Coke, McDonalds,
etc.

------
toohotatopic
What can you do, what do you know? If there were a clever answer that fits
everybody, all the banks would already have poured all available money into
it.

You maximize your returns by beating the market. You beat the market by being
more clever than the market. Where do you have the resources to beat the
market?

------
daniel_reetz
I know a great financial advisor in the Dakotas if you'd like a referral.

------
elif
if you are trying to maximize returns, i would say crypto. you could have
doubled your money in ethereum in the last few months.

if you are maximizing stability, probably guaranteed return products around
2-3%

------
rlonn
Red, go for red! (Unless it's a tuesday - then definitely black!)

------
Sschellbach
Dollar cost average into Bitcoin with swan swanbitcoin.com/swym

------
mcndjxlefnd
The most secure thing you can do with that money is buy gold/silver and pay to
have it stored in a secure vault. Honestly, that is more secure than keeping
dollars in a bank account or US treasuries. Also, gold/silver are
appreciating.

~~~
jb775
Gold/Silver prices are sky high right now, not a good time to buy them. Not to
mention buying physical metals involves high transaction costs, which is
frustrating. Precious metals are safe investments, but wouldn't expect them to
appreciate much more in the near term.

Also, money in a US bank account is FDIC insured (up to $250k or something),
how is that not secure?

------
tzury
Use it as down payment for three condos in Austin TX and rent them.

~~~
latchkey
I thought about doing rental properties and then came to the conclusion that
the amount of work to make that happen, just isn't worth it for the average
person. You're either stuck hiring some management firm or doing it yourself.
It isn't easy to get the capital back and will take years to see any sort of
returns.

Never mind the fact that we're in a pandemic where ~1.4M people a week are
losing their job. Who are you going to rent to?

~~~
triceratops
It may also mean there are desperate landlords looking to sell. If you can
deal with reduced/no rent for a year, there might be some great bargains
maybe?

~~~
latchkey
That seems like an increase in risk disproportional to the return on
investment.

------
mrsofty
consider watching www.tastytrade.com. They advocate self directed investing
using options. My wife and I live in the midwest as well and we like the
approach.

------
patricius
My allocation

    
    
      20 % in physical gold
      10 % in Bitcoin
      10 % in gold mining stock
      30 % in cash
      30 % reserved for the coming stock market crash (to pick up cheap blue chip stocks)
    

Source: gut feeling

------
tomxor
Buy a house, live in it.

Your return = time to do what you want.

------
djohnston
OOC what is industrial real estate investment?

------
snarfy
I'm not sure where you should put it, but with 150k land + 200k industrial
real estate, you should definitely not put anymore into real estate.

------
alexmingoia
I’d put $100k in bitcoin, $100k in large cap tech stocks, and keep $250k in
cash in the highest interest bearing FDIC account you can find.

------
aaron695
I'm not seeing many replies that take into account we are in the m̶i̶d̶d̶l̶e̶
beginning of a pandemic which is what was asked.

------
zanethomas
I'll handle it for you.

------
ca98am79
put every last penny into bitcoin, and I'm not kidding

------
knoebber
Buy gold

------
ysteriot
Buy Bitcoin (BTC).

------
matttheatheist
Put it all in TSLA. By some accounts, predicted to reach $3,000 per share.

------
kra34
YOLO Tesla call options - Pretty obvious. Or Kodak, both great companies.

------
beervirus
Start putting $10k/year into Series I bonds as inflation protection.

------
mesa8
Investing is a very specific and esoteric skill.

------
stickac
20% Stocks

20% Bonds

20% Real Estate

20% Cash

20% Bitcoin

------
kyleblarson
r/wallstreetbets

------
osipov
Hookers and blow

------
nodivbyzero
buy gold

------
zalkota
Bitcoin

------
CorruptVoices
Bitcoin or a 10x moonshot.

More real estate.

Gold.

Various index funds.

------
batt4good
QQQ all the way.

------
ed25519FUUU
The hottest investment in the next year I think is going to be secluded
properties away from large cities, especially if they come with fiber internet
(think Montana, Idaho).

------
slickrick216
All in chainlink

~~~
rootsudo
I enjoy how /biz/ and HN mixes together.

~~~
slickrick216
This was the most /biz/ ask hn ever in fairness.

------
whitc09
my hot stock tips free of charge $NXRT $VVNT $ALRM $NVDA

------
xiphias2
Make sure you have a store of value in your asset allocation (gold, silver or
Bitcoin) to hedge for inflation.

~~~
jacquesm
One of these is not like the others.

------
random314
Buy QQQ
[https://www.google.com/search?q=QQQ](https://www.google.com/search?q=QQQ)

------
gfodor
If you seek out average advice, expect average results.

You are going to get a bunch of people talking about equities, Bogleheads, bla
bla bla. Read the book “Expected Returns” and start pulling threads.

~~~
triceratops
The best thing about average advice is that the results are pretty much
guaranteed. Someone who's asking a question like this lacks the skill to
differentiate between better-than-average and worse-than-average advice. So
giving them average advice with nearly-guaranteed average results is doing
them a great service.

~~~
gfodor
Not if average results means they will lose their money, which is what usually
happens to people who invest money without understanding enough to manage it
themselves.

If you want advice about money listen to rich people not middle class people
who read investing forums and get rattled when the stock market drops.

~~~
triceratops
I think we have different ideas of what "average" advice is. People on
Bogleheads don't get rattled when the market drops - they buy more
aggressively.

Listening to people who got rich starting their own business, or making shrewd
investments isn't useful for most people. That approach is hard to replicate
and has far more risk. Someone who ground their way to financial independence
with disciplined, diligent, and patient investing is a more approachable and
realistic role model for a middle-class person.

Once they have a solid financial base, they can always try starting a business
or making some other bet to try and launch themselves into the ranks of the
truly rich.

Outsized wealth is a combination of hard work, good decisions _and_ good
fortune. But people (understandably) tend to minimize that last factor. So
even if a middle-class person takes a rich mentor's advice to heart and does
everything right, they may not see the same results. Whereas index-based
investing is a time and numbers game; luck doesn't come into it.

~~~
gfodor
Saying that index based investing doesn’t involve luck is exactly what I was
getting at by the usual advice. Unfortunately, buying index funds,
particularly US stock market index funds, is a matter of investing based upon
selection bias. On the long timelines demanded by index investing, staking
your claim on the US equities market is hugely risky, particularly when you
are doing so without an investment thesis that can guide you if your
assumptions change. Ask yourself if there is any condition where you would
deallocate from stocks. If the answer is no, you shouldn’t be investing - you
are just parking money somewhere based upon hope, not an investment thesis.
It’s just high class gambling. The real adjusted return of the US equities
indexes is far from certain, and trusting your financial future to them is at
best a gamble, at worst a reckless decision.

Instead of buying dumb index funds, at the very least one ought to learn about
the well studied areas of return drivers and diversify against those. The
bogleheads who invest based upon simplistic ideas like low fees, asset (not
return driver) diversification, and buy and hold in order to drive compound
returns are giving advice (imo) akin to giving “common sense” advice from 50
years ago because it feels right. The reality is half or more of that common
sense advice was proven idiotic 50 years later, and those who followed it
without the ability to adapt to the changing world ended up paying a worse
price than being wrong in the first place.

~~~
triceratops
> Ask yourself if there is any condition where you would deallocate from
> stocks.

It's reasonable to deallocate from individual stocks, or to sell to reallocate
to other investments and keep to your plan. Deallocating from the stock market
entirely, long-term is a much stronger position to take. There would need
seismic shifts in the global economy to do that, because it's like admitting
that on aggregate companies aren't going to make money anymore, right?

> staking your claim on the US equities market is hugely risky

I don't believe I ever said you should invest solely in the US equities
market. There's also REITs, ex-US developed markets, bond markets, emerging
markets.

> The reality is half or more of that common sense advice was proven idiotic
> 50 years later

Can you share sources, please? I'd love to learn more.

~~~
gfodor
Jackass Investing and Millionaire Fastlane are good layman books. Expected
Returns is a more advanced but accessible one. Also the Missing Risk Premium
is good food for thought since if its thesis is correct nearly everything you
read about risk management in typical indexing investing literature is bogus
and the opposite of true.

Tl;dr is two much more sane approaches to investing are return driver focused
or income generation focused capital allocation instead of asset appreciation
and compounding based upon speculative indexing. These btw are what rich
people do with their money (hedge funds, managed futures, income generating
investments) not park it in index funds and hope the underlyings appreciate
due to asset prices going up. Rich people pay 2/20 management fees because the
fees pay for true diversification. Diversification is real but requires
diversifying return drivers not asset classes. (Asset price changes are just
one return driver.) If you are just sitting in asset backed index funds there
are a variety of tail events (non-apocalyptic ones) where their action
correlation goes to one and you’re perma-in the red until you die.

~~~
triceratops
Thanks for the suggestions, I'll check them out.

------
danschumann
We're currently printing, and will be printing more money. This is not
investing advice. I'd put it in crypto or gold, or foreign stocks which are
not undermining their dollar.

~~~
danschumann
Where are my down voters now?

------
xwdv
Take $200k and build out an equal weight portfolio of a bunch of different
tech stocks. Take $160k and use as a downpayment on two different turnkey
rental properties. Invest the remaining $90k in a decent index or mutual fund,
different from the one you already have.

------
tuesdayrain
Surprised I'm the first person to mention Ethereum. And by the amount of
people bashing Bitcoin. I suspect those are mainly emotional responses by
people who are unhappy they knew about cryptocurrency for years and missed out
on profits. In my opinion it's foolish to not dedicate at least 5-10% of a
portfolio to high risk assets.

------
technicolorwhat
Maximise what return? Money? Gratitude? Ego?

\- If you'd like to make a dent into ones life, help someone out with a low
income to achieve their goals. Like paying for a drivers license or buying a
okay car so mom can bring her kid to school. With that kind of money you can
help a lot of people. \- If you want to use money to feel safe, put some money
on therapy, to know you never needed it in the first place and to get to know
yourself. Buy a piece of land for everyone to live on your family and friends.
\- Ego? Spend it on cars? Parties, everything that was unreachable and plaster
your confidence. \- Want more money? Invest it in arms, wind energy, or start
your own fund in the balkans.

Up to you

------
cenal
I’d buy more cash flow generating real estate.

As others have noted, we are printing cash and all assets valued in our
currency are likely to be impacted.

Unlike gold, real estate should be able to generate cash and not cost you cash
to hold.

They aren’t making more land. With rising sea levels there will likely be less
land.

Midwest is a great place to invest. So is the south east.

If you want more information about what we do in these areas checkout our
website:

[http://www.accredited-capital.com](http://www.accredited-capital.com)

We are working to create returns for investors while also making a local
impact by increasing levels of home ownership in areas that have routinely
been overlooked by Wall Street.

Depending on your situation, these investments might also not be subject to
tax.

Email me for more info if interested lcampbell (at) accredited-Capital (dot)
com

~~~
mancerayder
Property taxes are likely to go up as municipalities struggle with budget
issues due to a short and medium-term economic problem of reduced income in
retail and other industries.

A huge number of people are thrown out of work and many of those people are
renters, and renters pay rent to owners of property, and those property owners
rely on the income to pay their mortgages.

They capped property tax and local tax deductions federally, they capped the
mortgage interest deduction and can potentially go further in that regard.

I'm playing contrarian not because I think property shouldn't be owned or
invested in (I did it as owner-occupier and landlord), or because I disagree
with the statement about printing cash having to go somewhere, but rather
because your comment is one-sided and sales-y.

------
Hbthegreat
If you want to learn a lot about startups and feel like meeting with a lot you
could distribute it in multiple $20k-$30k bets in up and coming startups you
believe in. If you aim at landing cash in 20-30 startups with that cash many
of them will go to $0, some will be a break even or moderate success, and 1 or
2 might be a likely winner of the entire strategy. Angel investing isn't for
everyone and also there are many better ways to see a "more guaranteed" return
on investment but little as interesting as getting a front row seat to the
future. If you are purely after risk adjusted returns then just make sure you
are allocating to beat inflation, mitigate hyper inflation and into something
you know or want to know a lot about. Many great investors out there to learn
from but if you want the "starter" guide Angel by Jason Calacanis is a pretty
decent book to read.

------
hedora
Cash out refi everything you can. At 3%, 30 year fixed, with fed target
inflation rates of 2-3%, you’ll need a < 1% real return to make money on the
transaction (ignoring fees).

If you can’t get that with passive investments over the next 30 years, the
banks will have bigger problems than your loan.

Despite your risk aversion, consider putting some in a robo advisor (mix of
bonds, index, foreign index, etc), to hedge against a spike in inflation, or a
crash of just the US economy. The dollar has been falling recently. The robo
will auto rebalance as the economic climate shifts.

As for the cash holding, you can at least get 0.35% at Wealthfront in a cash
account. (Does anyone know of a higher return cash account?)

Bond yields are slightly higher, but not much these days.

I’m in a similar position, and am also betting on a crash soon.

I have been putting 2-5% into a robo every few weeks (when the market
flinches). It’s been a bad strategy (I should have gone all in a month or so
ago), but it’s better than 100% cash. If the market hasn’t crashed in a year
or so, I’ll be all in.

I bet against the market for most of the Obama administration (because the
bailout / zero interest rates didn’t seem sustainable). Clearly, that was a
mistake.

You can’t beat the fed, and right now, the fed is printing unlimited money to
prop up ETFs and issuers of junk bonds. Also, investors are holding record
amounts of cash, and are slowly putting it back into the market in seek of
yields.

Good luck.

~~~
overcast
If you're betting on a crash soon, why not just hedge your existing positions
on long dated PUT options? That's what they are for , insurance.

As far as OP is concerned, there's not much point into cashing everything if
the timescale is greater than 5+ years for needing any of it. Trying to time
the market is just a fools game, consistent investments in the indexes always
works out in your favor long term.

Regarding interest rates, .35% is pretty poor, just off the top of my head
Marcus is over 1%.

~~~
ajuc
If you bet on a huge crash then your PUTs will lose the value anyway. So what
if they give you 50% profit when the inflation is 1000%.

~~~
overcast
A huge crash will net you much more than 50% profit, you can pull that any day
of the week for the last 4 months with the market volatility.

~~~
ajuc
With PUTs the maximum you can earn is 99.999%

With inflation you can lose much more.

~~~
overcast
What? That’s completely false. The last S&P dump in May net me roughly $1550
per $150 SPY contract.

------
throwaway743
For now, steer clear away from index funds, stocks, property investments, etc.
Things are looking to get ugly in the near future.

Maybe bear ETFs or put options against stocks that have performed well over
the year if you're really looking to drop money into something, but that's
pretty risky in itself.

Also, be cautious if thinking about any crypto investments in the next month
or so. Short term is way over bought for BTC, but towards end of fall into
winter when the price corrects a bit could be a good time to invest a
conservative amount.

Just holding and waiting out the coming storm is the safest way to go at the
moment imo

------
janandonly
1\. Read this: [https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-
cro...](https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-
model-50d260feed12)

2\. Buy and hold Bitcoin for a while. (longer is better).

~~~
overcast
Any mention of Bitcoin or cryptocurrency investing should be banned on HN.

~~~
WrtCdEvrydy
Arguable, I'd put in a $10,000 into it if I had the cash to spare. It's made
me decent money.

~~~
overcast
Yeh sure, made me lots years ago, also cost magnitudes more their life
savings. It doesn't sound like OP is looking for gambling.

~~~
WrtCdEvrydy
Not really, as far as four months ago, Bitcoin was at 8k per coin... today
it's around 11k per coin, it's about 30ish percent profit.

Edit: Unless you bought 11k+ and sold below that point, there's no chance you
lost on Bitcoin.

~~~
throwaheyy
Not really, you can double your money at the casino too, doesn’t mean it’s not
gambling.

It’s the risk and volatility that separate investment from gambling, not the
return. Bitcoin is firmly in the latter territory.

