First time poster, so apologies if I trip on any rules.
54 yrs old.
Question: How to invest $100,000+/- now with Dow, etc. at all-time highs?
Currently enjoying (!) 1.7% yield at CapOne 360 FDIC savings. Have another $150,000 "cash", but that is periodically committed to hard-money lending at 12-13% yield, and I like a nice $50K cash "cushion"--I'm a child of child of depression and think worst-case scenario all the time. Risk-averse (although retirement funds are in VGI target date, etc. as they should be).
SO---Assuming all the other obvious better uses for the $ are already addressed and in good shape: good income @ $200K, moderate amount of mortgage debt at 3.5%, no car loan debt, no credit card debt, 1 child (17yo) 529 pretty well funded, 401k almost maxed every year, no other debt, etc, etc., where should cash be invested?
Concern is (and same concern it was when Dow was at 23000...go figure), with a say, 5-10 yr. time horizon, where to put $ for moderate return in light of what I am convinced is a long-overdue "correction"? Not looking to kill it, but I have this foreboding feeling of invest now, and watch a 20-40% correction occur right after. Given short-ish investment horizon, thoughts? Would be happy with a nice, relatively "safe" return of 5% over that time frame.
Just looking for thoughts/perspective. I keep sitting on the sidelines, and the markets keep killing it....which makes me even more nervous.
Step 2: Decide what funds are for retirement.
Step 3: Invest all retirement funds in accordance with your asset allocation.
You can swap the order of steps 1 and 2, but I suggest doing step 3 only after 1 and 2.
Most everyone would like 5% safe. Its time for you to read some of the threads and keep your money safe in cash. I recommend Taylor's 3 fund portfolio
Does that mean you're at least in your 90s?
[added: Oh never mind... I skipped over one "child of". ]
You should invest in current conditions as you would in any other conditions. Which sounds like relatively conservatively. Forget what is happening right now, it's not helpful in determining what will happen in 5-10 years or tomorrow.
BTW what happens in 5-10 years that you need 100k, or whatever sum you're asking about?
Sure, redeploy some into equities if you insist upon doing do, but I’d take it slow and easy. 2020 looks iffy because of what’s going on in China. In my view, the best approach is never to lurch from one strategy to another.
I don’t disagree with those who have reservations about dollar cost averaging in theory; but in practice, it can be a great way of avoiding making a big mistake, and I would suggest that not making that big mistake is more or less the first rule of investing. It’s related to my favorite short-form investment maxim: “Don’t Lose Money”
Sorry I made that up. Use https://investor.vanguard.com/mutual-fu ... estrategy/#/ to guide you.