In order of duration and default risk exposure, very very very low - cash very very low- - money market very low - short term government bonds low - short term investment grade corporate bonds It is possible that money market funds are not available options anymore. Nonetheless, I would call and ask for an option to go to cash without immediately generating plan closing fees. Tell them you want to re-think your allocation. However, You may have to eat additional costs of exiting each fund and STILL stay within "the plan". At least, you have time to think things over..which you have started already. BTW if the market goes up, it would also be improper to agonize over missed gains.
Yes. I passed on that risk back to the OP by making an over-generalization in my first sentence. By "fixed income component on your personal balance sheet", I mean everything. It could be his allowance from his mother or his monthly skim off a casino. Cash flow statement is the more appropriate FS, but I hope both of you get my meaning.
I would sell it all and put the 100k in OTM S&P calls.... And take the wifey out for dinner for the 3k leftover... Can't go wrong... wifey happy plus you have great upside potential...
No crystal ball, but knowledge on reading charts. Plus, my long term approach is selling new highs, so I am often counter to over all markets.
Your advisor can't be trusted, he wanted you to lever up and buy funds that would benefit them? Sounds like an "agency" problem to me. Get a fiduciary or buy books on investing and do it your own
i think ur adviser did a half his job, borrowing at low rates can be attractive to fund investments if u know the odds are high and personally if u knew ur self what ur doing where the loss is minimized, lastly how much of ur income does the 3500 a year represent, cuz sometimes the best investments are not available immediately, so borrowing at a low rate might be good if u know to invest it at a higher rate and u might have to absorb the interest for few years if that opportunity is not, the big question is whats ur investments experience now? is it still limited or is it much better????? if limited i would close out the investment right away, cuz what would happen if its at 80k instead of a 100?? can u afford the 20k loss???? how did u feel when it was down to 88k???? did it shake u or is ur networth/income larger where it wasnt the issue, u must take these factors into account,,, borrowing at 3.5% is awesome which not everyone has the access to it,,, but only if there is a good use to it with great confidence and limits to losing (as in whats worse case scenario),,,, i used to do something similar to this back in the days borrow at lower rate to invest at higher but my experience was limited back then and i got hammered, the only thing that kept me afloat is the fact my income from my current job can dwarf the amounts i took and i recovered,,, but in terms of borrow low invest high i miserably failed, at least back then there is been times i also borrowed to invest but when i didnt find anything good use for it and i paid back the money and ended up losing on the interest for the 7 months i had the money,,, point is dont force the trade(investment)
Everyone can 'borrow' at libor by buying futures contracts without having to put any money down, only collateral, which can be other securities