What to do with cash

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
DIYInvestor2020
Posts: 7
Joined: Sun Jul 26, 2020 3:24 pm

What to do with cash

Post by DIYInvestor2020 » Thu Jul 30, 2020 12:30 pm

Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time. I am looking to move the money over to my brokerage account (which is all index funds) at some point, I'd just prefer not to do it when we are trending upward and possibly will downturn again soon. I've looked into Vanguard's money market funds and they are super low rates of .11%. Online savings accounts are 1.1% at the highest. So, knowing that I want the flexibility to pull the money out of whatever I put it into for the next 3 months or so, what are ya'lls thoughts on what to put it into the interim? Are there any better ideas out there?

Thanks!!

SantaClaraSurfer
Posts: 166
Joined: Tue Feb 19, 2019 11:09 am

Re: What to do with cash

Post by SantaClaraSurfer » Thu Jul 30, 2020 12:43 pm

Mid-career, college-age kids (where most of our cash goes) and we are doing 3 things:

1. We moved our immediate college cash and savings from Schwab Money Fund SWKXX (.01% Yield) to our Schwab Sweep Account (.01% Yield) simply to take advantage of the FDIC Insurance. This is money we are using to pay for college in the next 9 months. It's going to be spent, the price for the year is pre set, we don't want to have to think about it.

2. We are keeping our 3 year horizon savings in a CA Tax Free Muni Bond Fund SWCAX (.85%).

3. Our long term Fixed Income contributions are in EE Bonds, I Bonds, Long Term Municipal Bonds. (As well as the low cost Bond Index Funds in our 401(k)s.)

Not offering you advice, just sharing our choices.

retiringwhen
Posts: 1758
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: What to do with cash

Post by retiringwhen » Thu Jul 30, 2020 12:44 pm

Look at Ally Bank No Penalty CD's they are 11 mo. CDs with currently .0.95% APY and there is no penalty for early withdrawal after 6 days. About as close to a free lunch you can get right now. Locks in a rate for almost a year and also easily accessible. They also have just a normal savings @ 1.0% but it may drop tomorrow....

Be warned, EFT setup will take a week plus for a new account, but I think you can send in checks (I just use EFT).

User avatar
ruralavalon
Posts: 18828
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: What to do with cash

Post by ruralavalon » Thu Jul 30, 2020 1:19 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time. I am looking to move the money over to my brokerage account (which is all index funds) at some point, I'd just prefer not to do it when we are trending upward and possibly will downturn again soon. I've looked into Vanguard's money market funds and they are super low rates of .11%. Online savings accounts are 1.1% at the highest. So, knowing that I want the flexibility to pull the money out of whatever I put it into for the next 3 months or so, what are ya'lls thoughts on what to put it into the interim? Are there any better ideas out there?

Thanks!!
In my opinion the "better idea" is that you not try to time the stock market.

I would not bet money that the stock market will drop (or not drop) "around election time".

A "downturn" is always possible, "soon" is always debatable. That is not unique to today.

Holding cash waiting for a good time to buy is a bad idea. Holding cash waiting for a good time to buy will guarantee you a negative real return net of inflation and taxes.

No matter what day you decide to pull the trigger you will never know whether the next day, or next week, or next month, or even the next year might be an even better time to buy.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
1789
Posts: 1561
Joined: Fri Aug 16, 2019 3:31 pm

Re: What to do with cash

Post by 1789 » Thu Jul 30, 2020 1:37 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time. I am looking to move the money over to my brokerage account (which is all index funds) at some point, I'd just prefer not to do it when we are trending upward and possibly will downturn again soon. I've looked into Vanguard's money market funds and they are super low rates of .11%. Online savings accounts are 1.1% at the highest. So, knowing that I want the flexibility to pull the money out of whatever I put it into for the next 3 months or so, what are ya'lls thoughts on what to put it into the interim? Are there any better ideas out there?

Thanks!!
Unless we are talking about a million dollar in CASH, i would not bother myself getting extra 10-20$ a month by putting some efforts into this.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

dbr
Posts: 33244
Joined: Sun Mar 04, 2007 9:50 am

Re: What to do with cash

Post by dbr » Thu Jul 30, 2020 2:04 pm

1. Don't try to time the stock market.

2. No, there are no good ideas out there.

3. 1. and 2. are completely serious.

Topic Author
DIYInvestor2020
Posts: 7
Joined: Sun Jul 26, 2020 3:24 pm

Re: What to do with cash

Post by DIYInvestor2020 » Thu Jul 30, 2020 2:44 pm

Thank you SantaClaraSurfer and Retiringwhen. I'm assuming that your holding the bonds in your tax free accounts SantaClaraSurfer? Retiringwhen, I've seen the Allybank rates......I was thinking about that. Good to know EFT takes a week to get set up, thanks for the pointer.

And no, I don't have a million in cash, but I do want to be thoughtful about what I do with it, and when. I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.

atlgenxennial
Posts: 62
Joined: Tue Jul 11, 2017 1:45 pm

Re: What to do with cash

Post by atlgenxennial » Thu Jul 30, 2020 2:51 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
What % are you up or down on that $?

I think you need a more realistic plan of what you're going to do with your money, right now it appears you are just winging it and you need a plan.

Sage16
Posts: 103
Joined: Sun Mar 27, 2016 11:06 pm

Re: What to do with cash

Post by Sage16 » Thu Jul 30, 2020 3:00 pm

retiringwhen wrote:
Thu Jul 30, 2020 12:44 pm
Look at Ally Bank No Penalty CD's they are 11 mo. CDs with currently .0.95% APY and there is no penalty for early withdrawal after 6 days. About as close to a free lunch you can get right now. Locks in a rate for almost a year and also easily accessible. They also have just a normal savings @ 1.0% but it may drop tomorrow....

Be warned, EFT setup will take a week plus for a new account, but I think you can send in checks (I just use EFT).
+1
Bogle on investing: Diversify, focus on low costs, invest for the long term. Don't speculate and don't be distracted by volatility.

surfstar
Posts: 2162
Joined: Fri Sep 13, 2013 12:17 pm
Location: Santa Barbara, CA

Re: What to do with cash

Post by surfstar » Thu Jul 30, 2020 3:16 pm

...and if you put money in on March 23rd you'd be elated and wish you have put more in.

Is this cash for immediate, short-term, or long-term use/goals? That is what should dictate where you put/invest it - not the current market prices.

User avatar
arcticpineapplecorp.
Posts: 5622
Joined: Tue Mar 06, 2012 9:22 pm

Re: What to do with cash

Post by arcticpineapplecorp. » Thu Jul 30, 2020 3:28 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
what's there to be burned about? Even if you put the money in the market on the highest day this year before the market fell, you'd only be down 3% between that high point and yesterday's close:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

have you read about Bob, the world's worst market timer? If not read it here: https://awealthofcommonsense.com/2014/0 ... ket-timer/
Bob only bought at market peaks right before the market fell. He did that over and over again. I'll let you read the article to see how it turned out for Bob.

the morals of the story:
1. if the market keeps going up over time, it doesn't matter if you previously bought at a "high" price.
2. don't sell. capture the long term return of the market.

as for a plan being recommended, here's the place to start:
https://www.bogleheads.org/wiki/Investm ... _statement
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

User avatar
LilyFleur
Posts: 1345
Joined: Fri Mar 02, 2018 10:36 pm

Re: What to do with cash

Post by LilyFleur » Thu Jul 30, 2020 3:42 pm

I'm retired.

I also moved my brokerage cash from Schwab's money market to the sweep fund.

I paid off my HELOC at the end of last year (4.25%)

I did a large Roth conversion last year and paid the taxes out of my brokerage cash.

I will do another conversion this year. I also will purchase some VPU and VYM in taxable. I am a bit light on equities right now, so that will put my portfolio back into an AA that I feel comfortable with. With interest rates so low, I find dividend stocks more attractive to help on cash flow. And if things go south, I have the option of tax loss harvesting since the VPU and VYM will be in my taxable account.

SantaClaraSurfer
Posts: 166
Joined: Tue Feb 19, 2019 11:09 am

Re: What to do with cash

Post by SantaClaraSurfer » Thu Jul 30, 2020 3:42 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
1.Thank you SantaClaraSurfer. I'm assuming that your holding the bonds in your tax free accounts SantaClaraSurfer?

2.I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
1. To answer your question we purchase most of our bonds in our 401(k)s via the low-fee bond Index Funds that are part of our Target Dates. We contribute to our 401(k)s on a regular schedule that doesn't change depending on what the market does. (We just deduct the same amount from our pay every month automatically.)

We also purchase tax deferred I Bonds and EE Bonds via Treasury Direct and Tax Free CA Municipal Bonds via our brokerage as part of our after tax strategy. Either way, that does not seem like your original question, so I am just clarifying. Our strategy (keeping our 401(k)s with a target date fund allocation) isn't typical of everyone here, but it has worked for us so far. It's not really on topic.

2. In terms of the clarification of your question, it now definitely seems like you are asking a broader investing question and by "cash" you mean money that you are investing/saving for retirement, not money you intend to spend in the next 0-3 years.

Is that correct?

If so, I don't think I have any good information to share other than to read the Wiki here and find a Boglehead Strategy and Asset Allocation that works for you and your family. I've learned a good deal on these forums just by asking questions. If it helps, I get more Boglehead the more I read and learn.

User avatar
vineviz
Posts: 7254
Joined: Tue May 15, 2018 1:55 pm

Re: What to do with cash

Post by vineviz » Thu Jul 30, 2020 3:53 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
. I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
If you “understand” that you can’t time the market, why are you trying to time the market?

What could make you feel “comfortable” investing that hasn’t already happened?

Stocks going up another 20% from where they are now? You know that intentionally buying at higher prices is bad, right?

Stocks going down 20% from where they are now? You know that didn’t feel “comfortable” the last time it happened.

Stocks going sideways for six months? If the S&P 500 is at the same level in December that it is now, what makes that more “comfortable”?

Don’t rationalize a behavior you know is irrational: get used to being slightly uncomfortable from time to time, or make a change (increase your savings rate and lower your equity allocation) until you can do what you “understand “ to be the right thing to do.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

KirklandCoug
Posts: 37
Joined: Tue Jan 31, 2017 6:05 pm
Location: Kirkland

Re: What to do with cash

Post by KirklandCoug » Thu Jul 30, 2020 4:16 pm

What's going to happen after the election? Will someone be elected? That's what normally happens.

Housedoc
Posts: 654
Joined: Thu May 24, 2018 4:25 pm
Location: Alabama

Re: What to do with cash

Post by Housedoc » Thu Jul 30, 2020 4:45 pm

Buy Apple and let it ride. Reinvest dividend. Not a Boglehead idea but it is working for me!

Topic Author
DIYInvestor2020
Posts: 7
Joined: Sun Jul 26, 2020 3:24 pm

Re: What to do with cash

Post by DIYInvestor2020 » Thu Jul 30, 2020 5:22 pm

arcticpineapplecorp. wrote:
Thu Jul 30, 2020 3:28 pm
DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
what's there to be burned about? Even if you put the money in the market on the highest day this year before the market fell, you'd only be down 3% between that high point and yesterday's close:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

have you read about Bob, the world's worst market timer? If not read it here: https://awealthofcommonsense.com/2014/0 ... ket-timer/
Bob only bought at market peaks right before the market fell. He did that over and over again. I'll let you read the article to see how it turned out for Bob.

the morals of the story:
1. if the market keeps going up over time, it doesn't matter if you previously bought at a "high" price.
2. don't sell. capture the long term return of the market.

as for a plan being recommended, here's the place to start:
https://www.bogleheads.org/wiki/Investm ... _statement

Wow, that is literally the day we put a bunch of money into Vanguard funds. Good point- they are only down 3% now. So yes, this cash on hand is for retirement purposes. Thank you all for your honest, and brutal feedback on market timing. Its like when my mother in law told my spouse they gained weight and are getting fat- sometimes you just have to have people keep it real :shock: So yep, no more trying to market time and I'll just put the cash into my index funds. I am in for the long haul, and I never take money out after I put it in.
This may be a question for another forum- but I would like to put some of that into our SEP IRA (self employed) but the IRS formula on how much you can put in is a bit complicated. Our CPA won't answer our questions unless we come with a check in hand, so wondering if anyone else is self employed and doesn't wait till end of tax year to make their contributions to SEP IRA? I don't want to over contribute and get a penalty but its hard to estimate. And yes, I need a new CPA.

User avatar
goodenyou
Posts: 2322
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: What to do with cash

Post by goodenyou » Thu Jul 30, 2020 5:31 pm

You are searching for the proverbial free lunch in investing. It doesn't exist. Risk free rates are not going to excite you. They don't excite anyone. As others have stated, pick an asset allocation that can withstand your storm and be done with it. That's the mantra around here.
Last edited by goodenyou on Thu Jul 30, 2020 5:35 pm, edited 1 time in total.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

User avatar
goodenyou
Posts: 2322
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: What to do with cash

Post by goodenyou » Thu Jul 30, 2020 5:34 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 5:22 pm
arcticpineapplecorp. wrote:
Thu Jul 30, 2020 3:28 pm
DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
what's there to be burned about? Even if you put the money in the market on the highest day this year before the market fell, you'd only be down 3% between that high point and yesterday's close:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

have you read about Bob, the world's worst market timer? If not read it here: https://awealthofcommonsense.com/2014/0 ... ket-timer/
Bob only bought at market peaks right before the market fell. He did that over and over again. I'll let you read the article to see how it turned out for Bob.

the morals of the story:
1. if the market keeps going up over time, it doesn't matter if you previously bought at a "high" price.
2. don't sell. capture the long term return of the market.

as for a plan being recommended, here's the place to start:
https://www.bogleheads.org/wiki/Investm ... _statement

Wow, that is literally the day we put a bunch of money into Vanguard funds. Good point- they are only down 3% now. So yes, this cash on hand is for retirement purposes. Thank you all for your honest, and brutal feedback on market timing. Its like when my mother in law told my spouse they gained weight and are getting fat- sometimes you just have to have people keep it real :shock: So yep, no more trying to market time and I'll just put the cash into my index funds. I am in for the long haul, and I never take money out after I put it in.
This may be a question for another forum- but I would like to put some of that into our SEP IRA (self employed) but the IRS formula on how much you can put in is a bit complicated. Our CPA won't answer our questions unless we come with a check in hand, so wondering if anyone else is self employed and doesn't wait till end of tax year to make their contributions to SEP IRA? I don't want to over contribute and get a penalty but its hard to estimate. And yes, I need a new CPA.
Use a solo 401(k) if you are self-employed. Most of the time it is superior to a SEP-IRA, in my opinion.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

User avatar
arcticpineapplecorp.
Posts: 5622
Joined: Tue Mar 06, 2012 9:22 pm

Re: What to do with cash

Post by arcticpineapplecorp. » Thu Jul 30, 2020 7:21 pm

goodenyou wrote:
Thu Jul 30, 2020 5:34 pm
DIYInvestor2020 wrote:
Thu Jul 30, 2020 5:22 pm
arcticpineapplecorp. wrote:
Thu Jul 30, 2020 3:28 pm
DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
what's there to be burned about? Even if you put the money in the market on the highest day this year before the market fell, you'd only be down 3% between that high point and yesterday's close:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

have you read about Bob, the world's worst market timer? If not read it here: https://awealthofcommonsense.com/2014/0 ... ket-timer/
Bob only bought at market peaks right before the market fell. He did that over and over again. I'll let you read the article to see how it turned out for Bob.

the morals of the story:
1. if the market keeps going up over time, it doesn't matter if you previously bought at a "high" price.
2. don't sell. capture the long term return of the market.

as for a plan being recommended, here's the place to start:
https://www.bogleheads.org/wiki/Investm ... _statement

Wow, that is literally the day we put a bunch of money into Vanguard funds. Good point- they are only down 3% now. So yes, this cash on hand is for retirement purposes. Thank you all for your honest, and brutal feedback on market timing. Its like when my mother in law told my spouse they gained weight and are getting fat- sometimes you just have to have people keep it real :shock: So yep, no more trying to market time and I'll just put the cash into my index funds. I am in for the long haul, and I never take money out after I put it in.
This may be a question for another forum- but I would like to put some of that into our SEP IRA (self employed) but the IRS formula on how much you can put in is a bit complicated. Our CPA won't answer our questions unless we come with a check in hand, so wondering if anyone else is self employed and doesn't wait till end of tax year to make their contributions to SEP IRA? I don't want to over contribute and get a penalty but its hard to estimate. And yes, I need a new CPA.
Use a solo 401(k) if you are self-employed. Most of the time it is superior to a SEP-IRA, in my opinion.
agree with this and for the OP you can read more about the differences (and possibly get help?) here:
https://investor.vanguard.com/small-bus ... comparison
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

User avatar
arcticpineapplecorp.
Posts: 5622
Joined: Tue Mar 06, 2012 9:22 pm

Re: What to do with cash

Post by arcticpineapplecorp. » Thu Jul 30, 2020 7:25 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time.
might want to read this article titled "3 mistakes investors make during election years":
https://www.capitalgroup.com/advisor/in ... -year.html
DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
I am looking to move the money over to my brokerage account (which is all index funds) at some point, I'd just prefer not to do it when we are trending upward and possibly will downturn again soon.
one other thing to cure you of the urge to market timing is to realize the answers to your market timing questions (this does not apply to rebalancing which is following a plan. remember to get an IPS at the link I provided):

Q: When should I buy?
A: When you have the money.

Q: When should I sell?
A: When you need the money.

lesson in market timing done.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

7eight9
Posts: 1225
Joined: Fri May 17, 2019 7:11 pm

Re: What to do with cash

Post by 7eight9 » Thu Jul 30, 2020 7:31 pm

arcticpineapplecorp. wrote:
Thu Jul 30, 2020 3:28 pm
DIYInvestor2020 wrote:
Thu Jul 30, 2020 2:44 pm
I understand I can't time the market but I'd rather be bit cautious and put cash in a savings account or something that doesn't fluctuate with the market so much until I feel comfortable putting it into my index funds.We put money into our Vanguard accounts right before Covid hit and the market tanked and so I'm still burnt by that.
what's there to be burned about? Even if you put the money in the market on the highest day this year before the market fell, you'd only be down 3% between that high point and yesterday's close:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

have you read about Bob, the world's worst market timer? If not read it here: https://awealthofcommonsense.com/2014/0 ... ket-timer/
Bob only bought at market peaks right before the market fell. He did that over and over again. I'll let you read the article to see how it turned out for Bob.

the morals of the story:
1. if the market keeps going up over time, it doesn't matter if you previously bought at a "high" price.
2. don't sell. capture the long term return of the market.

as for a plan being recommended, here's the place to start:
https://www.bogleheads.org/wiki/Investm ... _statement
I would like to read the story about Bob-san who bought the Nikkei back in December 1989. :happy
I guess it all could be much worse. | They could be warming up my hearse.

tibbitts
Posts: 11179
Joined: Tue Feb 27, 2007 6:50 pm

Re: What to do with cash

Post by tibbitts » Thu Jul 30, 2020 7:40 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time. I am looking to move the money over to my brokerage account (which is all index funds) at some point, I'd just prefer not to do it when we are trending upward and possibly will downturn again soon. I've looked into Vanguard's money market funds and they are super low rates of .11%. Online savings accounts are 1.1% at the highest. So, knowing that I want the flexibility to pull the money out of whatever I put it into for the next 3 months or so, what are ya'lls thoughts on what to put it into the interim? Are there any better ideas out there?

Thanks!!
You're already aware of all the alternatives and you're already aware that nobody here will support your attempt at market timing. Sometimes there are no good possibilities - this is one of those times.

hudson
Posts: 3065
Joined: Fri Apr 06, 2007 9:15 am

Re: What to do with cash

Post by hudson » Thu Jul 30, 2020 8:05 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. Online savings accounts are 1.1% at the highest.

So, knowing that I want the flexibility to pull the money out of whatever I put it into for the next 3 months or so,

what are ya'lls thoughts on what to put it into the interim? Are there any better ideas out there?

Thanks!!
If you might need the money in the next few months, the answer is a high yield savings account.
That's what I'm doing with my cash. I can't think of anything better.
You probably already know not to go over the FDIC limit?

User avatar
CyclingDuo
Posts: 3400
Joined: Fri Jan 06, 2017 9:07 am

Re: What to do with cash

Post by CyclingDuo » Thu Jul 30, 2020 8:52 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time.

Which presidents have delivered the best stock returns? So far Democrats are dominating.


https://www.forbes.com/sites/sergeikleb ... 113d59faaf
"Everywhere is within walking distance if you have the time." ~ Steven Wright

7eight9
Posts: 1225
Joined: Fri May 17, 2019 7:11 pm

Re: What to do with cash

Post by 7eight9 » Fri Jul 31, 2020 12:15 am

CyclingDuo wrote:
Thu Jul 30, 2020 8:52 pm
DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time.

Which presidents have delivered the best stock returns? So far Democrats are dominating.


https://www.forbes.com/sites/sergeikleb ... 113d59faaf
Correlation does not imply causation.

The Super Bowl Indicator is a superstition that says that the stock market's performance in a given year can be predicted based on the outcome of the Super Bowl of that year. It was "discovered" by Leonard Koppett in the '70s when he realized that it had never been wrong, until that point. This pseudo-macroeconomic concept states that if a team from the American Football Conference (AFC) wins, then it will be a bear market (or down market), but if a team from the National Football Conference (NFC) or a team that was in the NFL before the NFL/AFL merger wins, it will be a bull market (up market).

As of January 2020, the indicator has been correct 40 out of 53 times, as measured by the S&P 500 Index – a success rate of 75%.

https://en.wikipedia.org/wiki/Super_Bowl_indicator
I guess it all could be much worse. | They could be warming up my hearse.

invest4
Posts: 170
Joined: Wed Apr 24, 2019 2:19 am

Re: What to do with cash

Post by invest4 » Fri Jul 31, 2020 1:18 am

Consider taking advantage of some bank promotions. A little effort for a better than average return within a relatively short timeframe. If you have sufficient funds and married, you can usually double it up...one account for you and one for the Mrs

dbr
Posts: 33244
Joined: Sun Mar 04, 2007 9:50 am

Re: What to do with cash

Post by dbr » Fri Jul 31, 2020 7:48 am

It is not irrational under these conditions to spend the cash. In economics terms when savers are punished then spenders are rewarded. There is no payoff from postponing consumption. That might be especially true for more durable acquisitions such as home improvements or for using the opportunity to keep on schedule with maintenance items whether home, wardrobe, vehicles, etc.

User avatar
grobertj
Posts: 69
Joined: Fri May 15, 2020 1:02 pm
Location: Greensboro, NC

Re: What to do with cash

Post by grobertj » Fri Jul 31, 2020 7:56 pm

DIYInvestor2020 wrote:
Thu Jul 30, 2020 12:30 pm
Hi All,

I have cash that I'd like to put somewhere to accrue interest. I'm not sure I want to put it in my Vanguard brokerage account right now, as I think that the market will drop around election time. I am looking to move the money over to my brokerage account (which is all index funds) at some point, I'd just prefer not to do it when we are trending upward and possibly will downturn again soon. I've looked into Vanguard's money market funds and they are super low rates of .11%. Online savings accounts are 1.1% at the highest. So, knowing that I want the flexibility to pull the money out of whatever I put it into for the next 3 months or so, what are ya'lls thoughts on what to put it into the interim? Are there any better ideas out there?

Thanks!!
I use Ally Savings account. It pays 1% and has FDIC up to $250,000. It's easy to move from savings to checking. And checking pays up to 0.6% depending on the amount in checking. Good Luck!!
The only constant is CHANGE!!

Post Reply