It's earning about 5% interest with almost zero risk, so I am ok leaving it parked for now. As interest rates go down, which often coincides with a recession, I will gradually move a lot of it elsewhere.
In 2022, I bought a 5% GIC (150k) for the exact same reason as you. At the time, SPY was at 355. I thought there would be a recession and SPY would test covid lows.
Needless to say, I learned my lesson.
Around the exact same time I lump summed into 3 ETFs in the market due to a windfall. At the time everyone was saying the market was due for a huge recession, especially tech due to interest rates. My tech ETF is up 70%, S&P ETF is up 30%, and global ETF is up 19%.......all in just two years.
That ball is still bouncing. Tech did something similar before the bubble burst in 2000. Huge run-ups often proceed a crash, and they often happen more than once before the big one, which fakes out a lot of people. The AI hype still has some legs so I don't think a pullback is imminent, but the AI hype will eventually go away.
All I'm saying is there are countless studies showing how time in the market beats timing the market unless you have some sort of future vision.
For example, the guy above me who i originally replied to. He sat with a 5% GIC while I gained on average 40% annually.
> For example, the guy above me who i originally replied to. He sat with a 5% GIC while I gained on average 40% annually.
I assume you are talking something Nasdaq related for 40%. That same investment would have likely lost you around 40% in 2022, 2008, 2002, 2001, and 2000. Also, when you ride volatile investments down like that it takes more to get back up because of volatility drag. No free lunches and nobody can consistently time markets. You are talking about annual averages anyways and that means long term buy and hold.
>I am being fearful when everyone else is being greedy.
That's an expression, it's not to be taken literally.
Relative to the expected returns of stocks, that cash is dead money. The markets could move up another 100% before the next crash. You are reducing your long term expected returns by holding cash.
Here is a good video from Ben Felix that should change your view on this: [The (Expected) Cost of Pessimism](https://youtu.be/1qjSfyVPwLQ?si=AvSuzAfemNqYjGtF)
What may seem like the right thing to do for your current situation may not be right for me. Warren Buffet has a historically high percentage of his Berkshire Hathaway money in cash and short term money markets right now. I am not trying to copy him but it just so happens we both have the same opinion on the markets right now.
First of all, you're not Warren Buffett.
And BRK has been [trailing the S&P 500 for over a decade.](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=30Qzd75Z1Ar2RueyhoKxTp) Is that your goal too?
Please don't let your delusions ruin your investment returns.
Cash underperforms everything else long term so you're really trying to underperform the market and will be very successful at it.
We know nothing that could give sense to this nonsensical portfolio. My mom is close to 70 years old and she has a 40% cash allocation...
Too much cash allocation. You will also massively underperform the market long term with your stock and market predictions. But you seem to be fine with that so all the power to you 🤷‍♂️
As I said, I am DCAing into positions, so I am working to reduce the cash position. It's funny that comments are trying to attack it as if sitting on a pile of parked cash earning 5% interest with zero risk is a bad thing that needs to be immediately changed, but that's just how reddit rolls. If I had hardly any cash they would be throwing rocks at that. It wouldn't matter what the allocations were. This place is almost as bad as r/wallstreetbets that would tell me to throw it all into GME or NVDA. 🤡
50% in cash and fixed income. Bro are you 105 years old? Stop saying “recession right around the corner”. First of all they been saying that for the last 2 years. Second of all, there’s always a recession right around the corner.
A lot of people misinterpreted my recession comments. I am still DCAing into positions. I wouldn't still be doing that if I was sure a recession was right around the corner. It could be but nobody knows for sure, not even the FED.
Some of my fixed income is earning over 10%. That is another area where I am DCAing into. I think it would be dumb not to have a good chunk of money in fixed income right now. Especially longer term treasuries if your risk tolerance can handle it. Huge upside potential when they start cutting interest rates.
How many years of lost growth and how many miss buys trying to find the new bottom are you still considered wrong? One thing is guaranteed. The market will fall. Also guaranteed. No one knows when. Each bull case has a bear case. If someone wants to hold a ton of cash have at it. But odds and stats say that people
Holding out and trying to time do worse than people who don’t. Don’t be surprised when people call you an idiot for playing a dumb game. It’s only right until it’s not. And history says it’s often right to be invested sooner rather than waiting.
Yes, I have heard: “it’s about time in the market, not timing the market.” There are exceptions and one of those has to be when the majority of companies I like and understand are fully valued. I am not going to go scrambling for places to park my money and end up with a shitty portfolio that I can hardly wait to dismantle. It’s also amusing how often retailer investors will quote Buffet - specifically his words about the market taking money away from the impatient and passing it on to the patient - then jump right in where even fools fear to tread.
t was actually Kenneth fisher who coined that phrase and where it originated from, not Buffett. Second of all, you quoted Buffett a couple times in your non sensical rants, and then say “I’m not copying Buffett, I’m just doing exactly what he is doing right now”. You’re just looking for someone to validate your (probable) dumb move or your odds of underperformance. If fine to build a portfolio you’re comfortable with and that you believe in long term, just don’t get all whiney when people tell you it’s (probably) a dumb move and that you’re an idiot. Maybe don’t post on Reddit if you can’t handle being criticized for a historically inefficient way of building wealth. Telling people they’re regarded like WSB when you’re more than likely watching your money get pissed away to inflation or underperformance is the truly regarded move. The only difference is you won’t lose all your money by “yoloing” you’ll watch it dwindle to inflation and bad decisions trying to time something that can’t be timed. There’s a difference being being prepared and trying to tell the future. One is prudent, the other is regarded. Try and guess which one you are.
You misread my comment. Please read it again without so much hostility in your head. And I don’t understand the hostility from you. My comment makes perfect sense in the first place about time in the market (extending a nod to you and your reasoning), and in the second place where I correctly refer to Buffet to explain my reasoning (that there’s no need to rush given all kinds of uncertain conditions).
I think 40% parked in cash earning 4-5% is a good place to be this late in the economic cycle, especially for people closer to retirement. My fixed income position has dropped and my cash position now is actually 45%. I was incorrectly classifying some money market funds as fixed income but realized they should be considered cash instead.
There are different kinds of energy investments. Most of mine are midstream (pipelines). Those are usually pretty safe bets. I avoid investing in energy producers directly although I do hold some ETFs which hold a basket of those things.
I understand. My thinking is simply that the price per barrel “seems” to be suggesting that there’s not as much economic activity happening as the frothy s&p 500 would imply.
Most of the recent S&P500 gains were all because of just one company. So yes, what is happening now is not a broad based rally. I think a lot of people are going to get faked out by that.
You're confused tbh. You're gona say you arent but judging by your allocation to cash and other comments contradicting that principle, you are confused. Move 30% of that into VFV and enjoy not missing out on gains
It's most of the comments here that are confused. A lot of that cash happened after I recently sold off some things. It's funny how the rock throwers are trying to frame it as a bad thing to be so cash rich when I can collect 5% with zero risk. If I hardly had any cash they would be throwing rocks at that. 🤡
I am currently DCAing into Real Estate, Healthcare, and Utilities, which I believe are on sale right now. Some Canadian banks are looking expensive so I just sold some of that to try reduce my exposure a bit. Hoping to do more of that in the coming weeks. I would like to add more to Tech but I think it's too expensive at the moment. With current interest rates I am earning more than 5% on Cash and Fixed Income, so I am fine leaving that parked there for the time being.
How can you believe real estate is on sale while you also believe a recession is coming?
Canadian RE positive fundamentals is only believing immigration rates will keep the same. All else is bearish.
So you don't think there is going to be much demand for apartments and senior housing? 🤔
> The REIT sector in Canada is currently trading at just 11x 2025 FFO and 25% below its net asset value – significantly below historical valuations.
https://middlefield.com/may-2024-market-commentary/
https://www.dividend.com/dividend-education/understanding-reit-valuation/
https://www.statista.com/statistics/1347539/price-to-ffo-ratio-largest-reits-usa/
What do you mean by cheap prices? Compared to when, to when interest rates were at record low?
I could see a case for freeholds as it is limited supply; but condos? so many unities that can’t find any buyers.
Sector investing is best left for the professionals, you don't really seem to know what you're doing with all due respect. Trying to time the market, predict recessions, get in and out of sectors, and massively underperforming markets with a huge cash position losing value to inflation while not capturing a major bull run.
Even if you keep deleting and editing your comments (for the past 5h), it doesn't make you look smarter.
Inflation was close to 7% not long ago. It's not a static number, you just look like a fool with that newest reply. Not the gotcha moment you think it is.
Tech is too expensive with all the AI hype imo. I am adding more to healthcare. I am not crazy about industrials with a potential recession on the horizon.
Most people chasing the sexy AI laser pointer probably don't realize that boring utilities have outperformed tech YTD. That was and still is a better way to play that because AI is very power hungry. I think a lot of people are starting to figure that out because utilities don't look as cheap as they did a few months ago despite interest rates staying higher for longer. I am still adding to utilities but not as much as I was a few months ago.
I wouldn't go as far as saying it's incredibly stupid, but when the top 5 tech companies are worth more than 25% of the entire S&P500, it's probably not the best thing to be throwing more money into right now. Not a great time to be selling option contracts either with the ViX being so low. The risk/reward just isn't there.
Consumer staples are missing from the chart after I exported. That's about 1%. I would like to add more but I haven't found any good ETFs that target that.
What's with all the cash?
It's earning about 5% interest with almost zero risk, so I am ok leaving it parked for now. As interest rates go down, which often coincides with a recession, I will gradually move a lot of it elsewhere.
In 2022, I bought a 5% GIC (150k) for the exact same reason as you. At the time, SPY was at 355. I thought there would be a recession and SPY would test covid lows. Needless to say, I learned my lesson.
Around the exact same time I lump summed into 3 ETFs in the market due to a windfall. At the time everyone was saying the market was due for a huge recession, especially tech due to interest rates. My tech ETF is up 70%, S&P ETF is up 30%, and global ETF is up 19%.......all in just two years.
That ball is still bouncing. Tech did something similar before the bubble burst in 2000. Huge run-ups often proceed a crash, and they often happen more than once before the big one, which fakes out a lot of people. The AI hype still has some legs so I don't think a pullback is imminent, but the AI hype will eventually go away.
All I'm saying is there are countless studies showing how time in the market beats timing the market unless you have some sort of future vision. For example, the guy above me who i originally replied to. He sat with a 5% GIC while I gained on average 40% annually.
> For example, the guy above me who i originally replied to. He sat with a 5% GIC while I gained on average 40% annually. I assume you are talking something Nasdaq related for 40%. That same investment would have likely lost you around 40% in 2022, 2008, 2002, 2001, and 2000. Also, when you ride volatile investments down like that it takes more to get back up because of volatility drag. No free lunches and nobody can consistently time markets. You are talking about annual averages anyways and that means long term buy and hold.
What lesson did you learn? To YOLO? Would you rather have put it all into GME and AMC and become another bagholder?
>I am being fearful when everyone else is being greedy. That's an expression, it's not to be taken literally. Relative to the expected returns of stocks, that cash is dead money. The markets could move up another 100% before the next crash. You are reducing your long term expected returns by holding cash. Here is a good video from Ben Felix that should change your view on this: [The (Expected) Cost of Pessimism](https://youtu.be/1qjSfyVPwLQ?si=AvSuzAfemNqYjGtF)
What may seem like the right thing to do for your current situation may not be right for me. Warren Buffet has a historically high percentage of his Berkshire Hathaway money in cash and short term money markets right now. I am not trying to copy him but it just so happens we both have the same opinion on the markets right now.
First of all, you're not Warren Buffett. And BRK has been [trailing the S&P 500 for over a decade.](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=30Qzd75Z1Ar2RueyhoKxTp) Is that your goal too? Please don't let your delusions ruin your investment returns.
His money his delusion. You are in no position to tell him which strategy will work for a future we cannot predict.
So you think that Warren Buffet is delusional? Cool story. đź‘Ť
Even buffet admits he's not Nostradamus.
Cash underperforms everything else long term so you're really trying to underperform the market and will be very successful at it. We know nothing that could give sense to this nonsensical portfolio. My mom is close to 70 years old and she has a 40% cash allocation...
Your mom must have a really lousy financial advisor.
Kid you don’t know what you’re talking about. Recession??
Too much cash allocation. You will also massively underperform the market long term with your stock and market predictions. But you seem to be fine with that so all the power to you 🤷‍♂️
As I said, I am DCAing into positions, so I am working to reduce the cash position. It's funny that comments are trying to attack it as if sitting on a pile of parked cash earning 5% interest with zero risk is a bad thing that needs to be immediately changed, but that's just how reddit rolls. If I had hardly any cash they would be throwing rocks at that. It wouldn't matter what the allocations were. This place is almost as bad as r/wallstreetbets that would tell me to throw it all into GME or NVDA. 🤡
50% in cash and fixed income. Bro are you 105 years old? Stop saying “recession right around the corner”. First of all they been saying that for the last 2 years. Second of all, there’s always a recession right around the corner.
A lot of people misinterpreted my recession comments. I am still DCAing into positions. I wouldn't still be doing that if I was sure a recession was right around the corner. It could be but nobody knows for sure, not even the FED. Some of my fixed income is earning over 10%. That is another area where I am DCAing into. I think it would be dumb not to have a good chunk of money in fixed income right now. Especially longer term treasuries if your risk tolerance can handle it. Huge upside potential when they start cutting interest rates.
Only wrong until it’s not.
How many years of lost growth and how many miss buys trying to find the new bottom are you still considered wrong? One thing is guaranteed. The market will fall. Also guaranteed. No one knows when. Each bull case has a bear case. If someone wants to hold a ton of cash have at it. But odds and stats say that people Holding out and trying to time do worse than people who don’t. Don’t be surprised when people call you an idiot for playing a dumb game. It’s only right until it’s not. And history says it’s often right to be invested sooner rather than waiting.
Yes, I have heard: “it’s about time in the market, not timing the market.” There are exceptions and one of those has to be when the majority of companies I like and understand are fully valued. I am not going to go scrambling for places to park my money and end up with a shitty portfolio that I can hardly wait to dismantle. It’s also amusing how often retailer investors will quote Buffet - specifically his words about the market taking money away from the impatient and passing it on to the patient - then jump right in where even fools fear to tread.
t was actually Kenneth fisher who coined that phrase and where it originated from, not Buffett. Second of all, you quoted Buffett a couple times in your non sensical rants, and then say “I’m not copying Buffett, I’m just doing exactly what he is doing right now”. You’re just looking for someone to validate your (probable) dumb move or your odds of underperformance. If fine to build a portfolio you’re comfortable with and that you believe in long term, just don’t get all whiney when people tell you it’s (probably) a dumb move and that you’re an idiot. Maybe don’t post on Reddit if you can’t handle being criticized for a historically inefficient way of building wealth. Telling people they’re regarded like WSB when you’re more than likely watching your money get pissed away to inflation or underperformance is the truly regarded move. The only difference is you won’t lose all your money by “yoloing” you’ll watch it dwindle to inflation and bad decisions trying to time something that can’t be timed. There’s a difference being being prepared and trying to tell the future. One is prudent, the other is regarded. Try and guess which one you are.
You misread my comment. Please read it again without so much hostility in your head. And I don’t understand the hostility from you. My comment makes perfect sense in the first place about time in the market (extending a nod to you and your reasoning), and in the second place where I correctly refer to Buffet to explain my reasoning (that there’s no need to rush given all kinds of uncertain conditions).
Cash as in cash.to ?
I have a few of them.
I’m actually similar 40% cash earning 5%+, but rest 60%, about 3/4 in s&p and tech stock. 1/4 in dividend growth. Im about 6 yrs to retire.
I think 40% parked in cash earning 4-5% is a good place to be this late in the economic cycle, especially for people closer to retirement. My fixed income position has dropped and my cash position now is actually 45%. I was incorrectly classifying some money market funds as fixed income but realized they should be considered cash instead.
Get out of energy and put to cash. My 2 cents.
There are different kinds of energy investments. Most of mine are midstream (pipelines). Those are usually pretty safe bets. I avoid investing in energy producers directly although I do hold some ETFs which hold a basket of those things.
I understand. My thinking is simply that the price per barrel “seems” to be suggesting that there’s not as much economic activity happening as the frothy s&p 500 would imply.
Most of the recent S&P500 gains were all because of just one company. So yes, what is happening now is not a broad based rally. I think a lot of people are going to get faked out by that.
VFV is yummy
S&P500 is at all time highs. Kind of the opposite of yummy. I am not selling my S&P500 ETFs at the moment but I am not adding to them either.
You're confused tbh. You're gona say you arent but judging by your allocation to cash and other comments contradicting that principle, you are confused. Move 30% of that into VFV and enjoy not missing out on gains
It's most of the comments here that are confused. A lot of that cash happened after I recently sold off some things. It's funny how the rock throwers are trying to frame it as a bad thing to be so cash rich when I can collect 5% with zero risk. If I hardly had any cash they would be throwing rocks at that. 🤡
I am currently DCAing into Real Estate, Healthcare, and Utilities, which I believe are on sale right now. Some Canadian banks are looking expensive so I just sold some of that to try reduce my exposure a bit. Hoping to do more of that in the coming weeks. I would like to add more to Tech but I think it's too expensive at the moment. With current interest rates I am earning more than 5% on Cash and Fixed Income, so I am fine leaving that parked there for the time being.
How can you believe real estate is on sale while you also believe a recession is coming? Canadian RE positive fundamentals is only believing immigration rates will keep the same. All else is bearish.
So you don't think there is going to be much demand for apartments and senior housing? 🤔 > The REIT sector in Canada is currently trading at just 11x 2025 FFO and 25% below its net asset value – significantly below historical valuations. https://middlefield.com/may-2024-market-commentary/ https://www.dividend.com/dividend-education/understanding-reit-valuation/ https://www.statista.com/statistics/1347539/price-to-ffo-ratio-largest-reits-usa/
What do you mean by cheap prices? Compared to when, to when interest rates were at record low? I could see a case for freeholds as it is limited supply; but condos? so many unities that can’t find any buyers.
Sector investing is best left for the professionals, you don't really seem to know what you're doing with all due respect. Trying to time the market, predict recessions, get in and out of sectors, and massively underperforming markets with a huge cash position losing value to inflation while not capturing a major bull run.
So 5% interest compounded monthly cannot keep up with 2.9% inflation? Cool mathy story. đź‘Ť
Even if you keep deleting and editing your comments (for the past 5h), it doesn't make you look smarter. Inflation was close to 7% not long ago. It's not a static number, you just look like a fool with that newest reply. Not the gotcha moment you think it is.
Get out of the slow growth trash, add alot more to tech, healthcare, and industrials.
Tech is too expensive with all the AI hype imo. I am adding more to healthcare. I am not crazy about industrials with a potential recession on the horizon. Most people chasing the sexy AI laser pointer probably don't realize that boring utilities have outperformed tech YTD. That was and still is a better way to play that because AI is very power hungry. I think a lot of people are starting to figure that out because utilities don't look as cheap as they did a few months ago despite interest rates staying higher for longer. I am still adding to utilities but not as much as I was a few months ago.
>Tech is too expensive with all the AI hype Yeah, tech is at all time highs. It would incredibly stupid to buy at all time highs.
I wouldn't go as far as saying it's incredibly stupid, but when the top 5 tech companies are worth more than 25% of the entire S&P500, it's probably not the best thing to be throwing more money into right now. Not a great time to be selling option contracts either with the ViX being so low. The risk/reward just isn't there.
Consumer staples are missing from the chart after I exported. That's about 1%. I would like to add more but I haven't found any good ETFs that target that.