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Have you looked at Series I bonds?
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Jan 23, 2022 00:57
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Raere posted:I'm looking to make higher returns on my general savings fund and am unsure where to put it. My retirement contributions are swell, I have money to cover 6+ months of expenses, etc and am otherwise in great financial shape. Money saved above the emergency fund and day to day expenses is sitting in a "high rate" bank account that earns 1% on balances up to $10k, and 0.1% above that. I have just over $10k in it, so the marginal interest rate for new deposits is pretty low. It's not money that I need, but it will could be used to fund a new car in a few years, or be part of a down payment if and when we move houses some day, or similar. As such my risk tolerance is moderate to low. It also has an uncertain time horizon because my car could get totaled tomorrow and I might decide I want to jump on a new car immediately, or I could get 5 more years out of it, for example. My expectation is that the money will be sitting for at least a few years, though. I Bonds is the correct answer if you can lock up the money for 1 year. Otherwise, high yield savings account (0.5% is easy enough to find online). If you want a little more risk for potentially a little higher return, you could consider something like a short term bond fund. I wouldn't assume it would necessarily outperform a savings account this coming year or two, though - the market has already priced in some rate hikes that havent happened yet, but not necessarily all the rate hikes that will happen.
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Jan 23, 2022 01:21
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Of course the other question is - what is your "general savings" for? Do you have a specific goal you are saving for, or are you just uncomfortable putting excess money in to long term goals like retirement?
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Jan 23, 2022 01:24
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Thanks for the I Bond recommendation. I knew about TIPS but I hadn't heard about this type. The calendar year limit is in line with the amounts of money I would be OK with locking up.drk posted:Of course the other question is - what is your "general savings" for? Do you have a specific goal you are saving for, or are you just uncomfortable putting excess money in to long term goals like retirement? Yeah basically, no specific goals, just saving money for future big ticket items with none in particular because I don't have a crystal ball as to what and when. I don't want to dump all of my excess earnings into retirement accounts because I do want the ability to put a large down payment on a new car or even buy outright, or have a bigger down payment if we want to move into a bigger house, as the two likeliest examples I can think of. $10k+ isn't a lot of capital to invest with interest rates as low as they are, but if I can make a few hundred bucks a year with minimal risk, why not? Raere fucked around with this message at 01:57 on Jan 23, 2022 |
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Jan 23, 2022 01:48
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I am one of the novices who had Target Date Funds in a rollover Trad IRA and was hit by the capital gains shenanigans at Vanguard. Would now be a good time to just convert that rollover Trad IRA to my Roth IRA? I'm already hit with the LTCG tax for 2021, and there probably aren't any gains for the past few weeks I'll have to worry about. Or am I missing something completely here (landing me very solidly in the novice category)? I was gonna go through the process of rolling my rollover Trad IRA into my employer's 401k this year since I'm now in backdoor Roth territory with our income, but if the capital gains thing opens an opportunity to just convert it to my Vanguard Roth IRA without the extra taxable stuff that goes along with the Trad -> Roth conversion, I'd rather do that. Edit: updated terminology used and added some more context. Edit 2: vvvvvv Thank you. I think I was confusing myself because the LTCG transaction was showing up on my transaction history. I will continue with my plan to rollover my rollover into my 401k to free up the Trad IRA for backdoor purposes. Good-Natured Filth fucked around with this message at 19:44 on Jan 24, 2022 |
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Jan 23, 2022 01:59
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Good-Natured Filth posted:I am one of the novices who had Target Date Funds in a taxable rollover IRA and was hit by the capital gains shenanigans at Vanguard. Would now be a good time to just convert that rollover Trad IRA to my Roth IRA? I'm already hit with the LTCG tax for 2021, and there probably aren't any gains for the past few weeks I'll have to worry about. Or am I missing something completely here (landing me very solidly in the novice category)? There are no "taxable" IRAs... a rollover IRA is "tax-deferred". The target date issue is irrelevant for both traditional/rollover and Roth IRAs, so you needn't worry about it.
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Jan 23, 2022 02:02
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Raere posted:Thanks for the I Bond recommendation. I knew about TIPS but I hadn't heard about this type. The calendar year limit is in line with the amounts of money I would be OK with locking up. Yeah, max out I Bonds first then, and if you still have money left over you can decide how much risk you are willing to take with it.
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Jan 23, 2022 02:09
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Whoops -- I had set up recurring purchases of I Bonds (end of each quarter nominally), but forgot the current rate is only good through April. Switching it up so it's all wrapped up by mid-March.
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Jan 23, 2022 03:55
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So I'm in the midst of rebalancing my portfolio... 1.) VEXPX I've had almost a year.... I made 10%, then it dropped maybe 11%. So its about a wash. But I've alsno noticed the fund chart has seen a very sharp drop in the last couple of months. Would it be worth it to take the capital gains tax hit to sell it (at loss), and reinvest elsewhere? (VTSAX? VTIAX? 2050 fund? The renewable fund, VFTAX?) 2.)What is causing this sudden drop for thiat particular fund. The grumblings on raising interest rates? Senor P. fucked around with this message at 23:02 on Jan 23, 2022 |
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Jan 23, 2022 22:53
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what is your investment strategy behind holding that fund
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Jan 23, 2022 23:09
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KYOON GRIFFEY JR posted:what is your investment strategy behind holding that fund But as I'm looing at it, some of these companies seem not so great...
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Jan 23, 2022 23:16
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You can have a diversified, balanced portfolio in as little as a single fund. More funds isn't necessarily better. For example, VEXPX is a small-cap growth fund. Can you explain why you wanted more small cap growth stocks in your portfolio? "I wanted to diversify" doesnt really make sense, since all of those stocks would also be in a total market fund like VTSAX.
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Jan 23, 2022 23:48
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Senor P. posted:My strategy, originally, was to diversify from 3-4 funds, to maybe 7 . what kind of diversity is that fund providing in terms of the companies it invests in versus your other funds, and how does that diversity support your objectives?
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Jan 24, 2022 00:01
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what other options are there for someone with zero desire to park money anywhere supporting most corporate things? for example all the ESG stuff I see is still Tesla, Facebook, Aetna, big banks, etc etc etc... no interest at all in having anything to do with that. I'm a fed at GS-12 in a stable area, probably 13 some day, right now I'm: - maxing out my TSP into the G fund (had other stuff for a while but eh it all seems like corporate stuff too, even the bonds). - maxing out an HSA - 10k i bonds a year as long as these rates continue other than i bonds and playing with some more high interest bank accounts (meh), is there anywhere similar to park money? TIPS or EE bonds instead of maxing the TSP into the G fund? no plan to buy a house anytime soon, as I have a good rental thing going on for the foreseeable future. Man_of_Teflon fucked around with this message at 06:23 on Jan 24, 2022 |
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Jan 24, 2022 06:15
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So corporate bad, government good? You can't even use a bank at this point. Guess it's time to buy war bonds.
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Jan 24, 2022 13:31
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have you heard the good word about decentralized finance, my friend? your other options are stock picking (assuming that you think at least some publicly traded companies are Good), munis and other government bonds, and the mattress
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Jan 24, 2022 13:41
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Another approach is an ETF that’ll use your shares to be an activist shareholder. https://etf.engine1.com/vote
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Jan 24, 2022 13:45
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Man_of_Teflon posted:what other options are there for someone with zero desire to park money anywhere supporting most corporate things? for example all the ESG stuff I see is still Tesla, Facebook, Aetna, big banks, etc etc etc... no interest at all in having anything to do with that. I appreciate the sentiment for real , but. There is no ethical consumption within capitalism. The economy is intrinsically tied to both said companies, plus the US Gov doing poo poo the US Gov does. The only real way that I can think of is either mattress under the bed, or invest only in specific companies from Denmark (actually Lego makes this not a bad idea). IMO, never hurts to look and try, but we’re all way too small fish to be able to cobble up a portfolio that is both ethical and has decent returns (mostly because they won’t make a specific fund just for one or a few people ).
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Jan 24, 2022 14:05
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Senor P. posted:Would it be worth it to take the capital gains tax hit to sell it (at loss), and reinvest elsewhere? If you sell something at a loss you don't have to pay taxes on that sale, and may even get to pay less taxes. So maybe now is a good time to move to a different fund if that's what you're wanting to do
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Jan 24, 2022 14:21
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doingitwrong posted:Another approach is an ETF that’ll use your shares to be an activist shareholder. https://etf.engine1.com/vote interesting option, I'll look into this area more. Duckman2008 posted:I appreciate the sentiment for real , but. investing in specific companies that I like is not a bad idea too, is it possible to do that from within IRAs? I don't remember being able to do that from Vanguard. and yeah, I used to write participation off and just dump everything into 2040 retirement funds, but now I am fine sacrificing some of the returns to have a healthier conscience. my hope is that putting away $30-35k a year, even with poorer rates, will still put me in a decent position to retire alongside social security and the FERS pension I'll get.
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Jan 24, 2022 15:06
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Individual stock picking isn't really this thread. But maybe direct indexing (minus any company you don't like, which might be a lot?) could be a way to go.
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Jan 24, 2022 15:08
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Ugh I deviated from my usual long term strategy and bought SPY for a few weeks, I’ve lost $500 and feel like garbage about it. Keep it in or pull it out? I dunno what else I would’ve done with this (non-emergency) savings besides hold cash, but SPY was probably a mistake This may be for the stock thread I’m just anxious about posting there.
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Jan 24, 2022 15:16
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Duckman2008 posted:IMO, never hurts to look and try, but we’re all way too small fish to be able to cobble up a portfolio that is both ethical and has decent returns (mostly because they won’t make a specific fund just for one or a few people ). Design a pie in M1 Finance and share it with anyone interested. Most direct method I've seen so far.
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Jan 24, 2022 15:19
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Inner Light posted:Ugh I deviated from my usual long term strategy and bought SPY for a few weeks, I’ve lost $500 and feel like garbage about it. Keep it in or pull it out? I don't think that's particular to SPY, you just had bad timing. Like when I deposited my 2022 Roth IRA contribution and put it in sensible index funds and it basically went POOF in a week. I'm debating parking my taxable investing account in bonds or cash for the time being, but timing these things always sucks.
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Jan 24, 2022 15:47
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Chad Sexington posted:I don't think that's particular to SPY, you just had bad timing. Like when I deposited my 2022 Roth IRA contribution and put it in sensible index funds and it basically went POOF in a week. Plus, any bond allocations are going to take a hit in this environment due to interest rate increases, especially if the Fed makes noise about doing more than 4 increases. The chances are that you're still going to be catching a falling knife no matter how you try to time it. Unless you're already rich or somehow have a good information advantage on certain sectors over everyone else, you're kind of stuck with trying to limit yourself to using money you can afford to lose and taking 5-10 year time horizon on everything.
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Jan 24, 2022 15:54
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Yikes, look like I could have maxed out the TLH for another year.
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Jan 24, 2022 16:03
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Inner Light posted:Ugh I deviated from my usual long term strategy and bought SPY for a few weeks, I’ve lost $500 and feel like garbage about it. Keep it in or pull it out? What's your usual long term strategy, and would that have somehow not lost value?
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Jan 24, 2022 16:25
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Super Dan posted:What's your usual long term strategy, and would that have somehow not lost value? I knew this would get called out because y’all are smart and I was bullshitting. Long term is all target date funds (I don’t have any significant taxable brokerage amounts) so yeah that’s going to be down too, I just am not going to touch that stuff. I want to touch the short term stuff because it’s fun and tempting, but the best return will probably come from being entirely hands off and letting it bleed, maybe even adding to my position, but that’s getting even more into timing. In retrospect of course the best position the past few weeks would have been cash.
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Jan 24, 2022 16:28
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investing retrospectively is highly lucrative but unfortunately impossible
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Jan 24, 2022 16:32
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If buying SPY or VOO is your definition of short term gambling, you haven't turned into a full-on speculative degenerate yet. Now playing with options or shorting them on the other hand... 
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Jan 24, 2022 16:37
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Bought some vtsax in taxable this morning. Hope it keeps getting cheaper.
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Jan 24, 2022 17:22
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Mu Zeta posted:Bought some vtsax in taxable this morning. Hope it keeps getting cheaper. I will join you in 8 days (on my auto buy). I am proud of my partner not freaking out as she bought 130K of VTSAX and VTIAX 2 fridays ago. She just keeps saying "You told me I could only look at it once a year and I don't want to touch this money of 25+ years". Good job babe, hold strong.
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Jan 24, 2022 17:32
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Eric Cantonese posted:If buying SPY or VOO is your definition of short term gambling, you haven't turned into a full-on speculative degenerate yet. Don't worry, I've gone down that road and been burned very badly before. When I meet people who can trade options and futures and significantly outperform SPY on a consistent basis, and there are a few on this forum, I am legitimately impressed in an envious sort of way that makes me want to try it again. But I know the vast majority will not outperform SPY consistently. There is a secret sauce and skill in technical analysis that you have to admit is real, otherwise consistently beating SPY would be impossible, at least that's my opinion at the moment. e: Going to be hilarious though if at end of 2022 I-Bonds will have outperformed SPY in the preceding 12 months, we shall see.
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Jan 24, 2022 17:54
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Inner Light posted:Don't worry, I've gone down that road and been burned very badly before. When I meet people who can trade options and futures and significantly outperform SPY on a consistent basis, and there are a few on this forum, I am legitimately impressed in an envious sort of way that makes me want to try it again. But I know the vast majority will not outperform SPY consistently. There is a secret sauce and skill in technical analysis that you have to admit is real, otherwise consistently beating SPY would be impossible, at least that's my opinion at the moment. In general, almost nobody keeps up consistent outperformance for multiple decades, and the few that do is about how many you'd expect due to luck. That's not to say anything about the specific people you're talking about, maybe they've got It, but just something to ponder.
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Jan 24, 2022 18:05
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Inner Light posted:There is a secret sauce and skill in technical analysis that you have to admit is real, Technical analysis is pseudoscience bullshit for day traders.
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Jan 24, 2022 18:08
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Mu Zeta posted:Bought some vtsax in taxable this morning. Hope it keeps getting cheaper.
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Jan 24, 2022 18:15
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I consistently beat the house at blackjack, is something degenerate gamblers say.
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Jan 24, 2022 18:16
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TA is a mix of pseudoscience bullshit, and very normal things anyone here would agree are fine, like setting stop limits and using moving averages to notice longer-term trends in market sentiment. But usually when someone criticizes TA, they mean the batman-shaped lines on charts tea-reading that is far too prevalant and is total horseshit, and usually when someone in the stock picking thread defends TA they mean they don't buy or sell stocks or options completely blind, they actually look at a chart first.
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Jan 24, 2022 18:18
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Chad Sexington posted:I consistently beat the house at blackjack, is something degenerate gamblers say. If you can count cards, you WILL consistently beat the house. But then the house will kick you out and never let you back in. I'm sure there's an analogy in there somewhere.
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Jan 24, 2022 18:28
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Chad Sexington posted:I consistently beat the house at blackjack, is something degenerate gamblers say. Yeah, its this. People love to crow about how much money they made, but get very quiet when it comes to losses. They have to downplay or dismiss the losses in their head in order to justify continuing the risky behavior.
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Jan 24, 2022 18:32
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