44-Year-Old With $700K In Savings Grapples With Market Uncertainty

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

For those with significant savings, the struggle of deciding where to put their money to acquire the best returns is real. Options like building a business, purchasing an investment property or investing in an index fund like Vanguard‘s VOO or VTI all pledge exceptional benefits. Still, all come with different risks and strategies.

A 44-year-old Reddit poster with $700K to invest owns a home and a rental property with a $200K mortgage left to pay. Despite his strong financial position, he is crippled by fear of market instability and worries about buying into what investors see as a market peak.

“I am concerned about putting $700k into funds at this point as everything has gone up so much over the past few years and real estate seems to be slowing in Florida,” he wrote.

Don’t Miss:

His goals include maximizing long-term earnings while controlling risk, but he’s unsure when to enter the market. He’s considered DCA (Dollar-Cost Averaging) into Vanguard’s VOO or VTI but hasn’t decided yet.

Nevertheless, the 44-year-old’s investor questions for the r/financialplanning Reddit community revolve around whether to invest the lump sum or use DCA and how to balance his portfolio to control risk.

Redditors have shared their suggestions with the investor, so let’s analyze what they say in the thread’s comments section.

See Also: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.

Invest all the Money at Once

Many commenters highlighted the statistical edge of going with a lump sum of money compared to a smaller amount.

“Statistically, lump summing works better than dollar cost averaging. If you are doing the latter, the amount should be way higher than $1,500. This inaction has already cost you hundreds of thousands of dollars,” a Reddit member wrote.

When it comes to a large sum like this, the Redditors say that delaying investment could cost the 44-year-old substantial opportunity costs.

“Just move most of it at once. Dollar-cost averaging is what you do when you don’t have a bunch sitting there. You’ve literally already forgone probably several hundred thousand by not investing when you could have,” one comment reads.

A Redditor even proposed a portfolio strategy, mentioning that it is a good choice if the poster is afraid of market volatility.

“A 60/40 portfolio, when checking historical returns from 1994 – 2024 of VTI + BND, saw highs of 27% and lows of -16%. If you’re a conservative investor who can’t stomach losses, lump sum into this portfolio and rebalance annually,” the commenter says.

Trending: Commercial real estate has historically outperformed the stock market, and this platform allows individuals to invest in commercial real estate with as little as $5,000 offering a 12% target yield with a bonus 1% return boost today!

Diversify Whatever Investments You Choose

Several Redditors suggested the 44-year-old diversify his investments as it is a crucial method to minimize risks.

“Your concern is known as sequence risk (investing at a bad time). The risk can be lessened by investing a set amount or percentage at scheduled intervals. [ …] Maybe set a schedule for 4% to be invested every month for 25 months. Or 8.5% every month,” a commenter recommended.

A comment mentioned the investor’s existing portfolio and suggested that $700K in cash and $100K in stocks isn’t balanced.

“So in my opinion it’s good to consider various mid and long term economic possibilities and to diversify appropriately. But $700k in cash with $100k in the stock market doesn’t seem to be very balanced,” the comment reads.

While this particular Redditor considers DCA a smart move, he highlights the need to diversify whatever the investor decides to invest in.

“DCA is a smart strategy, but make sure you diversify whatever investments you choose. Personally, I’d buy some individual stocks and some core ETFs and for safety, keep some back in the HY savings fund,” the Redditor said.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

The changing interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.

For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga Readers: Earn a 1% return boost on your first EquityMultiple investment when you sign up here (accredited investors only).

Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.

This article 44-Year-Old With $700K In Savings Grapples With Market Uncertainty – ‘Should I Bet On Real Estate, Business Or Vanguard Funds?’ originally appeared on Benzinga.com

EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel