Should I invest $100K in S+P 500: my time horizon is 5 years
-
- Posts: 4
- Joined: Sat Apr 02, 2011 12:39 pm
Should I invest $100K in S+P 500: my time horizon is 5 years
Dear Bogleheads,
I am a very aggressive investor who does not get rattled when investing in Vanguard's S and P 500 index fund. I say this factually, not to show off, and have coped for years with wild swings without any problem. I have always, always stayed the course and ended up making very good returns. In short, I have US $100,000 I wish to invest in the S and P 500 but I definitely need access to this sum in 5 years. If I suffer a loss on this investment after waiting 5 years, I am screwed. Should I go for it?
Warm Regards, Ethical Buddhist
I am a very aggressive investor who does not get rattled when investing in Vanguard's S and P 500 index fund. I say this factually, not to show off, and have coped for years with wild swings without any problem. I have always, always stayed the course and ended up making very good returns. In short, I have US $100,000 I wish to invest in the S and P 500 but I definitely need access to this sum in 5 years. If I suffer a loss on this investment after waiting 5 years, I am screwed. Should I go for it?
Warm Regards, Ethical Buddhist
- nisiprius
- Advisory Board
- Posts: 52215
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Assuming you can't tolerate the risk of being screwed, no. Simple as that.ethicalbuddhist wrote:If I suffer a loss on this investment after waiting 5 years, I am screwed. Should I go for it?
Come on, you should know the answer for yourself. If you'd invested $100,000 in the S&P 500 in March of 2009 minus 5 = March of 2009, then five years later, after waiting 5 years, you'd have had $70,000. You'd have been screwed.
If you think "Oh, but it can't happen again, not that soon," then you ought to look at what happened in 1936, just when everyone thought the market had finally recovered. It crashed again. If you'd put $100,000 into the S&P 90 at year-end 1936, after waiting five years, at year-end 1941 you'd have had $68,000. Screwed.
I'm too cheap to update my copy of the SBBI yearbook so this doesn't even include anything past 2004, but it says that for 5-year rolling periods, from 1926 through 2004, a 100% stocks portfolio made money only 65 times out of 75. So, 10 times out of 75, after waiting five years, all together now: screwed.
Even after waiting 10 years, screwed, 2 times out of 70. Same odds as rolling snakeeyes.
Last edited by nisiprius on Thu Apr 28, 2011 4:33 pm, edited 7 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
- touchdowntodd
- Posts: 808
- Joined: Sat Oct 31, 2009 9:50 am
u basically tell us you wanna do it... so go for it, and report back as to how you did..
personally, for 5 years.. i would max out Ibonds, high yield savings accounts with special rates for the first $25k, etc...
i wont invest anything i even MIGHT need in the next 10 years in the market... let alone that large of a chunk into 1 specific stock index...
personally, for 5 years.. i would max out Ibonds, high yield savings accounts with special rates for the first $25k, etc...
i wont invest anything i even MIGHT need in the next 10 years in the market... let alone that large of a chunk into 1 specific stock index...
tryin to do this right... thanks guys
Re: Should I invest $100K in S+P 500: my time horizon is 5 y
Not if I was investing!ethicalbuddhist wrote:In short, I have US $100,000 I wish to invest in the S and P 500 but I definitely need access to this sum in 5 years. If I suffer a loss on this investment after waiting 5 years, I am screwed. Should I go for it?
But, then again, it is YOU investing.
Landy |
Be yourself, everyone else is already taken -- Oscar Wilde
Your posts are so good. Completely agree.nisiprius wrote:Assuming you can't tolerate the risk of being screwed, no. Simple as that.ethicalbuddhist wrote:If I suffer a loss on this investment after waiting 5 years, I am screwed. Should I go for it?
Come on, you should know the answer for yourself. If you'd invested $100,000 in the S&P 500 in March of 2009 minus 5 = March of 2009, then five years later, after waiting 5 years, you'd have had $70,000. You'd have been screwed.
If you think "Oh, but it can't happen again, not that soon," then you ought to look at what happened in 1936, just when everyone thought the market had finally recovered. It crashed again. If you'd put $100,000 into the S&P 90 at year-end 1936, after waiting five years, at year-end 1941 you'd have had $68,000. Screwed.
I'm too cheap to update my copy of the SBBI yearbook so this doesn't even include anything past 2004, but it says that for 5-year rolling periods, from 1926 through 2004, a 100% stocks portfolio made money only 65 times out of 75. So, 10 times out of 75, after waiting five years, all together now: screwed.
Even after waiting 10 years, screwed, 2 times out of 70. Same odds as rolling snakeeyes.
If the OP can't tolerate any risk, he should not be investing in stocks.
No!!.Use online savings accounts,CD's and maybe a portion in a short term bond fund.In short, I have US $100,000 I wish to invest in the S and P 500 but I definitely need access to this sum in 5 years. If I suffer a loss on this investment after waiting 5 years, I am screwed. Should I go for it?
All the Best, |
Joe
-
- Posts: 1368
- Joined: Wed Mar 09, 2011 1:32 am
- Location: San Jose
- interplanetjanet
- Posts: 2226
- Joined: Mon Jan 24, 2011 3:52 pm
- Location: the wilds of central California
Re: Should I invest $100K in S+P 500: my time horizon is 5 y
Define "screwed". Is this "the mafia will break all your fingers and then shoot you" screwed, or "your interest rates might go higher if you can't make a balloon payment" screwed? Do you need $100k real or nominal?ethicalbuddhist wrote:If I suffer a loss on this investment after waiting 5 years, I am screwed. Should I go for it?
Everything has risk. Getting out of bed in the morning has risk. Then again, so does staying in bed.
-Janet
-
- Posts: 78
- Joined: Thu Feb 10, 2011 2:58 pm