Hello, I would love to hear the opinion of you guys about how to invest $900K today. Let say I'm in my mid 40s, one child on the way, no propriety or homes, 110K in a traditional IRA and an health condition that it might allows to let me work for no more than 10 years. I have tried briefly with day-trading and swing trading as side of my job, but results were definitely not encouraging and don't want to burn more cash. I asked a financial advisor but her annual fee would be way more than the annual health insurance premium or the kindergarten annual fee!! How you guys would employ the cash I have?....Any suggestions would be really appreciated.
have some emergency funds in hand for rainy days, and rest of it into QQQ or XLK. your problem is not unique... too much cash on the sidelines right now.. and the conventional wisdom among the retail dumb money is that the 10 year old bull market will end soon. I have posted many times... retail sentiment is negative on stocks.. they have piled into gold and bitcoin..they have piled into bonds, make bonds twice as expensive as stocks. SP forward earning yield is 6% ! find me another asset class with 6%.. you wont be able to. not to mention QQQ outperforms the SPY... or you can just buy FAAMG. Actually, the conventional wisdom maybe correct, the bull market is getting old, the one from 2009... but we are in a new bull, driven by technology.. a new bull market doesn't need to start from a bear. if you have 10 years horizon, the expected return from QQQ is about 240%... the chance of coming out in the red is minimal. However, I do want to caution you.... the above is only an advice on the product. I don't know your risk tolerance... can you sleep well if stocks drop 50%? can you not panic and sell out? you need to think VERY CAREFULLY before you answer this question. Most people think they can sleep well, only when the real drop comes and they can't stomach even a 25% drop. so with everything considered... the most stock you can buy is the amount at which a 50% drop wont scare you out... then put the rest in bank CDs. good luck
How to invest $900K in 2018 How you invest that amount of money will depend on various factors including and not limited to your risk tolerance, your purpose for the funds, your financial goals, your age, your current financial profile and etc.. That is a question for your financial advisors which none of us here are. You should seek out a reputable and prudent financial planner/advisor to help you invest this amount. Shop around for one with more reasonable fee. Good ones are worth their fees. Good luck!
true - many more factors than the risk tolerance.. but the tolerance is the biggest factor... without further input from OP, let's assuming the goal is to get the max return for the 10 year period. financial advisor - there are the good the bad and the ugly... like in any profession, only 25% of them might know what they are talking about.. too much conventional wisdom in that industry... their goal is to make fees and not get fired, instead of to help the clients. therefore as long as they play by the 'books', who cares about the clients real interest... and the 'book' says allocate 60% in stocks, and 40% in bonds, because the client is 40 years ago.. that is exactly the kind of garbage that has pushed bonds to twice as expensive as stocks.. comparing 10 year yield to the SP forward earning. of course taking advice from the internet you probably have a success rate even less than 25%.... but on the other hand, having these debates may help the OP in deciding what advice to use. so yeah... good luck... in this situation luck is a really big factor
If you are asking about your retirement money then putting it all in the stock market at your age is akin to gambling. Find passive income flows such as real estate rental properties. Depending on where you live for $800,000 you can buy several studio apartments and rent them out and be cash positive from day 1. If not you can use mortgage financing and invest in several properties worth over $2 million and get a property management company. The skill is in finding the right properties in good areas with regular demand. This way in addition to rental income your principle grows as the properties maintain value or hopefully grow while tenants pay off your mortgage. This requires a lot of time and effort at first but is worth it. I am now at 4 properties and looking for the 5th but it is not a quick flip game anymore. Long term buy and hold and in 20 years with the money you have now you will have 5- 6 properties with little to no debt, positive cash flow and increased property value. You can sell 1 if needed for large influx of cash or just keep generating more. It is not as easy as it sounds and I have been at it for 20 years myself so I have some experience. But 20 years later you accumulate a lot of equity and cash flow. Put some of your cash flow in the stock market to grow but long term wealth has to be diversified.