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Old 08-15-2011, 07:29 AM   #1
Thinks s/he gets paid by the post
Join Date: Dec 2010
Location: California
Posts: 1,002
Suggestions / feedback on ......

I started a cash out refi on my primary home 30 days ago and they are ready to close next week.

It's a 5 year ARM, resets every 5 years, 3% interest rate, about $800 in closing cost, monthly payment of $760 ($450 interest, $310 principal pay down to start).

I was going to use the $$ to purchase another short sale investment rental property in cash but the deal fell thru. I will look for another deal passively as I was informed that my job was eliminated 2 weeks ago. Severance will carry me to the end of Nov, then unemployment and emergency fund areready if I'm unable to secure new employment.

Question - Looking for suggestions on, what should I do with the cash for now, i.e. holding period of 3 , 6, 9 months?

A. Online savings account, rate at 1.01%
B. Short-Term Investment- Grade (VFSTX), SEC yield @ 1.55%
C. Total Bond Market Index (VBMFX), SEC yield @ 2.35%
D. Wellesley Income (VWINX), SEC yield @ 3.26%
E. Cookie jar as the sky is falling!!!

Thank for your feedback.


Moderator edit: this thread was relocated to "FIRE and money because it is a request for investing advice
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Old 08-15-2011, 09:18 AM   #2
gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Just a comment on Wellesley; although DW/I hold a good portion and look at it as a long term dividend producer (generates a check every three months), the value of shares (which you would be selling) has dropped recently, in the short term.

While I/DW do hold the fund for long term income, I don't believe that it would suit your needs for a short-term holding, that is also safe from equity/bond flux.

If it was me, for a short term (as your minimum is of 3 months) I would put it into the safest form you can get. Don't worry about return/yield. That is for another situation. I would go with the savings account...

Just my simple POV/opinion ...
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