Short term investment ideas

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johnkgan
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Joined: Sun Jun 03, 2018 9:43 am

Short term investment ideas

Post by johnkgan »

I request your advice on specific investments of ~150k for around 6 months to 1 year. I plan to start looking for houses in December and probably use that for down payment once I find a suitable house which I expect will take time. (Appreciate if you may please also share your suggestions on which bank/financial institutions may offer the best rates for those investments. I am getting lost in googling.)
Thank you so much for your suggestions in advance.
Last edited by johnkgan on Sun May 28, 2023 12:55 pm, edited 2 times in total.
Johm221122
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Re: Short term investment ideas

Post by Johm221122 »

Money market or high yield savings
Topic Author
johnkgan
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Re: Short term investment ideas

Post by johnkgan »

Johm221122 wrote: Sun May 28, 2023 12:45 pm Money market or high yield savings
Thank you so much! By any chance, would you have recommendations on the banks that would offer the best rates? I live in California.
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ruralavalon
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Re: Short term investment ideas

Post by ruralavalon »

johnkgan wrote: Sun May 28, 2023 12:44 pm I request your advice on specific investments of ~150k for around 6 months to 1 year. I plan to start looking for houses in December and probably use that for down payment once I find a suitable house which I expect will take time. (Appreciate if you may please also share your suggestions on which bank/financial institutions may offer the best rates for those investments. I am getting lost in googling.)
Thank you so much for your suggestions in advance.
Federally insured savings accounts, federally insured short-term CDs, or a good money market fund. You can get 5% yields.

For best rates see:
https://www.bankrate.com/
https://www.doctorofcredit.com/
Vanguard Money Market Funds
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: Short term investment ideas

Post by Outer Marker »

johnkgan wrote: Sun May 28, 2023 12:57 pm
Johm221122 wrote: Sun May 28, 2023 12:45 pm Money market or high yield savings
Thank you so much! By any chance, would you have recommendations on the banks that would offer the best rates? I live in California.
Vanguard Federal Money Market - paying 5% and exempt from CA tax.
cjcerny
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Re: Short term investment ideas

Post by cjcerny »

2nd hand treasuries from Vanguard or Fidelity.
Topic Author
johnkgan
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Re: Short term investment ideas

Post by johnkgan »

Thanks again! Those suggestions were very helpful.

Appreciate your confirmation if you meant VUSXX or VMFXX or if there is a preference between the two.

I was also wondering is there is any con in investing in those MMFs vs CD.. (I understand the principal and rate gets locked in CD, but is there any chance the interest which is ~5% for the Vanguard funds could go down? Is that why people would still invest in CDs?). Thank you.
RyeBourbon
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Re: Short term investment ideas

Post by RyeBourbon »

T-bills. No state tax. 6-months yielding 5.3%+

You can get them at Treasury Direct or Fidelity (or any other brokerage; I like Fidelity).
Last edited by RyeBourbon on Mon May 29, 2023 12:51 pm, edited 1 time in total.
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dcabler
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Re: Short term investment ideas

Post by dcabler »

johnkgan wrote: Sun May 28, 2023 12:44 pm I request your advice on specific investments of ~150k for around 6 months to 1 year. I plan to start looking for houses in December and probably use that for down payment once I find a suitable house which I expect will take time. (Appreciate if you may please also share your suggestions on which bank/financial institutions may offer the best rates for those investments. I am getting lost in googling.)
Thank you so much for your suggestions in advance.
I've been doing this with auto-rolled T-Bills at TreasuryDirect. Similar amount and timeframe. For us, it's for some home improvement projects we want to start after I retire shortly. :sharebeer
Topic Author
johnkgan
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Re: Short term investment ideas

Post by johnkgan »

Thank you! I understand there are multiple options from above: TBills, CDs, Vanguard MMF. Appreciate your advice on which one would be most beneficial. Thanks again!
LeftCoastIV
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Re: Short term investment ideas

Post by LeftCoastIV »

Vanguard Federal Money Market Fund is paying around 5% and provides you immediate liquidity if you find a house. That seems like a good bet for you.

The fund is not FDIC insured but the underlying investments are quite safe.
Topic Author
johnkgan
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Re: Short term investment ideas

Post by johnkgan »

Thanks a lot again!

Would you mind confirming if you meant VMFXX (Vanguard Federal Money Market Fund - 5.04%) or VUSXX (Vanguard Treasury Money Market Fund - 5.07%) or some other fund?

I am looking for the best returns (If returns are the same, then taking taxes also into account if that helps - We live in California)
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Re: Short term investment ideas

Post by Outer Marker »

johnkgan wrote: Sat Jun 03, 2023 5:08 pm Would you mind confirming if you meant VMFXX (Vanguard Federal Money Market Fund - 5.04%) or VUSXX (Vanguard Treasury Money Market Fund - 5.07%) or some other fund?

I am looking for the best returns (If returns are the same, then taking taxes also into account if that helps - We live in California)
I use the Federal Money Market Fund. But at 0.003% difference it's of no consequence. Both are subject to federal tax but exempt from CA tax.
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