How to invest $900K in 2018

[dozu888]

What SP are you referring to? The S&P 500 yield is 1.88% at the moment, and the stock with the ticker SP (SP Plus Corporation) has no dividend?

earnings yield... not div yield.

 

[Digidave10]

If you don't want to trade, keep it in something like this... (750K-800K)
VYM
VEU
VCIT
VNQ
VNQI

and keep 100k-150K for something a bit more aggressive...

 

[LeszekXM]

1. Properties, but not in the US (too expensive now). Choose for example thailand, malesia buy studios (~60k USD?) and rent for toursits (ie by Airbnb). Remember you need to buy cheap( thailand cheaper than US) money here is being made not be renting but by increase in value of property over long time.
2. ETFs wich are destined to fall like UVXY, JDST etc - use credit spreads, small positions, roll, average you never lose. Of course you need to sell them.
3. Divindend stocks - buy only after deep correction, crash, be patient - lot of people there looking for easy money, you have to be smarter, so just wait for occasion.

 

[Magic]

earnings yield... not div yield.

Not sure where you’re getting the idea that stocks are better value relative to bonds if earnings yield is greater than bond yields.. the difference you’re seeing is the risk premium embedded in stocks.

If yields are equal that’s a sign of macro-level price dislocation.. getting an equal return from an instrument regarded as closest thing to a risk free investment vs. stock indexes that have shown the propensity for 50%+ drawdowns is nowhere near equal value.

Your premise is devoid of an understanding of things like the value provided by reduction in volatility drag.. or increased stability of future caah flows, just to name a few. Optimal investing is a lot more sophisticated than just seeking the highest annual return you can find in a vacuum imo.

 

[wrbtrader]

Hello,
I would love to hear the opinion of you guys about how to invest $900K today.
Let say I'm in my mid 40s, one child on the way, no propriety or homes, 110K in a traditional IRA and an health condition that it might allows to let me work for no more than 10 years.
I have tried briefly with day-trading and swing trading as side of my job, but results were definitely not encouraging and don't want to burn more cash.
I asked a financial advisor but her annual fee would be way more than the annual health insurance premium or the kindergarten annual fee!!
How you guys would employ the cash I have?....Any suggestions would be really appreciated.

Don't come to a trading forum asking for investment advice involving what to do with 900k.

If the financial advisor you talked to is too expensive...shop around and find another one that's cheaper.

Minimum, there should be recommendations from an advisor about insurance plans to protect your family in case of your death or critical illness in which you're unable to work along with debt protection to prevent debtors from putting their fingers on your money in case you die along with protection of your money in case you split from your spouse.

wrbtrader

 

[dozu888]

Not sure where you’re getting the idea that stocks are better value relative to bonds if earnings yield is greater than bond yields.. the difference you’re seeing is the risk premium embedded in stocks.

If yields are equal that’s a sign of macro-level price dislocation.. getting an equal return from an instrument regarded as closest thing to a risk free investment vs. stock indexes that have shown the propensity for 50%+ drawdowns is nowhere near equal value.

Your premise is devoid of an understanding of things like the value provided by reduction in volatility drag.. or increased stability of future caah flows, just to name a few. Optimal investing is a lot more sophisticated than just seeking the highest annual return you can find in a vacuum imo.

the volatility (a draw back) is canceled by the growth rate (a positive).... that's the idea behind the fed model, which says the SP forward earning yield should roughly equal the 10-year yield.

 

[Sig]

the volatility (a draw back) is canceled by the growth rate (a positive).... that's the idea behind the fed model, which says the SP forward earning yield should roughly equal the 10-year yield.

For a risk neutral party that is certainly true. Just like it's true that buying a deep OTM call on a random liquid stock is the same as buying a bond if you're considering risk adjusted returns....the volatility of the call (massive drawback) is canceled by the potentially high return (massive positive). Markets are pretty efficient when it comes to risk adjusted return, so you can really make this argument about almost any asset vs any other. However it doesn't make the assets equivalent when it comes to parties who are more risk averse than risk neutral, which would presumably include the OP with their $900K nest egg.

 

[newwurldmn]

For a risk neutral party that is certainly true. Just like it's true that buying a deep OTM call on a random liquid stock is the same as buying a bond if you're considering risk adjusted returns....the volatility of the call (massive drawback) is canceled by the potentially high return (massive positive). Markets are pretty efficient when it comes to risk adjusted return, so you can really make this argument about almost any asset vs any other. However it doesn't make the assets equivalent when it comes to parties who are more risk averse than risk neutral, which would presumably include the OP with their $900K nest egg.

If you were risk neutral, you would be agnostic to volatility. But we all are risk averse. We all have an uncle point - even Warren Buffet as we saw in 2008.

 

[qxr1011]

Hello,
I would love to hear the opinion of you guys about how to invest $900K today.
Let say I'm in my mid 40s, one child on the way, no propriety or homes, 110K in a traditional IRA and an health condition that it might allows to let me work for no more than 10 years.
I have tried briefly with day-trading and swing trading as side of my job, but results were definitely not encouraging and don't want to burn more cash.
I asked a financial advisor but her annual fee would be way more than the annual health insurance premium or the kindergarten annual fee!!
How you guys would employ the cash I have?....Any suggestions would be really appreciated.

investing in markets is not easier than trading the markets
so forget about do-it-yourself, as well as the "professional" advice - its all just luck (since there is no working method and relevant experience) driven
invest in the business you are in, or in something you know very well

 

[dozu888]

For a risk neutral party that is certainly true. Just like it's true that buying a deep OTM call on a random liquid stock is the same as buying a bond if you're considering risk adjusted returns....the volatility of the call (massive drawback) is canceled by the potentially high return (massive positive). Markets are pretty efficient when it comes to risk adjusted return, so you can really make this argument about almost any asset vs any other. However it doesn't make the assets equivalent when it comes to parties who are more risk averse than risk neutral, which would presumably include the OP with their $900K nest egg.

you'd think markets are efficient... but...

intra-market it's wrong all the time, that's why we have opportunities to buy at lower than the 'efficient' price.

not to mention, inter-market mis-pricing happens all the time... and currently there is still a very big mispricing between bonds and stocks, with the reason I have already stated. after experiencing the 2008, maybe also the 2000 crash, investors are scared... especially retail sentiment is still bearish... financial advisors/planners are still recommending the 60/40 mix based on age lol.. and just look at the example I gave, in summer 2016 junk was yielding 5%, 10-year treasury was 2%+... and AAPL was forward yielding 10%..

if markets were completely traded by machines, then I'd say we'll be very close to efficient... but humans, lol... humans are so stupid.