What to invest $100,000 in for a year?

[rileyswa]

We have $100,000 in the bank and want to invest for some return for 1-2 years. Suggestions of a fund? I've been rec'd DODIX, VWINX and VWIAX. Others? Best?

 

[pb4uski]

How much risk are you willing to take that after a year you may have less than $100,000? Would you be wiling to risk having less than $100,000 a year from now?

 

[rileyswa]

What to invest $100,000 in for a year

Hum, probably not. I just don't like making NOTHING on it sitting in my bank account. That's why a MF was recommended. But I know there are brokerage fees, commissions, and ER to pay, so trying to balance all for best ROR.

 

[aja8888]

Hum, probably not. I just don't like making NOTHING on it sitting in my bank account. That's why a MF was recommended. But I know there are brokerage fees, commissions, and ER to pay, so trying to balance all for best ROR.

Mutual fund NAV can go up or down with the volatility of the stock or bond market. There is no guarantee that you would have more than $100K after a year or two.

 

[RxMan]

I know Citibank is offering 0.70% for their online savings account right now. Unfortunately you won’t get much more out of a 12 month CD- maybe 0.75%-0.80%. Yields are low for the safe haven choices and I’d argue a one year time horizon is too short to invest in stocks or bonds. Good luck, there’s not a lot of good options for short term investing.

 

[Koolau]

What % of your portfolio is that 100K? (Don't answer here, just to yourself.) Is that so much of your portfolio that it could make a significant difference EITHER by letting it sit at piddly interest OR by "risking" it in some other investment. Personally, I keep a big chunk (numerically) in cash so I never have to worry about raiding an "up" or "down" investment. Definitely YMMV.

 

[DrRoy]

A fund will have principle risk. Perhaps a two year bond?

 

[pb4uski]

Hum, probably not. I just don't like making NOTHING on it sitting in my bank account. That's why a MF was recommended. But I know there are brokerage fees, commissions, and ER to pay, so trying to balance all for best ROR.

Then I'd forget about DODIX, VWINX and VWIAX... its quite possible to have a loss in a short one-year time horizon with those funds.

If you want no credit or interest rate risk then you're looking at 1-year CDs or online savings accounts... but will be below 1%. If you qualify for membership, Navy Federal is offering 0.85% on a 1-year CD with a $100k deposit. There's no free lunch. Also see https://www.early-retirement.org/fo...-2020-please-post-updates-here-101376-20.html

If you don't mind taking on a bit of credit risk, Toyota Motor Credit Corp IncomeDriver Notes are offering 2%. Also see https://www.early-retirement.org/forums/f28/non-fdic-deposit-account-programs-105827.html

 

[DuluthGA]

My church uses Wesleyan investment foundation For excess cash.
As they are NOT FDIC they appear to keep a large cash balance to meet any withdrawals. Pay 2% on over $35k balances.

 

[camfused]

T-Mobile is another way to go: https://www.t-mobilemoney.com/en/home.html
Pays 1% and is FDIC insured.

 

[24601NoMore]

Agree with pb4uski and others..any mutual fund you invest in outside of a Money Market fund will have principal risk, and the value of your $100K may be more or less (or the same, although that's unlikely) 1-2 years out.

We have the same problem you do - CDs that matured and now nowhere to put the cash - but unless you're willing to accept risk, there are for the most part no good options on where to put the $$s north of 1% at best - and even that's a stretch.

ETA - I looked up VWIAX's worst 1-year return, and it appears that was the 12 months ending 2/3/19. For that period, VWIAX was down 9.79%. DODIX (having no equities) fared better at -0.59%, but there's no guarantee it can't or wouldn't do worse in the future..

The 3 funds you mentioned are great funds and some of my favorites, but will fluctuate in value daily - as will every other fund with either equities or fixed income in it's portfolio..

 

[Chuckanut]

If you will need the full $100,000 in the next year or two, then put it into an Federally insured savings account with a bank like Ally that is paying 0.6% or less. Then Grin and Bear It.

 

[armor99]

We have $100,000 in the bank and want to invest for some return for 1-2 years. Suggestions of a fund? I've been rec'd DODIX, VWINX and VWIAX. Others? Best?

In that timeframe to make any money at all, would mean you would have to take significant risk at loosing some of it. If you say 5-10 years, the answer might be mutual funds...

 

[Koolau]

If you will need the full $100,000 in the next year or two, then put it into an Federally insured savings account with a bank like Ally that is paying 0.6% or less. Then Grin and Bear It.

I'm sure it's just the old codger orneriness in me that says if they're only gonna pay me 0.6% while they get to lend it out at 3 1/2% and maybe some of it at way MORE, depending, I'll just put it in my checking account which pays nothing but helps local folks borrow. Yeah, I know, cutting off my own nose, etc. etc. Nice to be in that time of life (and time of "plenty") that I can think that way without much concern for my financial situation. I don't recommend it because YMMV.

 

[nwsteve]

Was on Ally website today and they have a new 15 mon CD at .7%. Not great but a smingin better than their .6% on their saving account.

 

[pb4uski]

^^^ and locked in for a year where it is unclear if online savings rates have bottomed out or not.