How to invest $900K in 2018

Discussion in 'Economics' started by ftrexx1, Aug 1, 2018.

  1. Peter10

    Peter10

    don't try trading if you are not sure of profitability yet.
     
    #21     Aug 1, 2018
    ftrexx1 likes this.
  2. clacy

    clacy

    Stay well diversified.

    30% Total Stock Market (US)
    10% Emerging Market Stocks
    10% REIT (US)
    10% Gold
    20% US Long Term Treasuries
    20% US Short Term Treasuries

    Rebalance every year.

    That portfolio should give you a decent 8% CAGR to outpace inflation and taxes plus 2-3% real return.

    Stay away from an advisor. You will be paying for her retirement with your fees. Pick up a couple of books on asset allocation and open an account at Vanguard, Fido, etc that will let you trade most low cost index funds and ETF's free (or nearly free).

    This stuff is not rocket science. Much less difficult than trading. Why anyone would pay 1-2% in fees to some knucklehead who will just put you in a balanced mutual fund or two is beyond me.


    https://www.portfoliovisualizer.com...easury1=20&LongTreasury1=20&REIT1=10&Gold1=10
     
    Last edited: Aug 1, 2018
    #22     Aug 1, 2018
  3. dozu888

    dozu888

    I agree even though I don't have rentals :)

    yeah the USA is actually diverse enough that you can find many places with great rental yields... 900k sounds enough to generate a nice flow.
     
    #23     Aug 1, 2018
    ftrexx1 likes this.
  4. Savings accounts give 3% now. Do that and forget about trading.
     
    #24     Aug 1, 2018
    ftrexx1 and Peter10 like this.
  5. I though the OP not just want to save it, but to multiply.With 2-3 studios you can`t multiply $900K.With 2-3 studios you get like what?$3K per month at best.
     
    #25     Aug 1, 2018
    ftrexx1 likes this.
  6. dozu888

    dozu888

    lol so I was right in saying a financial advisor will suggest 40% in bonds.

    see the problem here - the 'book' is suggesting:

    - allocating a major portion in bonds, that are twice as expensive as stocks;
    - gold - I just made a post in a gold thread, currently the ultimate comfort trade, yet the most crowded by retail dumb money, doomed to crash;
    - emerging markets - in the age of MAGA we currently have massive repatriation and this will not likely to change thru the Trump administration... you don't want to throw good money to places suffering from outflows.

    so you see, a financial advisor really deserves a big LOL. they give you brain-dead basket of this and that, without much consideration of what is really going on.
     
    #26     Aug 1, 2018
    ftrexx1 and El OchoCinco like this.
  7. clacy

    clacy



    LTT, STT and Gold are nothing more than dry powder for you to rebalance into stocks and reduce drawdown. Different asset classes zig and zag stocks. Gold will get beat down about 2/3rds of the time, but takes off occasionally (See 2001-2011).

    For the OP it seems keeping his capital and growing it modestly is important (10 year time frame).
     
    #27     Aug 1, 2018
    ftrexx1 likes this.

  8. Well I did not see anywhere he said he wanted to multiply it so fast. Mid-40s with an IRA and working still for another 10 years. Depending on where OP lives that money can get you 4-5 properties but it is a slow build up. In 10-15 years rents rise with inflation as do the property values while your mortgage is about half paid off. I am not saying only do real estate but if he has his IRA already in the market and $900,000 in free cash I would put some of that at least in RE and put the rest diversified elsewhere. But not trade it if he needs it.
     
    #28     Aug 1, 2018
    ftrexx1 and fordewind like this.
  9. dozu888

    dozu888

    the only real dry powder is a checking account / CDs.

    I won't go into details here but be very careful with gold... the retail sentiment on this has 'crash' written all over it.

    LTT STT... how do you dry powder if the rates go up? nobody is talking about the 'Fed Model' nowadays, which had its glorious days in predicting price of stocks vs. bonds, with the principle that the 10 year should yield the same as the SP forward earning.... right now we are at 3% vs. 6%, so either bonds need to go up to 6, or stocks need to come down to 3, or they meet somewhere in the middle (most likely).

    that's why stocks are a screaming buy despite the conventional wisdom that the bull market is getting too old.
     
    #29     Aug 1, 2018
    ftrexx1 likes this.
  10. He came to trading forum with the $900k in cash.He surely doesn`t want to double bag it.:D
     
    #30     Aug 1, 2018
    ftrexx1 likes this.