Need 10 month parking space for large sum

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Topic Author
GeorgiaPapa
Posts: 7
Joined: Sun Mar 08, 2020 4:24 pm

Need 10 month parking space for large sum

Post by GeorgiaPapa » Thu Mar 26, 2020 11:52 am

Hello,

Just sold our real estate and will owe large capital gains tax at year-end. I would like to put it somewhere that will have a good chance of making more than the 1.5% MM rate. It's ok if it goes down a little bit, but it should have a better chance of going up. I'm thinking of perhaps the Wellesley fund. Any thought will be appreciated. We will be in the highest tax bracket this year.

Thesaints
Posts: 3453
Joined: Tue Jun 20, 2017 12:25 am

Re: Need 10 month parking space for large sum

Post by Thesaints » Thu Mar 26, 2020 11:53 am

If you find a 1.5% yield for the year with guaranteed capital don’t walk, but run

bloom2708
Posts: 7450
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Need 10 month parking space for large sum

Post by bloom2708 » Thu Mar 26, 2020 11:56 am

Wellesley is not a good/safe option for a short term goal.

For 10 months. FDIC insured savings/money market.
"People want confirmation, not advice" Unknown | "We are here to provoke thoughtfulness, not agree with you" Unknown | Four words: Whole food, plant based

dbr
Posts: 32167
Joined: Sun Mar 04, 2007 9:50 am

Re: Need 10 month parking space for large sum

Post by dbr » Thu Mar 26, 2020 12:00 pm

GeorgiaPapa wrote:
Thu Mar 26, 2020 11:52 am
Hello,

Just sold our real estate and will owe large capital gains tax at year-end. I would like to put it somewhere that will have a good chance of making more than the 1.5% MM rate. It's ok if it goes down a little bit, but it should have a better chance of going up. I'm thinking of perhaps the Wellesley fund. Any thought will be appreciated. We will be in the highest tax bracket this year.
The thought is that for every chance of going up there is an equal chance of going down in short time frames such as less than a year. So if you were hoping to gain 5%, then you also have to be willing to accept a loss of 5%, etc. Based on what you say Wellesley would not be a good idea. Frankly you will be lucky to get 1.5% with any preservation of value this year. It might be locking in a current rate on some CDs would be the best you can do.

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vineviz
Posts: 5667
Joined: Tue May 15, 2018 1:55 pm

Re: Need 10 month parking space for large sum

Post by vineviz » Thu Mar 26, 2020 12:00 pm

GeorgiaPapa wrote:
Thu Mar 26, 2020 11:52 am
Hello,

Just sold our real estate and will owe large capital gains tax at year-end. I would like to put it somewhere that will have a good chance of making more than the 1.5% MM rate. It's ok if it goes down a little bit, but it should have a better chance of going up. I'm thinking of perhaps the Wellesley fund. Any thought will be appreciated. We will be in the highest tax bracket this year.
If it were me I'd use something like iShares iBonds Dec 2020 Term Corp ETF (IBDL). A little more risk than MM - though not a lot IMHO - but also higher yield.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

mega317
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Joined: Tue Apr 19, 2016 10:55 am

Re: Need 10 month parking space for large sum

Post by mega317 » Thu Mar 26, 2020 12:15 pm

No penalty CDs are around there. The expectation is the savings accounts will drop.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

bltn
Posts: 680
Joined: Mon Feb 20, 2017 9:32 pm

Re: Need 10 month parking space for large sum

Post by bltn » Thu Mar 26, 2020 12:56 pm

Shop for a CD two lock in a rate.

You might also want to look at the Vanguard Ultra Short Term Bond Fund.

surfstar
Posts: 2069
Joined: Fri Sep 13, 2013 12:17 pm
Location: Santa Barbara, CA

Re: Need 10 month parking space for large sum

Post by surfstar » Thu Mar 26, 2020 12:58 pm

Look for the best brokerage account bonus and park it in a safe MM fund or CD or something.

Bonus cash will be your best bet to increase return safely.

Topic Author
GeorgiaPapa
Posts: 7
Joined: Sun Mar 08, 2020 4:24 pm

Re: Need 10 month parking space for large sum

Post by GeorgiaPapa » Thu Mar 26, 2020 1:23 pm

Thanks to all of you for those opinions! I'll investigate each suggestion.

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