Any advice on investing 200k, short term 1 yr?

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leleballpen
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Any advice on investing 200k, short term 1 yr?

Postby leleballpen » Fri May 19, 2017 4:42 pm

Hello~
I am a beginner to the market, and just got the book ‘The Bogleheads' Guide to Investing’ two days ago and now reading. Thanks for sharing all the information here!

My question is I have 200k in saving. We are planning to use this money to purchase a house in 1-2 years. Now the money is on our banking account. We are wondering what investment we should do about this 200k to 1) get a higher return than interest in bank, beat the inflation. 2) low risk, since we will use it to buy a property. 3) short term, we are planning to withdraw the money in 1-2 years.

We have been looking for bonds.. But have little idea about which bonds are best for my case. So I am here to get some help. Thanks in advance!!

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LadyGeek
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Re: Any advice on investing 200k, short term 1 yr?

Postby LadyGeek » Fri May 19, 2017 6:41 pm

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MotoTrojan
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Re: Any advice on investing 200k, short term 1 yr?

Postby MotoTrojan » Fri May 19, 2017 6:45 pm

CD. Maybe a 2-3 year CD with a removal penalty that would still maintain more value than a 1.5-2 year CD.

aristotelian
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Re: Any advice on investing 200k, short term 1 yr?

Postby aristotelian » Fri May 19, 2017 6:46 pm

If you can take a little risk to earn more return than a CD and better liquidity, consider Vanguard Short Term Investment Grade (VFSTX) or Short Term Corporate ETF (VCSH). I have my 2nd tier emergency fund in VCSH. Stay away from anything intermediate or long term.

leleballpen
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Re: Any advice on investing 200k, short term 1 yr?

Postby leleballpen » Tue May 23, 2017 8:12 pm

Thanks for all the replies!!! :D I will try to diversify these money, CD, bond and market! Thanks!

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badbreath
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Re: Any advice on investing 200k, short term 1 yr?

Postby badbreath » Tue May 23, 2017 8:43 pm

this may help all are good suggestions but I would also listen in on the podcast cuz he gives a bit more info.

http://www.doughroller.net/investing/th ... vestments/
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

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Bogle_Feet
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Re: Any advice on investing 200k, short term 1 yr?

Postby Bogle_Feet » Wed May 24, 2017 2:03 am

leleballpen wrote:We have been looking for bonds.. But have little idea about which bonds are best for my case. So I am here to get some help. Thanks in advance!!

Don't invest in INDIVIDUAL bonds. Invest in a total bond market index fund. BTW 100% bonds is actually more risky than 72% bonds / 28% stocks.
http://investingadvicewatchdog.com/imag ... return.jpg
http://investingadvicewatchdog.com/imag ... 2-year.jpg

aqan
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Re: Any advice on investing 200k, short term 1 yr?

Postby aqan » Wed May 24, 2017 5:40 am

aristotelian wrote:If you can take a little risk to earn more return than a CD and better liquidity, consider Vanguard Short Term Investment Grade (VFSTX) or Short Term Corporate ETF (VCSH). I have my 2nd tier emergency fund in VCSH. Stay away from anything intermediate or long term.

thanks. I was looking for something like VCSH for my 2nd tier emergency fund.

aqan
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Re: Any advice on investing 200k, short term 1 yr?

Postby aqan » Wed May 24, 2017 11:46 am

Bogle_Feet wrote:
leleballpen wrote:We have been looking for bonds.. But have little idea about which bonds are best for my case. So I am here to get some help. Thanks in advance!!

Don't invest in INDIVIDUAL bonds. Invest in a total bond market index fund. BTW 100% bonds is actually more risky than 72% bonds / 28% stocks.
http://investingadvicewatchdog.com/imag ... return.jpg
http://investingadvicewatchdog.com/imag ... 2-year.jpg


@Bogle_Feet - is there an ETF/MF you can suggest that implements this magic 72/28 formula?

BogleAlltheWay
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Re: Any advice on investing 200k, short term 1 yr?

Postby BogleAlltheWay » Wed May 24, 2017 12:43 pm

The Vangaurd life strategy Income does close to this 80/20

https://personal.vanguard.com/us/funds/snapshot?FundId=0723&FundIntExt=INT

mega317
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Re: Any advice on investing 200k, short term 1 yr?

Postby mega317 » Wed May 24, 2017 2:16 pm

I suggest you just leave it in a high-yield savings account. Yes you can get another 1% using VCSH but you can also lose that or more from the principle. And what if the bank doesn't let you break a CD? Or you happen to find a house you want in less than a year?

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Bogle_Feet
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Re: Any advice on investing 200k, short term 1 yr?

Postby Bogle_Feet » Wed May 24, 2017 2:28 pm

aqan wrote:@Bogle_Feet - is there an ETF/MF you can suggest that implements this magic 72/28 formula?

A total bond market index fund like BND or AGG
And an S&P 500 index fund like SPY

Tamarind
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Re: Any advice on investing 200k, short term 1 yr?

Postby Tamarind » Wed May 24, 2017 2:40 pm

Another vote for leaving it in a high yield savings account. Collect your $2000 in interest and then buy the house. Don't take any risk with your down payment when it is not needed to hit the number you need.


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