Risk Reward

popowich · 07-18-2008, 01:31 PM

Hello,

I'm 31, my retirement accounts are in good shape, but my near term savings have recently been spent on various home improvement projects including new windows last year and a $10,000+ vinyl siding project that was completed this morning. I nailed the last GOOG high selling at $590 providing me with $8000 toward the siding bill. It is currently sitting in a savings account earning 3% and getting $150 per paycheck ($300/month) automatically added to it. What do you think about moving this into SPY for the year and selling if there is a 10-20% pop along the way? Best case I'm looking to make an extra $1000-$2000 off that money and add to to my non-retirement savings before it's spent on the vinyl siding bill. If the market continues to go down and I lose 10% of it that's not a disaster. Yes, I have the discipline to sell when the time comes. I have 12 months interest free financing for this project and the clock on that started this morning. Every little bit helps. Leave it in the safe savings account and continue to add to it as is? Move it into SPY or SP500 fund? What do you think?

-Raymond

jIMOh · 07-18-2008, 02:31 PM

First- I grew up in Fairport not far from Rochester. Hope the North is treating you well.

Second- I would leave any money needed within 3 years in a cash based account. The 3% is not an issue (3% interest on savings). Losing 20-30-50% on SPY would be an issue. Think about worst case and because you have the money marked for a given expense at a specific time in a short maturity, I would leave money in liquid account as cash.

CitricAcid · 07-21-2008, 02:10 PM

With a short time frame similar to this one, I would leave it in the account. If it could be tied up, CDs are a potentially viable option, but with the more short-term goal of a year or so with the funds, I feel it would be more advisable to leave it in cash.

Kronk · 07-22-2008, 08:40 PM

Another one with ties to the Rochester area. DW and I are U of R grads. I spent a year after college working in Rochester -- downtown for a few weeks, then at Xerox in Webster, until the department shifted to an office in East Rochester. I was still getting confused about 390, 490, 590 (roads).

Sis and BIL live in Fairport. Nice town, cheap housing, cheap electric rates. We'll be there again at Christmas time.

Oh, and if you'd like to gamble with that money, then recognize that's what you're doing. Downside risk is probably more than the potential gain, IMO.

Darryl · 07-22-2008, 09:12 PM

Uh ditto jimoh citric & kronk

07-18-2008, 01:31 PM	#1
popowich Recycles dryer sheets Join Date: Jun 2008 Location: Rochester, New York Posts: 67	Risk Reward Hello, I'm 31, my retirement accounts are in good shape, but my near term savings have recently been spent on various home improvement projects including new windows last year and a $10,000+ vinyl siding project that was completed this morning. I nailed the last GOOG high selling at $590 providing me with $8000 toward the siding bill. It is currently sitting in a savings account earning 3% and getting $150 per paycheck ($300/month) automatically added to it. What do you think about moving this into SPY for the year and selling if there is a 10-20% pop along the way? Best case I'm looking to make an extra $1000-$2000 off that money and add to to my non-retirement savings before it's spent on the vinyl siding bill. If the market continues to go down and I lose 10% of it that's not a disaster. Yes, I have the discipline to sell when the time comes. I have 12 months interest free financing for this project and the clock on that started this morning. Every little bit helps. Leave it in the safe savings account and continue to add to it as is? Move it into SPY or SP500 fund? What do you think? -Raymond

07-18-2008, 02:31 PM	#2
jIMOh Thinks s/he gets paid by the post Join Date: Apr 2007 Location: Milford, OH Posts: 1,215	First- I grew up in Fairport not far from Rochester. Hope the North is treating you well. Second- I would leave any money needed within 3 years in a cash based account. The 3% is not an issue (3% interest on savings). Losing 20-30-50% on SPY would be an issue. Think about worst case and because you have the money marked for a given expense at a specific time in a short maturity, I would leave money in liquid account as cash. __________________ Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.

07-22-2008, 09:12 PM	#5
Darryl Recycles dryer sheets Join Date: Mar 2007 Posts: 335	Uh ditto jimoh citric & kronk __________________ Your focus determines your reality - Qui-Gon

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07-21-2008, 02:10 PM	#3
CitricAcid Full time employment: Posting here. Join Date: May 2008 Posts: 546	With a short time frame similar to this one, I would leave it in the account. If it could be tied up, CDs are a potentially viable option, but with the more short-term goal of a year or so with the funds, I feel it would be more advisable to leave it in cash.

07-22-2008, 08:40 PM	#4
Kronk Recycles dryer sheets Join Date: Aug 2005 Location: Philly 'burbs Posts: 323	Another one with ties to the Rochester area. DW and I are U of R grads. I spent a year after college working in Rochester -- downtown for a few weeks, then at Xerox in Webster, until the department shifted to an office in East Rochester. I was still getting confused about 390, 490, 590 (roads). Sis and BIL live in Fairport. Nice town, cheap housing, cheap electric rates. We'll be there again at Christmas time. Oh, and if you'd like to gamble with that money, then recognize that's what you're doing. Downside risk is probably more than the potential gain, IMO.

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