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Ask HN: I have $450K cash, what should I do to maximize my return?

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Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#291

Post by Sschellbach »

overcast wrote: post #141
WrtCdEvrydy wrote: post #66

Earlier quoted context omitted.

Not really, as far as four months ago, Bitcoin was at 8k per coin... today it's around 11k per coin, it's about 30ish percent profit. Edit: Unless you bought 11k+ and sold below that point, there's no chance you lost on Bitcoin.

So? You could have dumped money into ANY of the big tech four months ago and been up WAY more than 30%. The S&P500 index alone is up more than 30% since the crash. Bitcoin peaked at 20k in December of 2017, and dropped to $3100 exactly a year later. Seems like anyone investing at the top, and there were LOTS of inexperienced mom and pops doing so, are down at minimum 50%. Without any type of dividends or stock in a r…

Do you actually think there was a lot of volume for Bitcoin at 20k? A handful of people even bought Bitcoin at the 20k level. It was only trading at prices that high for a few hours

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#293

Post by sanguy »

Right now is a challenging time to invest.

In general I would lean towards well managed active funds versus pure index funds. The markets are in a time that a good active manager can get you some added return.

With that said I'd probably lean towards something like the all-weather portfolio. See:

https://www.iwillteachyoutoberich.com/blog/all-weather-portf...

Note: this portfolio does cost you some potential upside in good market conditions but with less down risk.

Disclaimer: I am a big fan of Ray Dalio who came up with the all weather portfolio. I have 7 figures in such a portfolio. For the equity and bond portion I use Vanguard active funds.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#296

Post by reducesuffering »

ummonk wrote: post #162
stu2b50 wrote: post #147

Earlier quoted context omitted.

You're conflating index funds with S&P 500 Index funds, though. You can buy an index fund with _zero_ tech stocks. You can buy something like VINIX which has considerably less weight on the BigN tech firms.

If the market is efficient, why is (infrequent) stock picking so much worse than buying an index fund?

Psychological reasons. Retail traders performance chase, selling things when they have temporary (multi-year) losses and buy when they have temporary high gains. It's incredible how strong it is even for people who are somewhat knowledgeable about finance like Bogleheads. It's also been studied by Jack Bogle himself. There was a famous study comparing Value vs. Growth stocks he noted where retail traders who invested based off either ended up doing worse than just holding both because in aggregate they kept buying the one that recently did well and then selling it when it had done poor. Buy high, sell low.

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#297

Post by fwsgonzo »

mancerayder wrote: post #180
cheeze wrote: post #176

Earlier quoted context omitted.

If you're looking at YTD% on an index fund during a pandemic, you have the wrong mindset IMO

That's a matter of opinion, wrong mindset. I bought gold miners that ballooned, and swing traded pharma. This turned into money that I can use to buy things like computers and furniture. Or buy even more of the fabled broad index funds.

Which platform do you use, if you don't mind me asking?

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#299

Post by gruez »

betterunix2 wrote: post #242
WA wrote: post #178

Earlier quoted context omitted.

Dividends are left-pocket right-pocket. Dividends can help you psychologically, but in a way, it’s like forced selling once per year or per quarter. Edit: if it helps you to invest, by all means, do it. But since dividends are mostly psychological, there is no point in limiting your stock picks to companies with a high dividend.

On the other hand, companies with long histories of sustained and rising dividend payments also tend to outperform the S&P500 in terms of total return (dividends + capital gains), and do so with lower volatility. Reasons include having a business that is profitable and stable enough to sustain such payouts and a management culture that appropriately balances shareholder interest (by paying dividend) against the long-…

>On the other hand, companies with long histories of sustained and rising dividend payments also tend to outperform the S&P500 in terms of total return (dividends + capital gains), and do so with lower volatility.

Source?

Re: Ask HN: I have $450K cash, what should I do to maximize my return?

#300

Post by sokoloff »

MuffinFlavored wrote: post #216
jordanmarshall wrote: post #51

Just skimming some of the replies here makes me think you will get better advice on the Bogleheads forum [1]. Despite the minimalist appearance it is actually a great place to get sensible financial advice. I would start with the wiki page on managing a windfall [2], then search through older replies to similar questions. This kind of question gets asked there a lot, so there should be some recent threads. [1] https:…

Why isn't the tl;dr: 1. put 6 months of expenses in a high-yield savings account that is easily accessible + liquid in case of emergencies 2. max out tax-advantaged accounts. $19.5k/yr 401k + $6k/yr IRA. allocate into anything similar to a target date retirement fund with healthy exposure to US total market/probably light bonds depending on age 3. put the rest in a brokerage account, allocated in the same things your…

Given the current tax rates vs reasonably projected future tax rates, I'd be quite inclined to put money into a Roth 401(k)/IRA than a traditional. I'd rather lock in today's rates than take exposure to 2040, 2050, or 2060 rates.
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