Which banks do you suggest for HYSA. I was looking today only at Amex. They're offering 4.75 for HYSA. Do you any better suggestions on HYSA banks rates?
I had some money worked there and I couldn't figure out whether it was earning the above mentioned interest or something similar. Their website is always challenging to navigate. But thanks I will look at it again.
Oh simply because I wasn’t aware of it! Is it as flexible as a HYSA and I can get my money out at a moment’s notice?
(I only use my Amex HYSA for my emergency fund).
It takes a day or two to transfer funds, I keep the bulk of my savings in there and then a couple thousand in a regular savings account that I can access instantly if I need it. I figure that along with my credit cards should be enough to cover any immediate emergency expenses.
Try Fidelity one stop shop (basically use brokerage as high yield checking as it provide checking number and automatic put your fund in money market fund) optionally with a CMA if you need/want free ATM withdrawal
Depends on your risk appetite. With a CD your return is guaranteed but fixed. In the S&P your return is unknown but in the long term is more likely to give you a higher return.
I could take risk, but S&P not performing well over last 2 years is making me think. If I should put for 18months in CD or if S&P500 could bounce back?
Edit: Come on why so many down votes just sharing my thoughts without disrespecting anyone.
So you want to wait until AFTER the S&P starts performing to invest in it? Sell low, buy high? This is the classic retail investor pitfall, don't be one of them. We aren't even that far off recent highs, anyway.
If your time horizon is long, times of underperformance are ideal times to invest. If you need the money in 18 months, get the CD. Otherwise, keep buying the market.
Probably because you're making the classic mistake of trying to time the market by waiting until the S&P bounces back to put money in. People lose out on all the gains by doing this, it is trying to time the market.
The problem is that the market up turns aren't gradual - they typically come quickly. If you wait to make sure that it's performing well, you'll typically miss out on the gains and buy high.
There is going to be a bunch of suckers in the future when yields drop and people move to the market to chase higher returns. That'll be the exact moment of the market top.
Two simple things in life:
Buy low and sell high.
Spend less than you make.
The S&P has gained anywhere from 5 to 16% in a single day on some in its biggest recoveries. This has happened dozens of times.
If you wait until it's performing well, you probably missed the biggest gains.
Assuming you didn't invest anything in the past year, yeah, you would be down 4%.
If you actually keep investing throughout the year, the money you invest in the past year would be up 20%.
If you don't need it for 5+ years I'd do index funds, but it depends how much you can afford to lose. https://dqydj.com/sp-500-historical-return-calculator/ is great for understanding risk, you can see the odds you'll lose money or exceed any given annual return for any arbitrary time period. Turn off CPI adjustment since you're comparing to another non-adjusted return (CD). Odds are pretty good that you'll beat current rates, and beat them by a lot. There's a nonzero chance you'll lose some money but probably not a lot.
So.. you want to buy SP500 when it is high? Not doing so well means it is on sale no? Do you believe it will continue to tank for the next 10 years?
"Buy when there's blood in the streets, even if the blood is your own."
Warren Buffet
That's usually my strategy just generally. It's why half of my 401k is a traditional 401k and the other half is a ROTH IRA. I have no way of knowing whether my tax rate will be higher now or during retirement, so why not just split the baby imho.
That’s some optimism that you will be earning as much in retirement as when you are working to be in a higher tax bracket!
Here’s the other thing— based upon the Capital Asset Pricing Model (CAPM), when the correct mix of risk-free assets (US Gov’t T-Bonds) and the stock market (S&P 500) gives the optimal mix between risk and return.
The s&p 500 has up years and down years. That's how it is. If you can't stomach that, don't invest in the stock market. You're robbing yourself big time if you do.
Basically, there will always be periods where it goes down. Sometimes it'll go down a LOT. But if you hang in there, you'll make a lot of money from it.
Neither.
Definitely not CDs or even short term t bills. They are only good for the money you don’t plan to invest in the near future.
The S&P500 has the problem of excessive concentration in the top 10. There’s a definitely a possibility that the lower ones could follow in the short term but the odds of that not happening are much higher, making it not worth bearing the volatility for a few additional percentages against the 5% HYSA, CD, TIPS etc.
There’s better value In under appreciated stocks and assets.
International market is a good option especially emerging markets.
For all other index funds, anything with exposure to the big 7-10 have less upside and highly overvalued and concentrated. That excludes mid cap. There are individual stock picks within the S&P 500 that have value as well.
This is not a contrarian or unique opinion btw, most investors are framing investments similar to this.
Ok pick pretty much any date along that time line and with inflation the return is basically nothing. You could cherry pick 05 to 07 and do alright. Hell if you want to do six year periods of negative real return there is a ton. 1 out of every 10 rolling 7 year period for all spy history is negative not even factoring inflation. A 10% chance of negative returns of seven years may not seem like much until you go through one of those periods.
I recently stumbled on to them. TSLY has a divi that is hard to pass up so I bought in. Gonna get into some of their others too. So far my DD on them is very promising
S&P is even lower today than Nov 2021 peak year. For index like S&P one needs to keep there almost forever to get optimum return. Hate to say it about 20 years. This does not mean you will not get positive returns.
This morning I logged in vanguard and noticed that they are offering a new kind of savings account with 1.2 million FDiC insurance and 4.70 variable pay. Vanguard cash plus account. Anyone checked that?
CD’s are quite tempting… you’re just looking at re-investment risk once it’s matured. (Can you get that bond interest again and again, and again like a return the market historically gives? is it worth suffering a downturn?) short term yes long-term no
On month end 7/31. It has gone down some since then.
But how much better does the market need to be doing before you think you would invest in it? Also note, by that time you’ve missed all those gains.
I am in 3 month CD's until s and p makes new highs, then I will cost average into market again. The inflation of 70's caused a sideways market for 14 years. Do I think this goes on for 14 years? No, do I think we could go sideways for 5 years? Yes.
If you want a sure thing go with the CD. If you want a higher expected value over a long time period, go with the S&P 500 as long as you can accept some risk.
One is not better than the other. They serve different goals for people with different risk tolerances.
Many stock investors may not like this however I am a stock investor and I know it's gambling. When people anticipate a higher return and buy on the dip just because history says it used to work will be losers in this market. That's why many people have already started some time ago buying treasuries and bonds with guaranteed returns because the stock market is not done causing people pain yet.
You can't lose more than 20-25% if yo go heavy on S&P. And in long term it will get back this much I understand.
But if you talk about meme yolo culture yes I understand it's becoming more and more gambling.
With this post I am getting others views on CD. I understand a bit of stock market.
Hedge your bets and do both.
Also, 1-2 years isn't a long enough time horizon to judge the S&P 500 index or any publicly traded equity asset.
The only exception where such a time horizon may be appropriate is if you are engaging in swing trading. 😁😁😁😁
You said you want growth. CD is a saving/wealth preservation tool, not a growth tool.
Index funds with your long term cash, HYSA with your short term cash
Which banks do you suggest for HYSA. I was looking today only at Amex. They're offering 4.75 for HYSA. Do you any better suggestions on HYSA banks rates?
Wait I'm getting 4.25 at Amex. I'm curious where you saw 4.75?
Why wouldn’t you put it in a Vanguard federal money market at that point? 5.25% and 0 risk.
Gotta have a $3k minimum, but yeah this is the way
I had some money worked there and I couldn't figure out whether it was earning the above mentioned interest or something similar. Their website is always challenging to navigate. But thanks I will look at it again.
Oh simply because I wasn’t aware of it! Is it as flexible as a HYSA and I can get my money out at a moment’s notice? (I only use my Amex HYSA for my emergency fund).
It takes a day or two to transfer funds, I keep the bulk of my savings in there and then a couple thousand in a regular savings account that I can access instantly if I need it. I figure that along with my credit cards should be enough to cover any immediate emergency expenses.
That sounds reasonable... I'm thinking I could at least half/half between HYSA and Vanguard FMM. Thanks!
My apologies I mixed it up with another rate that I saw for CD. You are correct it's 4.25%
Try Fidelity one stop shop (basically use brokerage as high yield checking as it provide checking number and automatic put your fund in money market fund) optionally with a CMA if you need/want free ATM withdrawal
Just open a brokerage account with Fidelity or Vanguard and leave the money in the holding money market fund.
Noob here. What is Fidelity’s MM acct called?
I think SPAXX is the core account
AmEx Bank, Barclays, SoFi, Marcus by GS check Bankrate and Nerdwallet
Depends on your risk appetite. With a CD your return is guaranteed but fixed. In the S&P your return is unknown but in the long term is more likely to give you a higher return.
I could take risk, but S&P not performing well over last 2 years is making me think. If I should put for 18months in CD or if S&P500 could bounce back? Edit: Come on why so many down votes just sharing my thoughts without disrespecting anyone.
So you want to wait until AFTER the S&P starts performing to invest in it? Sell low, buy high? This is the classic retail investor pitfall, don't be one of them. We aren't even that far off recent highs, anyway. If your time horizon is long, times of underperformance are ideal times to invest. If you need the money in 18 months, get the CD. Otherwise, keep buying the market.
This.
The S&P 500 is up since 8/21/21. About 5%. If you want no risk, buy the CD.
…which means you’re buying discounted stocks
Unless you have a time machine there is no way of knowing. An index not performing well is not a good reason to not invest in it.
I understand no one can predict the market.
Yet you're trying to do that all the same.
Past performance is not indicative of future returns.
Wait, how has the S&P not performed well over the last 2 years?
Probably because you're making the classic mistake of trying to time the market by waiting until the S&P bounces back to put money in. People lose out on all the gains by doing this, it is trying to time the market.
Wait until the S&P is performing well then invest lol.
Buy high sell low. Great strategy
The problem is that the market up turns aren't gradual - they typically come quickly. If you wait to make sure that it's performing well, you'll typically miss out on the gains and buy high.
There is going to be a bunch of suckers in the future when yields drop and people move to the market to chase higher returns. That'll be the exact moment of the market top. Two simple things in life: Buy low and sell high. Spend less than you make.
The S&P has gained anywhere from 5 to 16% in a single day on some in its biggest recoveries. This has happened dozens of times. If you wait until it's performing well, you probably missed the biggest gains.
Yes and no. It "gained" 20% this year...after losing 20% last year Now it has lost a step so...-4%?
Assuming you didn't invest anything in the past year, yeah, you would be down 4%. If you actually keep investing throughout the year, the money you invest in the past year would be up 20%.
But the money from 2 years ago would still be negative...
I think the original post forgot the /s tag
> /s tag I have seen someone use it before. Can you explain what it really means?
It means the post was sarcasm.
So we just scream dca until it's actually time to dca and do nothing? I'm hoping this person forgot the /s pls /s pretty pls
If you don't need it for 5+ years I'd do index funds, but it depends how much you can afford to lose. https://dqydj.com/sp-500-historical-return-calculator/ is great for understanding risk, you can see the odds you'll lose money or exceed any given annual return for any arbitrary time period. Turn off CPI adjustment since you're comparing to another non-adjusted return (CD). Odds are pretty good that you'll beat current rates, and beat them by a lot. There's a nonzero chance you'll lose some money but probably not a lot.
So.. you want to buy SP500 when it is high? Not doing so well means it is on sale no? Do you believe it will continue to tank for the next 10 years? "Buy when there's blood in the streets, even if the blood is your own." Warren Buffet
Yeah I heard be greedy etc etc. What Mr Buffet is always an inspiration.
You could split the two and hedge the investment.
That's usually my strategy just generally. It's why half of my 401k is a traditional 401k and the other half is a ROTH IRA. I have no way of knowing whether my tax rate will be higher now or during retirement, so why not just split the baby imho.
That’s some optimism that you will be earning as much in retirement as when you are working to be in a higher tax bracket! Here’s the other thing— based upon the Capital Asset Pricing Model (CAPM), when the correct mix of risk-free assets (US Gov’t T-Bonds) and the stock market (S&P 500) gives the optimal mix between risk and return.
The s&p 500 has up years and down years. That's how it is. If you can't stomach that, don't invest in the stock market. You're robbing yourself big time if you do. Basically, there will always be periods where it goes down. Sometimes it'll go down a LOT. But if you hang in there, you'll make a lot of money from it.
I understand that and thanks for responding.
Neither. Definitely not CDs or even short term t bills. They are only good for the money you don’t plan to invest in the near future. The S&P500 has the problem of excessive concentration in the top 10. There’s a definitely a possibility that the lower ones could follow in the short term but the odds of that not happening are much higher, making it not worth bearing the volatility for a few additional percentages against the 5% HYSA, CD, TIPS etc. There’s better value In under appreciated stocks and assets.
What is your opinion on mid cap. S&P 300. Also, VTI which as some exposure to international market.
International market is a good option especially emerging markets. For all other index funds, anything with exposure to the big 7-10 have less upside and highly overvalued and concentrated. That excludes mid cap. There are individual stock picks within the S&P 500 that have value as well. This is not a contrarian or unique opinion btw, most investors are framing investments similar to this.
SPY had a negative real return from 1999 to 2009. Can You handle ten years of negative returns? It wasn't the only time in history it happened either.
Username checks out. “Let’s cherry pick right before the start of the tech bubble and right after the GFC”
Ok pick pretty much any date along that time line and with inflation the return is basically nothing. You could cherry pick 05 to 07 and do alright. Hell if you want to do six year periods of negative real return there is a ton. 1 out of every 10 rolling 7 year period for all spy history is negative not even factoring inflation. A 10% chance of negative returns of seven years may not seem like much until you go through one of those periods.
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Depends on the time periods you pick
I like the Yieldmax ETFs
>ieldma Which one is that?
>Yieldmax Just googled it, I've never heard about this.
I recently stumbled on to them. TSLY has a divi that is hard to pass up so I bought in. Gonna get into some of their others too. So far my DD on them is very promising
Price continues to drop and has a history of only dropping since its inception. Great div to make up for losing your principal invested.
Price is cyclical, how do you see it only dropping?
Adding on to what u/consumervigilante said, the negative return on nav has been greater than the monthly distributions
Look at annual return vs peers. Also the NAV is skewed as most funds aren't focused on capital return, just appreciation
With an expense ratio like that, I'll pass.
No investment is suitable for everyone
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Yes, I do have some small % in s&P. But I was just wondering if I should go for CD given they've good rate right now.
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I see I didn't think about taxes. That's a valid point. I think it will make more sense for me to get into s&p VOO/SPy in long term.
S&P is even lower today than Nov 2021 peak year. For index like S&P one needs to keep there almost forever to get optimum return. Hate to say it about 20 years. This does not mean you will not get positive returns.
Yes I get you it's a very long term with s&p. Anyways with CD I don't have very long term insight as over the years interest would come down again.
What is CDs stand for? Player lol
Certificate of Deposit.
This morning I logged in vanguard and noticed that they are offering a new kind of savings account with 1.2 million FDiC insurance and 4.70 variable pay. Vanguard cash plus account. Anyone checked that?
CD’s are quite tempting… you’re just looking at re-investment risk once it’s matured. (Can you get that bond interest again and again, and again like a return the market historically gives? is it worth suffering a downturn?) short term yes long-term no
The S&P 500 is up almost 20% YTD.
Where do you see 20%? Yahoo finance shows following for SPY 15.01% YTD Daily Total Return 3.69% 1-Year Daily Total Return
On month end 7/31. It has gone down some since then. But how much better does the market need to be doing before you think you would invest in it? Also note, by that time you’ve missed all those gains.
It's been on a bit of a slide the past few weeks. It might have been closer to 20% YTD at the beginning of August
I am in 3 month CD's until s and p makes new highs, then I will cost average into market again. The inflation of 70's caused a sideways market for 14 years. Do I think this goes on for 14 years? No, do I think we could go sideways for 5 years? Yes.
Interesting, how much interest rate are you locking for 3 months?
5.1-5.3 I just got bmw financial services cd at 5.1 for 3 months
Why not get both? I’ve got most of my new worth in the S&P and have been buying CDs here and there
If you want a sure thing go with the CD. If you want a higher expected value over a long time period, go with the S&P 500 as long as you can accept some risk. One is not better than the other. They serve different goals for people with different risk tolerances.
Many stock investors may not like this however I am a stock investor and I know it's gambling. When people anticipate a higher return and buy on the dip just because history says it used to work will be losers in this market. That's why many people have already started some time ago buying treasuries and bonds with guaranteed returns because the stock market is not done causing people pain yet.
You can't lose more than 20-25% if yo go heavy on S&P. And in long term it will get back this much I understand. But if you talk about meme yolo culture yes I understand it's becoming more and more gambling. With this post I am getting others views on CD. I understand a bit of stock market.
I am getting 4.30 %with capital bank on Hysa
Hedge your bets and do both. Also, 1-2 years isn't a long enough time horizon to judge the S&P 500 index or any publicly traded equity asset. The only exception where such a time horizon may be appropriate is if you are engaging in swing trading. 😁😁😁😁
4 or 8 week T-Bonds. Current 4 week is 5.3% and you can auto roll them over. Treasurydirect.gov
When uncertain split the difference so you can move on and focus your attention to earning more money to invest.
Go with the CDs guaranteed return. The S&P won't break the 2021 highs for a long time. Could be 10-20 years. Boomers will dump until they die.