Best place to put my cash right now

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Topic Author
charged
Posts: 10
Joined: Mon Jan 08, 2018 12:10 am

Best place to put my cash right now

Post by charged »

Hello All,

I recently liquidated about 600k of my investments by selling my VTSAX. The remaining 500k is still invested in VTSAX.

I don't want to put my money in either stocks or stock related ETFs due to the current situation. The money automatically went into Vanguard's default money market account. I believe this returns about 1.7%; more recent returns are 0.4%

I am thinking of moving the money to a higher return (with not too much volatility) investment. Something like treasury ETFs (VGIT, VGSH etc) or bonds or CDs or other money market funds etc...; I want to get back into VTSAX once the market stabilizes (say an year or so)

What would be the best place to invest the cash now? Thanks for your time
bloom2708
Posts: 8182
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Best place to put my cash right now

Post by bloom2708 »

Ally/Marcus/Redneck for FDIC and ~1.25%. $250k for each person, so you may have to split or use joint accounts.

For funds and ETFs always check the SEC Yield. That is the going forward rate if nothing changes. Which it always does.

Many timing threads right now. People have had it. It might be a good time to test out new mixes of stocks/bonds/cash or it might not.

Much depends on age and progress toward saving for retirement.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
Topic Author
charged
Posts: 10
Joined: Mon Jan 08, 2018 12:10 am

Re: Best place to put my cash right now

Post by charged »

I am 40 but don't plan to work till 50; I might call quits once I reach a networth of 2M+ in say 5-6 years market permitting
tashnewbie
Posts: 824
Joined: Thu Apr 23, 2020 12:44 pm

Re: Best place to put my cash right now

Post by tashnewbie »

I'd recommend choosing an asset allocation between stocks/bonds/etc that allows you to sleep well at night and say in the market through thick and thin. What was your AA before you cashed out?
Topic Author
charged
Posts: 10
Joined: Mon Jan 08, 2018 12:10 am

Re: Best place to put my cash right now

Post by charged »

Before I cashed out I was 90% stocks and 10% bonds; Now I am 60% money market and 40% stocks; I feel even bonds might go down now; Would something like VGIT (Treasury intermediate index) be better than putting in either money market (low return) or bonds (more volatility than treasury)
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Clever_Username
Posts: 1749
Joined: Sun Jul 15, 2012 12:24 am
Location: Southern California

Re: Best place to put my cash right now

Post by Clever_Username »

charged wrote: Fri May 29, 2020 1:36 pm Before I cashed out I was 90% stocks and 10% bonds; Now I am 60% money market and 40% stocks; I feel even bonds might go down now; Would something like VGIT (Treasury intermediate index) be better than putting in either money market (low return) or bonds (more volatility than treasury)
What do you know about market movements that allows you to make such predictions and expect them to be accurate?

What was wrong with the 90/10 in January?
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.
Topic Author
charged
Posts: 10
Joined: Mon Jan 08, 2018 12:10 am

Re: Best place to put my cash right now

Post by charged »

I understand the general advice is to set a fixed allocation (say 70 stocks, 30 bonds) and leave it that way. I feel at this point there is little upwards trajectory for the market and I am willing to risk losing any gains if the market goes up but not willing to risk lose any of my existing capital

Given that, what would you guys suggest to put the money in. Any downsides with the treasury index funds that I need to be aware of?
annu
Posts: 810
Joined: Mon Nov 04, 2019 7:55 pm

Re: Best place to put my cash right now

Post by annu »

I plan on moving to https://investor.vanguard.com/mutual-fu ... file/VFISX from money market, it did not get severely impact in March and is short duration enough that will fit for current environment.

I am also considering moving to VGLT for my BND allocation, 1 to 1 swap. Could not do it today, but that is the plan for Monday.
That way you can avoid MBS, yields are lower but you are with US treasury.

You can look into some TIPS funds as well, but yields are very low.

Nothing wrong with preserving what you have, or atleast trying to.
J295
Posts: 2631
Joined: Sun Jan 01, 2012 11:40 pm

Re: Best place to put my cash right now

Post by J295 »

In response to your discrete question to meet your stated objectives (not the objectives myself or someone else thinks you should have) ...... look at FDIC insured savings accounts. Recent rates were approximately 1.3%.
2020 ButClassic
Posts: 31
Joined: Sat Feb 29, 2020 8:27 pm

Re: Best place to put my cash right now

Post by 2020 ButClassic »

I enjoyed it when banks gave me over 3% interest last year and accept it that they are closer to 1% now.

I don't feel compelled to chase other investment categories especially when not being able to predict the future.
Topic Author
charged
Posts: 10
Joined: Mon Jan 08, 2018 12:10 am

Re: Best place to put my cash right now

Post by charged »

Thanks Annu and others; I also found this link which seems to answer the questions; You can try changing the year range to the 2008 recession

https://www.portfoliovisualizer.com/opt ... sisResults
Rudedog
Posts: 268
Joined: Wed Aug 01, 2018 3:15 pm

Re: Best place to put my cash right now

Post by Rudedog »

Go with CDs at online banks. FDIC insured. If the main objective is safety, you have to give up some potential return for safety. Yes, I wish the rate available was still 3%, but it just isn't right now.
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