Reply to Help me decide: $20k in I Bonds or $20k in VOO?

Forum Index » Money and Finances

Reply to "Help me decide: $20k in I Bonds or $20k in VOO?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Trying to figure out what to do with $20k I’ve saved up. Some context separate from the $20k fund:

- Currently have $20k in I Bonds purchased last year 
- $60k cash cushion emergency fund saved
- $50k in after tax brokerage accounts
- will come into about $250k of tech stock in the next few years as it vests 
- already max out 401k and 529 accounts

Any thoughts on if I should stick with my initial I Bond plan with these high rates, or use the low VOO prices to get more VOO at a “discount?”

TIA wise ones of DCUM![/quote]

Depending on your age, risk tolerance and investment horizon:
High risk:  50/50 - TQQQ and SPXL  (young, high risk tolerance, very long term investment horizon)
Mderate risk: 50/50 - QQQ/VOO 
Low risk: 50/50 - VOO/iBonds
zero risk: 100% iBonds

For options 1 and 2, I'd spread the investment over the next 5-6 months.. Say second business day of each month, 2K per month per instrument.  
[/quote]

Thank you - this is very helpful. I need to read up on TQQQ and SPXL. We are late 20s, and no immediate plans for the money so likely long term investment horizon. Some talk of getting a second property as an investment, but not sure if that makes sense or better to keep money in the market. [/quote]

TQQQ and SPXL represent 3X QQQ and SPY respectively, compounded daily.  You could win big or lose big.  TQQQ has lost money relative to the others (QQQ and VOO) over the short and medium term.  However, at 5 years, it has returned 102% (almost the same as QQQ) while SPXL has returned 48% (almost the same as VOO).   However, over its life (since Feb 2010), TQQQ has returned 4,300%, SPXL 1241% while QQQ and VOO have returned 515% and 303% respectively.  Of course, TQQQ will lose a LOT during bad times (76%ytd).  The high return i quoted are despite this 76% ytd loss.  
No harm in allocating a small amount of money to one or both instruments and based on your income, 20K IS a small amount of money and you can afford to take that risk at your age.   [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics