If you’re determined to trust “professionals”, I wouldn’t take what “a few people on the news” said as gospel. If they actually possessed the ability to predict the stock market / recessions, they wouldn’t be working in the news industry.
I also vote index fund, especially S&P 500 index funds (also called simply “500 funds”). Look for the lowest fees.
These have a large averaging effect, so you’re not subject to surprising events in specific corners of the market. Fees are the most predictable thing, so choose low ones.
Though, I assume you have eliminated debt, or at least unsecured debt for which the interest isn’t a deduction. If you have credit card balances, pay them off and cut the cards up.
OK–lets revise this.
I want a way for a dope like me to invest.
I need a better rate than a bank.
I know nothing, or little, about investment.
I have no debt, for any practical purpose.
Where can I park this dough, & do better than a money market fund?
Also, where can I buy Israel Development bonds, but not online?
Didn’t you get twenty-odd replies suggesting ways to invest? I think the most common suggestion was index funds. Did that help? Do you need help figuring out how to buy index funds? Do you need an explanation as to what they are?
(bolding added)
Bzzt! The 500 largest US companies based on market capitalization, not performance.
Now, a low performing stock may end up out of the index as it’s market capitalization falls, but that’s a side effect.
BTW, you mentioned wanting to buy Israeli bonds, but not online. Do you also want to invest not online? Because that complicates things. Most of the big providers (Vanguard, Fidelity, Schwab) are set up almost entirely for online investors. It’s a big reason they’re able to keep costs low.
…after one year.
Again, why don’t you like the answer of ‘low-cost index fund’ ? Unless you say why that is a bad solution for you, I don’t think anyone can give better advice.
Actually you can get your money back at any time. You have to wait for at least one year if you want to get the first year’s interest.
My “emergency fund” is in a 5-year CD. Even if I had to pull it all out right now to deal with an emergency, and take the accompanying penalty, I’ve already come out way ahead of where I would have if I had just left it in a savings account with the bank.
Do you already have a stock brokerage account? How does your $35k compare with your salary and other assets? If the sum is for a little adventure rather than your main hope for the future, I certainly wouldn’t worry about diversification. Pick one or two stocks and live it up!
It sounds like you’re pessimistic about stocks in the near-term. Don’t make an obvious Bear move like Puts or Short Sales. Instead pick a couple of stocks that are relatively resistant to recession and tariffs, perhaps CocaCola or Berkshire-Hathaway. Or buy an ETF that meets this objective. (These are NOT real recommendations, just examples of the type of stock that might appeal for one objective.)
Maybe. Page 2 of this pdf has a graph showing the correlation between returns on U.S. stocks and U.S. bonds over a 145-year period. From 1970 to 2000 the correlation was quite positive. Note that the present epoch is by far the longest stretch of negative stock-bond correlation. (The negative correlation during 1955-1965 is a distant 2nd.)
If inflation rises, I think neither stock- nor bond-holders will be pleased.
No.
And $35k is a little more than my annual salary
The reason I asked is that the practical matter of which brokerage offers services you want may enter into your decision. You’ll get access to different commission-free funds or even, perhaps, more exotic choices, depending on where you open an account. But I have no specific recommendation to offer.
I would invest half of it in low risk mutual funds and then take the other half over to my friend Assadulah who works in securities…
And you might want to check out Bogleheads.
I would also look at your debt. If you have any debts that are in the 6% or higher range for interest, it might be a better idea to pay off that debt, then be DISCIPLINED and put what you would have paid on the debt into the funds suggested. Dollar cost averaging (putting a little in at regular intervals no matter what the market does) has a tendency to smooth out market highs and lows.
You still haven’t said what you’re saving for, so I’m going to guess it’s for retirement or other lack of employment.
Since you’re asking an online message board for opinions, you shouldn’t have a problem with an online stock broker. While obviously we are just text and you don’t want your personal financial information stolen, worrying about that sort of thing is kinda like worrying that you’re going to be in a car accident. It happens, there are steps you can take to make it less likely, and there’s not much sense in worrying about it beyond taking those precautionary measures. Stick with one of the biggest names in the industry, and they’ll definitely have you covered in terms of security. I do my investing with Schwab, but from what I can tell Vanguard has pretty much the same thing: proprietary index funds covering a number of different market segments that are extremely low cost (like .05%/yr or less) that are available without transaction fee. I do everything online, and only get paper items sent to me when I buy non-Schwab funds that for some reason require me to receive pieces of paper with information on them that I could easily have been given a pdf for.
If you just want to set it and forget about it, you could try a retirement target-date fund. There’s ones offered in 5-year increments based on when you expect to stop working. They have slightly higher fees as they actively reposition themselves based on the time to retirement and generally only hold positions in other funds and so pay their fees as well, but they mean you don’t have to worry about how to allocate things. You do get a one-size-fits-most approach, but if you don’t want to have to deal with managing things and want the lowest cost way to get people to do it for you, those retirement target-date funds are good. Vanguard Target Retirement Funds | Vanguard https://www.schwab.com/public/schwab/investing/accounts_products/investment/mutual_funds/mutual_fund_portfolio/target_funds
As to getting your money out, with mutual funds you generally have to wait 3 months or you get hit with an early redemption fee. With ETFs, you buy and sell on the market and can get out in the middle of the day if you want, instead of having to put in an order for mutual funds that doesn’t settle until the end of the day. ETFs, however, like stocks, have a bid/ask spread - if you want your order to execute immediately, you’ll pay more if you’re buying than you’d get if you were selling. You could say “I only want to buy at X price” but you run the risk of it not falling down in price enough for someone to want to sell it to you for that price, and the entire reason you’re buying is because you think it’ll go up in price, so you probably should take what’s offered if you’re interested in investing in it. The opposite is true when you sell, so the round trip buy and sell will cost you a slight fraction of your investment even if there are no explicit transaction fees. With Mutual funds, your order settles at the end of the day (if placed early enough before close), at the same price whether you’re buying or selling.
If you are nervous about losing a significant portion of your portfolio to a down-turn in stocks because you might need it due to lack of work which is brought on by such a down-turn and thus can’t leave it in for when the market comes back around, then just consider buying CDs (certificates of deposit). Yes, you could get a short-term bond fund that doesn’t have much exposure to interest rates and has all high quality debt, but it won’t pay much and there’s no guarantee that you’ll get your money back still like there is with FDIC insured bank deposits (OK, the FDIC might default on its obligation there, but I think we’re all screwed if that scenario plays out). Divide your inheritance into 12 parts, and every quarter (3 months) put one part into a 3-year CD. That way you’ll have a few thousand dollars available every 3 months without penalty, and can still access most of the money before that by taking an early withdrawal, while earning the 3-year rate on a CD. You’ll be covered by FDIC insurance and so won’t have to worry about a huge economic downturn causing whoever you loaned your money to to default. Schwab offers the ability to buy CDs from banks all over the place; I don’t know about any other online brokers. You could also go to your local bank and ask them about setting up a CD ladder as I mentioned, which might have the benefit of automatic renewal if you don’t give them notice, something that doesn’t happen if you buy your CD through Schwab, so you don’t have to worry about taking the time to reinvest it. You’ll probably get a better rate through a broker though. CDs though are the lowest-paying instruments there are; only the time deposit feature really generates any return, as there’s no risk of losing your money. No risk, no reward.
Bosda, based on the amount of good advice that you’ve been given, and your reluctance to accept it, I STRONGLY recommend getting an advisor. An advisor won’t help you “beat the market”, they will help you from making rash and terrible decisions. Rash and terrible decisions cost a whole lot more than 1% a year.
This.
How to pick a good advisor?
Even if you’re prepared to give up a large chunk of your potential returns, this cannot possibly make sense for this amount of money. 1% is a huge amount to give up, but 1% of $35k is only $350. What quality of personalized advice do you think you are going to get for that?
If you want some sound advice and you don’t want to listen to the free advice on here, read Bogleheads.
ETA: OP still hasn’t answered he question he has been asked several times. What is the money for? Unless OP tells us the investment objective, it’s impossible to give appropriate advice.