Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
My only harp here with all the cash dwellers is: Provided that’s your established style I think it’s a really great way to go and locking in the highest available rates is a solid decision. Where I’d have a concern is with former equity investors who took a drubbing in 2022 (down 10-20%) locking in a substantial loss by selling equities near their lows in exchange for cash. Ernie Harrell always said you should “Dance with the one that brung ya”. So, provided someone had a long standing, effective and appropriate allocation model having broad exposure among asset types and investment styles before things went sour, it’s hard to see why they should switch partners in the middle of the dance, ditch their former approach and move entirely into cash.
There is no certainty to any of this of course. Interest rates rise and fall. So do stocks, commodities, real estate prices, currencies etc.
@Hank. Do you mean Ernie Harwell of the esteemed duo george kell and Ernie harwell?
That’s the worst you can fling at me?
Ernie was a Detroit and baseball institution. There’s probably a book somewhere listing all his witty & colorful metaphors. The one I used dealt with a manager’s predisposition to stay with the starting pitcher in tight situations late in the game rather than calling in a reliever when his team is ahead. Bringing in a reliever at that point would be akin to ditching the partner who’d brought you to the dance. I don’t think it was original with Ernie. But fondly remembered nonetheless.
@LarryB. Van Patrick is the first Detroit sports announcer I can remember. That must have been back in the late 50s or early 60s? Lions football I think. And a good announcer.
The other I have no idea. But Lafayette would seem to be in Indiana. So maybe something to do with Perdue or Norte Dame football?
Do you remember when the Tigers fired Ernie Harwell? I can remember right where I was standing when the news broke. Everyone was in disbelief.
Is Lafayette vs American a battle of 2 Detroit Coney Island Hot Dog stands? Purdue is in West Lafayette and Notre Dame is located just north of South Bend.
@ carew388. You nailed it but we Detroiters would NEVER think of those places as hot dog stands. You go to your favorite for two with everything. I am a Lafayette guy.
@Hank. Van Patrick was the first Detroit sports announcer I can remember also. I remember he did both the Lions and Tigers but I might be wrong. I sorta recall he got fired for being closely associated with one brand of beer and another brand became the new sponsor. I left Detroit in 1973 and I guess Ernie Harwell still had years to go.
Being retired, I like the CBLDX idea in my IRA and don't need to add to growth. Since it would go into a taxable account, it would be put into MM for now and enjoy the interest for a while. Possibly 50% into NVHAX.
My only harp here with all the cash dwellers is: Provided that’s your established style I think it’s a really great way to go and locking in the highest available rates is a solid decision. Where I’d have a concern is with former equity investors who took a drubbing in 2022 (down 10-20%) locking in a substantial loss by selling equities near their lows in exchange for cash. Ernie Harrell always said you should “Dance with the one that brung ya”. So, provided someone had a long standing, effective and appropriate allocation model having broad exposure among asset types and investment styles before things went sour, it’s hard to see why they should switch partners in the middle of the dance, ditch their former approach and move entirely into cash.
There is no certainty to any of this of course. Interest rates rise and fall. So d stocks, commodities, real estate prices, currencies etc.
I am struggling a bit, to determine if this thread is really about a "serious" question to determine how one would "invest" a $100k, compared to how to "spend" a $100k. You can spend a $100k very easily these days on Boats, Cars, Hot Dogs, or a thousand other things. Everytime my wife and I have a $100k CD mature, my dear wife talks about "spending" options, most notably plastic surgery so she will look younger, or help one/both of our adult children better cope with their financial needs. For 2 elderly adults in their 70s, investing vs spending, is still very real, but we are still facing an unpredicatable personal future, of not knowing how our existing assets will be needed, to live out the remainder of our life, without "burdening" our adult children, or to alloow us to have some pleasurable experiences to make old age as good as possible.
As you have noted above, when it comes to investing, we have already made some "debatable" choices. Equities were a big part of our investing decisions until we retired. Then we chose to go with less risky options, where our lifelong accumulations would not be in jeopardy, during this geriatric period of life without employment income, life without a company pension, and life with increasing health risks and some materialistic realities associated with our materialistic assests of homes, cars, vacations, etc. At this point in time, we have chosen a safer path with CDs, which will offer some guaranteed income, not with investing risks associated with bonds or equities, which have their own unique risks.
This thread has investors/posters, in all phases of life, with varying conditions, unique to themselves. One persons decisions, is one persons decisions, and very likely will be based on conditions, that are different from other persons decisions. And my wife, who knows next to nothing about investing, is an equal partner in life with me, in making those decisons!
@dtconroe - Thanks for the rebuttal. I never give specific recommendations or even share my own specific investments (unless they come up in the context of a particular fund’s discussion). I hope that does not exclude me from making broader observations about investing on this thread started by @Baseball_Fan. I do think it’s for the person who initiates a thread to set the tone and pull people back into line who fall out of step. BF’s opening line - “For kicks and giggles and ideas ” leaves me to believe he is willing to allow a wide latitude in thread content and some occasional humor or straying afield.
What would I do with another $100,000? Tax considerations might have some bearing on how it is invested. But, in general, I’d simply add it to my existing diversified portfolio. That’s what I’ve always done with windfalls. I’m about 49% in equities, 30% in various fixed income products, 15% cash equivalents and 5+% precious metals. That’s mainly through mutual funds, ETF’s and CEFs. Also own 2 individual stocks @ 5% of portfolio each.
I attempted to support the case for going all to cash and intended to praise those who invest that way. In no way would I discourage such an investment approach. The one proviso is that I think it is unwise to move back and forth between completely different approaches based on the latest 6-months’ market action. Selling risk assets low and than rebuying them higher a year out when markets have “recovered” is not a viable long term plan ISTM. As you have long been known here for your expertise in and affinity for fixed income investing, I don’t understand the umbrage - though I’ll agree my comments were a bit outside the scope of @Baseball_Fan’s hypothetical question.
The boat? I thought it was funny. I’d seen it in the water while on a walk the day before and the name on the stern “Secret Formula” struck me as relevant to investing. I’ll stop there! But if @Baseball_Fan wishes the photo to be removed, I’ll be happy to oblige him.
hank, I was not criticizing you, or have any upset with you. For me the thread title was, "How Would You Invest $100,000 right now". I confess I don't know what was meant by the phrase of "kicks, giggles, and ideas", so I just focused on how I would invest $100k right now.
From the start I said that without goals age and more, no way to answer this. In most cases, another $100K isn't big enough to change someone portfolio asset allocation.
A lot more interesting is what would you do with a new $500K to a million. My answer, I wouldn't change a thing with my portfolio.
@FD1000 - I'm going to go out on a limb here and suggest that for most people who visit this site $100K 'IS' a substantial sum of money. Of course I have little to base that on as I have no data to support it. I don't know the financial sums MFO visitors possess. The remainder of your comment is fine.
From the start I said that without goals age and more, no way to answer this. [snip]
The OP asked where you would invest $100K right now - there was no additional criteria. Of course, answers will vary depending on an investor's own circumstances. You and I would invest $100K much differently and that's perfectly fine.
All valid points.... when I posted I was looking for how some would allocate their investments, how cautious they would be right now, would they hedge, looking for some creative ideas...the expensive watches was interesting and the stock of a Japanese auto parts mfg was as well....
By kicks and giggles I was recognizing that most everyone has a different viewpoint and no one should take any posting as a recommendation or advice, maybe learn of a new fund that piques an interest. Sometimes I believe we take things a little to seriously on this board whereas if we were sitting in a backyard with a few soda pops instead of getting our dander up with some postings we'd be laughing and enjoying our different perspectives.
Btw, my perspective is that even if you have a $10 million net worth, a hundred grand is still a large sum of monies..... I'm fairly certain we would all agree with that
Great discussion. Like FD, I focus on the total portfolio.. Sure, it can be modified as various circumstances change. But I’ve never thought the amount invested mattered much if you have a model portfolio in place.
So whether I had $50,000, $500,000 or $1,000,000 + to invest I’d go with the model. The raw totals might be different, but on a pie-chart a 5% investment in GM displays as 5% regardless of dollar value. And your portfolio should react pretty much the same way day to day..
There would be intervening factors:
- With very small amounts it may be hard to stay as diversified as your model dictates due to fund minimums, etc
- With larger sums you save on expenses and should earn a better return.
- Taxation becomes a real issue if you are currently mainly in IRA / Tax deferred investments and you suddenly come into money that isn’t sheltered. But there are various ways to deal with that.
- Buffet has commented that it’s much harder to invest very large sums. He claims he could earn a much greater return investing a small sum. One reason is that with a vast sum invested every buy or sell order you enter tends to drive prices in the opposite direction than you want.
Does it matter if $100k is a substantial sum or not? The question was simply "how would YOU invest it NOW". A very simple English language question. The question wasn't how would you invest it for someone else. If you don't know and understand your investing goals or portfolio, I guess it's a trick question.
Surely, we all at least know our age Honestly, I saw this as just a fun exercise to throw out different ideas or thoughts. Sounds like most took it that way.
I would put it all in PSLV. Sprott Physical Silver or physical silver if I had a place to store it. BRICS will crash the USD eventually, manipulation of metals will end. Silver price will rise once big banks can no longer short gold and silver. Also, could put it all in XRP (ISO20022 coin) probably will do better than silver. Just another opinion.
Whatever happened to the good old days when you could go to an investing forum and see 50 new post a day? I checked out for a couple of years and when I came back everyone left.
Does it matter if $100k is a substantial sum or not? The question was simply "how would YOU invest it NOW". A very simple English language question.
That’s a bit harsh towards some of my colleagues here. But, as you like it. Re: “NOW” - Be aware BBF posted on Labor Day. Perhaps unaware U.S. markets were closed? I’ve substituted the earliest possible date / time to invest designated sum.
Date: Tuesday, September 5, 2023
Time: 9:30 AM EDT
Amount:$100,000.00
How I’d invest it “NOW” …
- U.S. Equities: $31,853.65
- Diverse Fixed Income (hedged, market neutral, global): $30,997.63
Surely, we all at least know our age Honestly, I saw this as just a fun exercise to throw out different ideas or thoughts. Sounds like most took it that way.
We need some fun once in a while. And thinking about having an extra $100k all of a sudden is fun.
Well, again, it depends on someone's age, goals, and risk. I know the following several investors 1) 90+% in Munis: This guy sold his company in the 90s for several million and since then he is in 90+% muni, the rest in stocks. 2) 90+% in CD: This guy has "only" one million 3) 85% in stocks: This guy has over 10 million and has been invested like this for decades and is now at retirement. 4) This guy shorted the market, but only at 2-3%. 5) This couple in their 80s invested it all in stocks since retirement in their early 60s. Why? because their pension + SS is over $25K per month. 6) Several investors in their 30s are all at high% in stocks
As you can see numbers 3,5 and 6 are invested highly in stocks but are different. Each of the above has a unique case.
Without the right context(age, goals, and risk), you can't learn much in depth. Even that isn't enough. Suppose someone says, I like treasuries right now. Well, what % do you own? is it 5% or 20%? The % you committed to anything you posted you own makes a difference.
$100K out of 10 mill is only 1%. I doubt this investor would make any significant change to her portfolio. A $100K to someone without saving matters a lot more than the 10 mill.
Lastly, when I read dtconroe's post I got the context pretty well.
I trade only bond funds because of their persistency of trend combined with their lack of volatility. There are exceptions, but since 2000 there has always been a bond category that has beaten the S@P annually. Of course those exceptions are pretty glaring ala 2013, 2017, 2019, 2021, and so far this year. So with an extra $100,000 would just add it to the bond category that is far ahead of the bond pack this year. That would be bank loans/floating rate which I have mentioned previously, Some are already ahead double digits YTD. Aside of March they have been as steady a trender as you could want. They are massively overbought, ripe for a correction, and with fears of rising defaults. But, ( and I have to continually remind myself of this) overbought in Bondland can stay overbought for long periods of time. Then again, this wouldn’t be an investment just a trade. Investment is a foreign term to me. I think the only time I was ever in a position since the 1990s for more than four to six months was in IOFIX in 2020/2021.
Comments
There is no certainty to any of this of course. Interest rates rise and fall. So do stocks, commodities, real estate prices, currencies etc.
Ernie was a Detroit and baseball institution. There’s probably a book somewhere listing all his witty & colorful metaphors. The one I used dealt with a manager’s predisposition to stay with the starting pitcher in tight situations late in the game rather than calling in a reliever when his team is ahead. Bringing in a reliever at that point would be akin to ditching the partner who’d brought you to the dance. I don’t think it was original with Ernie. But fondly remembered nonetheless.
The other I have no idea. But Lafayette would seem to be in Indiana. So maybe something to do with Perdue or Norte Dame football?
Do you remember when the Tigers fired Ernie Harwell? I can remember right where I was standing when the news broke. Everyone was in disbelief.
dAs you have noted above, when it comes to investing, we have already made some "debatable" choices. Equities were a big part of our investing decisions until we retired. Then we chose to go with less risky options, where our lifelong accumulations would not be in jeopardy, during this geriatric period of life without employment income, life without a company pension, and life with increasing health risks and some materialistic realities associated with our materialistic assests of homes, cars, vacations, etc. At this point in time, we have chosen a safer path with CDs, which will offer some guaranteed income, not with investing risks associated with bonds or equities, which have their own unique risks.
This thread has investors/posters, in all phases of life, with varying conditions, unique to themselves. One persons decisions, is one persons decisions, and very likely will be based on conditions, that are different from other persons decisions. And my wife, who knows next to nothing about investing, is an equal partner in life with me, in making those decisons!
What would I do with another $100,000? Tax considerations might have some bearing on how it is invested. But, in general, I’d simply add it to my existing diversified portfolio. That’s what I’ve always done with windfalls. I’m about 49% in equities, 30% in various fixed income products, 15% cash equivalents and 5+% precious metals. That’s mainly through mutual funds, ETF’s and CEFs. Also own 2 individual stocks @ 5% of portfolio each.
I attempted to support the case for going all to cash and intended to praise those who invest that way. In no way would I discourage such an investment approach. The one proviso is that I think it is unwise to move back and forth between completely different approaches based on the latest 6-months’ market action. Selling risk assets low and than rebuying them higher a year out when markets have “recovered” is not a viable long term plan ISTM. As you have long been known here for your expertise in and affinity for fixed income investing, I don’t understand the umbrage - though I’ll agree my comments were a bit outside the scope of @Baseball_Fan’s hypothetical question.
The boat?
In most cases, another $100K isn't big enough to change someone portfolio asset allocation.
A lot more interesting is what would you do with a new $500K to a million. My answer, I wouldn't change a thing with my portfolio.
By kicks and giggles I was recognizing that most everyone has a different viewpoint and no one should take any posting as a recommendation or advice, maybe learn of a new fund that piques an interest. Sometimes I believe we take things a little to seriously on this board whereas if we were sitting in a backyard with a few soda pops instead of getting our dander up with some postings we'd be laughing and enjoying our different perspectives.
Btw, my perspective is that even if you have a $10 million net worth, a hundred grand is still a large sum of monies..... I'm fairly certain we would all agree with that
So whether I had $50,000, $500,000 or $1,000,000 + to invest I’d go with the model. The raw totals might be different, but on a pie-chart a 5% investment in GM displays as 5% regardless of dollar value. And your portfolio should react pretty much the same way day to day..
There would be intervening factors:
- With very small amounts it may be hard to stay as diversified as your model dictates due to fund minimums, etc
- With larger sums you save on expenses and should earn a better return.
- Taxation becomes a real issue if you are currently mainly in IRA / Tax deferred investments and you suddenly come into money that isn’t sheltered. But there are various ways to deal with that.
- Buffet has commented that it’s much harder to invest very large sums. He claims he could earn a much greater return investing a small sum. One reason is that with a vast sum invested every buy or sell order you enter tends to drive prices in the opposite direction than you want.
Surely, we all at least know our age
Just another opinion.
Whatever happened to the good old days when you could go to an investing forum and see 50 new post a day? I checked out for a couple of years and when I came back everyone left.
Date: Tuesday, September 5, 2023
Time: 9:30 AM EDT
Amount: $100,000.00
How I’d invest it “NOW” …
- U.S. Equities: $31,853.65
- Diverse Fixed Income (hedged, market neutral, global): $30,997.63
- Non-U.S. Equities: $17,148.15
- Short-Term High Yield Bond: $8,676.10
- Money Market Fund: $6,100.37
- Precious Metals Fund: $5,224.10
I know the following several investors
1) 90+% in Munis: This guy sold his company in the 90s for several million and since then he is in 90+% muni, the rest in stocks.
2) 90+% in CD: This guy has "only" one million
3) 85% in stocks: This guy has over 10 million and has been invested like this for decades and is now at retirement.
4) This guy shorted the market, but only at 2-3%.
5) This couple in their 80s invested it all in stocks since retirement in their early 60s. Why? because their pension + SS is over $25K per month.
6) Several investors in their 30s are all at high% in stocks
As you can see numbers 3,5 and 6 are invested highly in stocks but are different. Each of the above has a unique case.
Without the right context(age, goals, and risk), you can't learn much in depth. Even that isn't enough. Suppose someone says, I like treasuries right now. Well, what % do you own? is it 5% or 20%? The % you committed to anything you posted you own makes a difference.
$100K out of 10 mill is only 1%. I doubt this investor would make any significant change to her portfolio. A $100K to someone without saving matters a lot more than the 10 mill.
Lastly, when I read dtconroe's post I got the context pretty well.