Should i put 300k into an S&P 500 ETF?

[Cabin111]

I haven't read the full thread...This is my thoughts. Do you work at a job? Do you have a 401K or a pension?? Are you funding it to the max? Those are more important questions that the investment question. If you don't have a pension, then get a IRA started. Go with a company like Fidelity or Schwab. They can walk you through to get it started...They have people there that only handle opening IRAs. If you don't have a pension, fund your IRA to the MAX this year to avoid taxes from the apartment. Ask friends and family if what I say makes sense...OK

Concerning investments...Maybe put 1/2 in an index fund (S&P 500) and 1/2 in US Treasuries...Laddered. Laddered...6 months, 9 months, 1 years.

 

[engineering]

I haven't read the full thread...This is my thoughts. Do you work at a job? Do you have a 401K or a pension?? Are you funding it to the max? Those are more important questions that the investment question. If you don't have a pension, then get a IRA started. Go with a company like Fidelity or Schwab. They can walk you through to get it started...They have people there that only handle opening IRAs. If you don't have a pension, fund your IRA to the MAX this year to avoid taxes from the apartment. Ask friends and family if what I say makes sense...OK

Concerning investments...Maybe put 1/2 in an index fund (S&P 500) and 1/2 in US Treasuries...Laddered. Laddered...6 months, 9 months, 1 years.

The part I don't get is why buy a 1 year when a one month is paying more?

If interest rates change you're going to reallocate between stocks and bonds anyways.

Having a mix of expirations makes sense to me when the yield curve is not inverted.
But in this market you're accepting less interest for a bigger commitment.

What am I missing?

 

[Overnight]

The part I don't get is why buy a 1 year when a one month is paying more?

...What am I missing?

Isn't it on an annualized basis? So that higher yield is for just one month worth of an annualized yield. If next month the 1M is lower than the 1Y, well, now you would get less on that next 1M, whereas you're locked into the higher 1Y rate.

 

[engineering]

Isn't it on an annualized basis? So that higher yield is for just one month worth of an annualized yield. If next month the 1M is lower than the 1Y, well, now you would get less on that next 1M, whereas you're locked into the higher 1Y rate.

Yes, it's annualized.

The way I see it, if rates are moving significantly downward, you don't want your money locked you anyways.

Yeah if rates fall 2% over the next year you'd do better by being in a 1 year note than a series of 1 months notes...
But if rates are falling that much that fast there is something significant happening in the markets and the last thing you want is your money locked up. You're going to move some or all of that money to assets because asset prices are going to spike or inflation is going to spike or both.

If six months from now the market is down 40% and interest rates are at zero, you're not going to be thinking "thank goodness I'm locked into a 5% rate". You're going to be trying to unload your 1 year to someone else so you can buy stocks.

Just my opinion.

 

[Overnight]

...

If six months from now the market is down 40% and interest rates are at zero, you're not going to be thinking "thank goodness I'm locked into a 5% rate". You're going to be trying to unload your 1 year to someone else so you can buy stocks...

Or maybe buy some 2Y note futures! Mix it up and party.

 

[murray t turtle]

I haven't read the full thread...This is my thoughts. Do you work at a job? Do you have a 401K or a pension?? Are you funding it to the max? Those are more important questions that the investment question. If you don't have a pension, then get a IRA started. Go with a company like Fidelity or Schwab. They can walk you through to get it started...They have people there that only handle opening IRAs. If you don't have a pension, fund your IRA to the MAX this year to avoid taxes from the apartment. Ask friends and family if what I say makes sense...OK

Concerning investments...Maybe put 1/2 in an index fund (S&P 500) and 1/2 in US ............Laddered. Laddered...6 months, 9 months, 1 years.

%%
Good + factor in one's personality.
Interesting the $300K question has been asked in the worst historical month of all of them\ SEPT\so far so good on that backward looking forecast LOL[AS of Tues close on SPY anywayLOL so i average smaller position on that, than SPY or QQQ]
History can help forecast but not predict. Aug 197, SPY + related went down\ Richard Nixon resigned AUG /SEPT 1974 down;
OCT bear killer nicknamed by Stock Traders Almanac/OCT SPY [S&P500] up > more than 16%.
Only ask family+ friends if they are good with money , some are not; but most parents had more sense than we did as kids , as a general rule.
I like SPY + VOO, all my charts are SPY, [liquidity leader , by far ]; but long term ,very much the same but not exact. XLE sector , not so good 10 years but 3 years has + maybe excellant.
Like Vanguard founder said , '' enemies of investors are[mainly] emotions + expenses''

 

[Cabin111]

What am I missing?

Check your gas prices?? What is real inflation running at...

Gasoline, diesel, and natural gas prices will be passed along to the consumer/businesses. They in turn will pass higher prices to others...If they can. Just my belief that 2% inflation is a pipe dream...

I wrote the above before I looked at the market...

Gas prices rose 10.6% in August following a 0.2% increase in the previous month.

 

[Michael_]

Thanks for all the feedback, i really appreciate it.

Thanks for posting this chart as i was not aware of this and of course this is something i want to avoid.

Best way is buy every month, 40 years, common millionaire pattern ;
NOT likely any with sense, would put that $300k @ 30 years, in in just one month.

The problem with putting little amounts in every month (vs. 300k at one time) is that i would loose out on a lot of compound interest.
On the other hand, if i put 300k in all at once, if i do it at the wrong time (like in the example above)
i would not make much or even any money at all.

So what do i do?
Put my 300k in short term government bonds to fight inflation and slowly invest it (monthly) over lets say 30 years?
Or maybe wait 1-2 years if something 2008 like is coming and if so put it in all at once?
Or maybe a combination of the two? Start investing monthly and if there is an opportunity just put it in all at once?

In a letter to Berkshire Hathaway shareholders, Warren Buffett outlines his plans to follow the 90/10 rule regarding his wife's inheritance,
which will be invested 90% in an S&P 500 index fund and 10% in government bonds.

Are there more details available as to how this would be executed?
Would the 90% be invested all at the same time or slowly over time?
I guess with this amount it's almost irrelevant even if you put it in at the worst time possible?
I mean you would still have more than enough to survive in this case, right?

Dave Ramsey has some good tips, invest across 4 or 5 good funds, every month .

Well warren buffett seems to think that 90% into the S&P 500 and 10% in government bonds is sufficient.
I personally like this approach because it's simpler than dealing with a bunch of different mutual funds and also cheaper.
But is dave ramseys method significantly safer?

 

[Cabin111]

Thanks for all the feedback, i really appreciate it.



Thanks for posting this chart as i was not aware of this and of course this is something i want to avoid.



The problem with putting little amounts in every month (vs. 300k at one time) is that i would loose out on a lot of compound interest.
On the other hand, if i put 300k in all at once, if i do it at the wrong time (like in the example above)
i would not make much or even any money at all.

So what do i do?
Put my 300k in short term government bonds to fight inflation and slowly invest it (monthly) over lets say 30 years?
Or maybe wait 1-2 years if something 2008 like is coming and if so put it in all at once?
Or maybe a combination of the two? Start investing monthly and if there is an opportunity just put it in all at once?



Are there more details available as to how this would be executed?
Would the 90% be invested all at the same time or slowly over time?
I guess with this amount it's almost irrelevant even if you put it in at the worst time possible?
I mean you would still have more than enough to survive in this case, right?



Well warren buffett seems to think that 90% into the S&P 500 and 10% in government bonds is sufficient.
I personally like this approach because it's simpler than dealing with a bunch of different mutual funds and also cheaper.
But is dave ramseys method significantly safer?

I would do more government bonds and less SPY at this time.

People do NOT have money to spend...They are maxed out. When we have a correction in the market, then you would want to add to the market (SPY)...

 

[mervyn]

I would do more government bonds and less SPY at this time.

People do NOT have money to spend...They are maxed out. When we have a correction in the market, then you would want to add to the market (SPY)...

Selling the right spy puts is always outperforming the current yield.