al - I want to say that the bonds maturing in 1-2 years shouldn't have the full yield because of their duration, but I'd be happy to be colored wrong on this one.
All in all, it sounds alright since you're taking a third out in a year. As long as you understand that the bond portfolio will still fluctuate, and you could very well lose money even though it is a conservative fund. It's your call, but the risk is still there, and you'll need to ask yourself whether it is worth it or not. If not, put some of the bond $ in cash/FDIC-insured account. Then you can be a little more aggressive with the funds that you're not expecting to liquidate next year.

Thoughts on borrowing money to invest?

I few of my thoughts:

-this is only a good strategy if I can borrow for a fairly long term to reduce the chances of a loss in my investments. (I have no idea on max borrowing timeframes)

-I wouldn't borrow more than ~40% of my net worth.

-I would invest this borrowed money in lower risk indexes than my current choice of the world stock index ex US.


This seems easily very +EV so I'm probably missing something. I'm guessing borrowing long term isn't as simple as I'd like.

where would you get the loan?

edit**
you're not missing anything really. But you can't exactly go to an institution and get an unsecured loan for a low interest rate.

http://forumserver.twoplustwo.com/30...argin-1110750/

- Australia (Melbourne)
- ~25K a year (student/part time work)
- Low/Medium
- Timeframe is a bit weird thing. I plan on travelling to Europe at the end of my degree (6-7months from now). That's my intention but I can't say I'm doing it with certainty
- No Debt

I've saved up around ~10K from my job. My money just sits in the bank and does nothing, getting an incredibly little or no return at all. I have a background in Accounting,economics and finance, but no experience in any sort of investing.

Appreciate any feedback,
Cheers.

Country you live in - USA
Income - $72,000/yr
Risk Tolerance - Low
Timeframe for investment - Depends on size of investment and return. Could be as short as 5 years or as long as 25 (I'm 34).
Debt - $208,000 mortgage, $28,000 student loan

I have $80,000. I think I want to keep $40-$50,000 liquid. What should I do with the other $30-40,000? Also, is that too much to keep liquid? I'm married with one kid. Our monthly income covers our expenses, but not by a huge amount so I need to keep a reserve in case of emergencies.

Thanks!

Does your spouse work?

i dont know much about the index futures market. is there one for a small cap US index of a world small cap index?

Keeping $$ in the bank is a waste tbh. All they are doing is using your $$ to invest and make a huge profit and giving you fractions of a penny.

Best place to put your $$ is in a brokerage account and trade with it...dont invest..trade. If you arent capable of doing so find someone that will do it for you that you trust. Its not hard to make really good $$ in the market no matter which way its going.

The best book ever written about trading is called Reminiscences of a Stock Operator. I highly suggest you read that and it can help you make decisions that are best for you and VERY profitable. Ive read it 10 times and learn more every time I read it. Its helped me become a very successful trader and I dont plan on looking back.

With the kind of cash on hand that you have, you can have 10x that in a year if you make the right trades...and thats being conservative. No matter which way the market is moving, you can make a lot of $$ making the right trades.

Trading and investing are two very different things....I would NEVER invest in this market but I would trade the hell out of it.

historically small cap returns crush s&p500 or total US stock index returns. given i'm not retiring for 35+ years the higher volatility shouldn't matter for now.

why isnt everyone young investing in small cap indexes? what am i missing? i realize future returns of small caps will likely not be as high but only a slightly higher return makes it easily worth it.

Most people can't actually ride out the volatility.

Lol at saying by trading you can earn 10x your initial investment. Why aren't you managing billions if its that easy?

...



wtf?

Sack Lodge If you have 80K on hand to invest this is what I think you should do. Review what your interest rate is on your mortgage and student loans. They are probably around 3-5% (my guess). That is a ton of interest to pay per year. I would pay off the student loan 100% so that is 28K gone. Then I would sink an additional 22K into your mortgage. That leaves you 30K to invest. (also swing trading is not that easy as others have suggested) All the best. Let us know what you decide.
- Lemon

After reading i got two things of concept Speculating and Investing are two different things.Now a days are market is going to go up and down, it's all noise.In reality, right now with the questionable economy so although one day the market might drop like a rock, the next week it might start inching up.

Bump

^^how much are you saving per month monga? keep the 10k right where it is for your trip, and open a second savings account with a mutual fund. start off with a balanced fund. that will be your new savings account, which should build faster than the bank. How nice of a trip are you going to take? Come back when you're trip is over and assess how much you can put into long term savings (equities) for the future.

what investments should have priority in a ROTH IRA or SEP IRA?

I am fully in different types of index funds. I think funds I suspect will have the highest returns should go in there. But capital gains on any trades are also taxed yearly, correct? So should I put funds in the IRA that have the highest combination of CGs on trades and expected returns?

Here is the answer fluorescenthippo:

http://www.bogleheads.org/wiki/Princ...Fund_Placement

thanks.

yea i just discovered bogleheads recently but hadn't seen that wiki yet. very solid forum for anyone here. basically the investing forum equivalent of this poker forum.

I'm 22 years old.

I'm looking to put about $4,000-$5,000 away.
The main purpose of this investment is to prevent my access to it. In other words, I don't want to see or touch this money for about 6 months. Is a CD pointless?

Just trying to spread my money out to avoid going busto. I'd like to have some money waiting for me in june when I finish school.

Thanks for the help!

It seems like a CD would be a great choice in your circumstance. If you really want to preserve this money, put it into an IRA!

ended up putting 2k in a CD, just to ensure a (small) profit for the year.
Put the other 2k in checking account... gonna use it for online pokerz when it comes back this spring!!!!

Yes. Her income is included in the figure I listed.

I did already pay off a $5k student loan that was at 5.5% or so. I'm a little reluctant to drop another $28k on the other one, even though I know it is a 100% risk-free way to increase my monthly cashflow. IDK, maybe it's the best move.

That would leave me with $53k (I actually have ~$81k liquid). I think I definitely want to keep $25k liquid (about 6 months of living expenses). What about the other $28k?

I don't think paying down my mortgage is a great idea because while it will save me money in the long run, it won't actually improve my monthly cashflow. I am considering refinancing if I can make it work... however, I just bought last year and the value of my home has dropped a little bit; not sure if it will appraise at 80/20 or not.

Any other thoughts?