If you put your son's college fund into the best high-yield FDIC insured bank account making 3% (current Marcus rate) you're fucking him over. At least put it in an index fund. If number stops going up he won't have to worry about paying for college because American capitalism will finally have been destroyed.
lmao 5% would be positively restrained. these frauds never promise less than 20% guaranteed. they're determined to make Bernie Madoff look conservative.
Actually, BlockFi, Celsius, etc. promised like 9-13%. Higher returns are available but are more up-front about the risk, these products pitched themselves as being safe as checking accounts which is obviously not true. I like this site but it frustrates me when it intersects with stuff I know a lot about.
No. Cash should be a tiny fraction of your portfolio, because (1) opportunity cost of not getting any return at all (2) it's actively melting away from inflation. High-yield savings accounts are nice but don't beat inflation.
USDC is worth evaluating because many risky investments are denominated in USDC.
Liquidity has its own value, particularly when prices are falling. And the projections for the next year's worth of stock performance is pretty grim. Idk if I'd be rushing out to buy in right now, given the uncertainty and the rising Fed interest rates. Also... rising rates mean savings accounts actually aren't the worst place to stash your money atm.
USDC is worth evaluating
Consider investing in ASAB: All stablecoins are bad.
It sucks to have to sell investments during a downturn, but they're still liquid. It's not sound advice to keep more cash than is necessary for operational reasons. At least buy some bonds or something if you're bearish.
High-yield savings accounts are nice but don’t beat inflation.
rising rates mean savings accounts actually aren’t the worst place to stash your money atm.
They're better than like, a checking account or a mattress. Marcus is 3% rn, which seems great until you remember that inflation is way higher than that.
Part of the problem with a down market is that there aren't a lot of great places to stash cash. So, yes, you're going to have a high risk of some kind of loss everywhere.
Inflation sucks, but a cash loss of 4-5% a year is still better than losing 10% on some equity or index fund.
Unless you are a very good trader (I'm not) you're gonna miss the timing on when to put money back in, and probably come out worse overall. My mindset is conventional /r/personalfinance one: if you don't need it, don't touch it, leave it in VOO or whatever til nearing retirement.
Its not a matter of timing so much as value. Right now P/E on most stocks is still kinda high. Although, I guess under 20 isn't crazy.
I just wouldn't be in a rush to turn free cash into equities under these conditions. If you're already in, I agree its not a great time to pull out either. But telling someone with a bunch of free cash to buy up equities in this market seems like bad advice.
If you're doing more than maxing out Roth/401k, you're taking a gamble.
Yeah idk. Watching Tesla/GME/etc fluctuate based on vibes has kind of destroyed what little faith I had in value-based investing. If someone has a lump sum of cash I'd say DCA in to the highest yield thing that fits your risk tolerance. My own is pretty high*, I'm decades from retirement, but I think for most people that's probably something riskier than a savings account.
*hence doing stablecoin stuff. High platform risks in exchange for no price risk; I happen to be good at evaluating platform risk and hopeless at speculating.
Watching Tesla/GME/etc fluctuate based on vibes has kind of destroyed what little faith I had in value-based investing.
Tesla was a growth stock predicted on the theory that it could rapidly gobble up the domestic car market. Also, heavily predicated on revenue from government subsidies.
GME was pure memes. A total sucker's bet. It just demonstrated what an internet full of dorks could do to the price of an equity with low trade volume.
These were both exceptions that outperformed during a historic bull market. And they're both crashing back down to earth.
If someone has a lump sum of cash I’d say DCA in to the highest yield thing that fits your risk tolerance.
Right. And, ideally, in something big and safe like Berkshire or J&J or just the S&P index if you're feeling lazy.
I happen to be good at evaluating platform risk
I guess time will tell on that one. My friend lost a boatload on Terra/Luna with that attitude.
Keep your money in an FDIC insured bank account
deleted by creator
If you put your son's college fund into the best high-yield FDIC insured bank account making 3% (current Marcus rate) you're fucking him over. At least put it in an index fund. If number stops going up he won't have to worry about paying for college because American capitalism will finally have been destroyed.
lmao 5% would be positively restrained. these frauds never promise less than 20% guaranteed. they're determined to make Bernie Madoff look conservative.
Actually, BlockFi, Celsius, etc. promised like 9-13%. Higher returns are available but are more up-front about the risk, these products pitched themselves as being safe as checking accounts which is obviously not true. I like this site but it frustrates me when it intersects with stuff I know a lot about.
aww shit, the obvious scams only promised ponzi scheme level returns. they're so reasonable.
Not defending them, just pointing out you don't seem to know basic facts about this sector.
nah, I got a good feeling about this horse, baby! she's gonna win us back the farm!
No. Cash should be a tiny fraction of your portfolio, because (1) opportunity cost of not getting any return at all (2) it's actively melting away from inflation. High-yield savings accounts are nice but don't beat inflation.
USDC is worth evaluating because many risky investments are denominated in USDC.
Liquidity has its own value, particularly when prices are falling. And the projections for the next year's worth of stock performance is pretty grim. Idk if I'd be rushing out to buy in right now, given the uncertainty and the rising Fed interest rates. Also... rising rates mean savings accounts actually aren't the worst place to stash your money atm.
Consider investing in ASAB: All stablecoins are bad.
It sucks to have to sell investments during a downturn, but they're still liquid. It's not sound advice to keep more cash than is necessary for operational reasons. At least buy some bonds or something if you're bearish.
They're better than like, a checking account or a mattress. Marcus is 3% rn, which seems great until you remember that inflation is way higher than that.
Part of the problem with a down market is that there aren't a lot of great places to stash cash. So, yes, you're going to have a high risk of some kind of loss everywhere.
Inflation sucks, but a cash loss of 4-5% a year is still better than losing 10% on some equity or index fund.
Unless you are a very good trader (I'm not) you're gonna miss the timing on when to put money back in, and probably come out worse overall. My mindset is conventional /r/personalfinance one: if you don't need it, don't touch it, leave it in VOO or whatever til nearing retirement.
Its not a matter of timing so much as value. Right now P/E on most stocks is still kinda high. Although, I guess under 20 isn't crazy.
I just wouldn't be in a rush to turn free cash into equities under these conditions. If you're already in, I agree its not a great time to pull out either. But telling someone with a bunch of free cash to buy up equities in this market seems like bad advice.
If you're doing more than maxing out Roth/401k, you're taking a gamble.
Yeah idk. Watching Tesla/GME/etc fluctuate based on vibes has kind of destroyed what little faith I had in value-based investing. If someone has a lump sum of cash I'd say DCA in to the highest yield thing that fits your risk tolerance. My own is pretty high*, I'm decades from retirement, but I think for most people that's probably something riskier than a savings account.
*hence doing stablecoin stuff. High platform risks in exchange for no price risk; I happen to be good at evaluating platform risk and hopeless at speculating.
Tesla was a growth stock predicted on the theory that it could rapidly gobble up the domestic car market. Also, heavily predicated on revenue from government subsidies.
GME was pure memes. A total sucker's bet. It just demonstrated what an internet full of dorks could do to the price of an equity with low trade volume.
These were both exceptions that outperformed during a historic bull market. And they're both crashing back down to earth.
Right. And, ideally, in something big and safe like Berkshire or J&J or just the S&P index if you're feeling lazy.
I guess time will tell on that one. My friend lost a boatload on Terra/Luna with that attitude.