Any advice on investing 200k, short term 1 yr?
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Any advice on investing 200k, short term 1 yr?
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!!
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!!
Re: Any advice on investing 200k, short term 1 yr?
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Re: Any advice on investing 200k, short term 1 yr?
CD. Maybe a 2-3 year CD with a removal penalty that would still maintain more value than a 1.5-2 year CD.
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Re: Any advice on investing 200k, short term 1 yr?
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.
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Re: Any advice on investing 200k, short term 1 yr?
Thanks for all the replies!!! I will try to diversify these money, CD, bond and market! Thanks!
Re: Any advice on investing 200k, short term 1 yr?
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/
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
- Bogle_Feet
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Re: Any advice on investing 200k, short term 1 yr?
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.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!!
http://investingadvicewatchdog.com/imag ... return.jpg
http://investingadvicewatchdog.com/imag ... 2-year.jpg
Re: Any advice on investing 200k, short term 1 yr?
thanks. I was looking for something like VCSH for my 2nd tier emergency fund.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.
Re: Any advice on investing 200k, short term 1 yr?
@Bogle_Feet - is there an ETF/MF you can suggest that implements this magic 72/28 formula?Bogle_Feet wrote: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.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!!
http://investingadvicewatchdog.com/imag ... return.jpg
http://investingadvicewatchdog.com/imag ... 2-year.jpg
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Re: Any advice on investing 200k, short term 1 yr?
The Vangaurd life strategy Income does close to this 80/20
https://personal.vanguard.com/us/funds/ ... IntExt=INT
https://personal.vanguard.com/us/funds/ ... IntExt=INT
Re: Any advice on investing 200k, short term 1 yr?
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?
- Bogle_Feet
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Re: Any advice on investing 200k, short term 1 yr?
A total bond market index fund like BND or AGGaqan wrote: @Bogle_Feet - is there an ETF/MF you can suggest that implements this magic 72/28 formula?
And an S&P 500 index fund like SPY
Re: Any advice on investing 200k, short term 1 yr?
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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Re: Any advice on investing 200k, short term 1 yr?
Thanks for the chart!! What about treasury bond? Can I put 72% all in treasury? Thanks!Bogle_Feet wrote: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.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!!
http://investingadvicewatchdog.com/imag ... return.jpg
http://investingadvicewatchdog.com/imag ... 2-year.jpg
Re: Any advice on investing 200k, short term 1 yr?
If your marginal tax rate is high enough, consider a tax-exempt bond fund.
Re: Any advice on investing 200k, short term 1 yr?
If you are confident in the 1-2 year range then I would strongly consider CDs or high yield savings account. I like the idea of Ally's 5 year CD at 2.25% and a 5 month withdrawal penalty. If you keep it for at least 9-10 months it will be better than a majority of those high yield 1%ish savings accounts. See this calculator to see how it works. https://www.depositaccounts.com/tools/e ... lator.aspx. It is a nice alternative without the interest rate risk or the equity risk.Tamarind wrote: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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