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If SPY is too scary for the OP, than he shouldn't be in the stock market lol
A lot of people SHOULDN'T be in the market. They don't have the stomach for it. Better they find that out BEFORE they put an appreciable amount of their money at risk!
If the OP was cut out for investing he wouldn't have 100k in cash because it would have found it's way into the market.
Not necessarily. We don't know how he got that money, or how long he's had it. It could be from an insurance settlement, or an inheritance, or some other event that generated a one-time lump-sum profit. (Besides, the OP's first post implies he already does have some money invested in SPY.)
If SPY is too scary for the OP, than he shouldn't be in the stock market lol
I disagree. OP could use a balanced fund or one that is easier on the nerves (like Wellesley or Wellington). Wellington returns an average of nearly 8% per year. There are many flavors to investing and it doesn't have to be all high risk/high reward.
I believe that within a year that we may have a Minsky moment as this world seems to grow crazier more and more each day. https://en.wikipedia.org/wiki/Minsky_moment
These cheap interest rates and the 1%ers who have more dollars than sense will cause a collapse.
I keep hearing how Wall Street wants to be able to short cryptocurrencies.
Wait until a whale does a huge naked short and there's a margin call.
You'll probably be able to hear the money being sucked out of the investment banks as there will be no one left to cover the losses. It's going to be bigger then 2008 with the mortgages
But, it might be something that's also become reckless and the market greed goes to critical mass as the madness of crowds pour their money into a can't lose investment.
Then again, marijuana sales are generating huge amounts of money that needs to be laundered.
Hopefully the Fed slows this market down to a gentle landing so we don't have these boom/bust "Minsky Cycles" that they call business cycles but we all know is the way of sweeping as much money from the middle class table that they can and then leave the taxpayers via the government to clean up the mess.
This times it's up in the trillions.
It might take a lot more then the last time of quantitative easing to get the economy going the next time.
But then again, it's only dollars !
Easy money for some, for the others, it's hard earned cash.
Being allocated according to your risk profile, age, and time horizon to retirement is imperative in determining how much to invest in the market.
Someone 20 to 40 years old can absorb more risk and volatility in general than someone 60 who is just entering retirement.
If you're feeling nervous about how much you have invested, then use that as a sign to reduce your equity exposure. You don't have to go to zero equities and actually shouldn't. But consider reducing equities to maybe 50% - 60% and see if that allows you to sleep at night. If that's still too high, then drop to 40% or thereabouts. And if you're at the point that you're hyperventilating, anticipating the sky falling, and whatever else you can imagine then reduce your equity exposure down to 25% to 30% equities and put the other 70% to 75% into a combo of fixed income instruments (bond funds, treasuries, CDs, TIPS).
Part of being a human who invests is being truly honest about your ability to withstand a large market drop that lasts for a few years. It's okay to be more conservative. Just be in the market to some extent and when you can sleep through the night then your allocation is right for you.
Most importantly: don't allow anyone to make you feel bad or wrong for taking a moderate allocation. Do what you need to do so that you won't panic when a drop happens for whatever reason.
I went ahead and invested the $100k in VOO, put in my buy order this morning. Since 2010 i've followed people who said market was crashing imminently, missed out a lot of the market so i'm taking a different approach now.
I'm 43 so I still have time. I don't see any big triggers to cause a massive crash for at least the rest of 2018 barring a huge geopolitical event such as NoKo. But I think little Kim is not in a mood to launch an attack, it's a very small chance especially since he has accepted a peace talk with SoKo recently. The US economy has momentum and the lower tax rates and possible money coming back via repatriation resulting in increased earning or share buy backs can only be positive.
Strategy is to hold for a year then re-evaluate, i'm confident the year will end higher than today even if modestly. The only wildcard I see are the mid terms but that is a long way off in Nov. Infact, I think a Democrat majority win in November may crash the market imo because it will all but signify anti-business policies the Democrats are famous for.
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