Cashed out from the bubble, now what?

[masayako]

Many Piggington reader cashed out before the housing bubble burst, including me.

Where do you invest your money now?

What do you think next bubble going to be?

As for myself, I did not put all the money in CD account. I have 60% in stock & bonds (federal tax free one), 1/3 in cash.

How about you?

[cashman]

I cashed out in Nov. ’05 and have all of it in CD’s and money market accounts, hence my handle “cashman”. Looking back, that was foolish as the stock market did really well during this period. But if I was afraid to commit money to the markets then, I’m terrified now. Perhaps I’m missing something, or the whole world has gone mad. I’ll be talking to Rich when he gets back from Europe. The problem I have, is that every time I’ve given money to a professional money manager, whether it be through a big brokerage firm or an independent, I’ve lost money. That’s why my money’s been parked in safe, low returning (around 5.5%), bank accounts. I, too, am open to suggestions.

[cashman]

I cashed out in Nov. ’05 and have all of it in CD’s and money market accounts, hence my handle “cashman”. Looking back, that was foolish as the stock market did really well during this period. But if I was afraid to commit money to the markets then, I’m terrified now. Perhaps I’m missing something, or the whole world has gone mad. I’ll be talking to Rich when he gets back from Europe. The problem I have, is that every time I’ve given money to a professional money manager, whether it be through a big brokerage firm or an independent, I’ve lost money. That’s why my money’s been parked in safe, low returning (around 5.5%), bank accounts. I, too, am open to suggestions.

[forsale_2007]

What we did.

1)2004:

Sold house and bought anotherplace in Carmel Valley with 20% down and 5.7% fixed 30 year loan.

Pocketed $400k and bought boring index funds Vanguard Total International, Vanguard Precious Metals, Vanguard Energy, Vanguard 500, Vanguard Large Cap, Vanguard Mid Cap, Vanguard Small Cap.

Also gave $100k to a financial advisor.

Left remaining funds in a short term corp bond that returned 6.05%

2)Beginning 2005:

Sold bonds, converted to Chinese currency.

Also bought a townhome in China.

Gave some money to a relative to speculate on the chinese stock market.

3)End of 2006:

Sold all of energy fund, sold 1/2 of precious metal, and 1/4 of international.

Converted more money into Chinese currency.
Increased positions in Vanguard 500 and Vanguard Growth Large Cap.

Created an educational fund for my kid. Bought term life insurance. Increased liability insurance and hired a lawyer.

4)This year (plan).

Sell total international to 1/2 original investment and buy more Large Cap Growth.

Bring rental income back from Chinese currency.

Wait for the Chinese gov to float the currency (any day now….Ok, maybe not….)

Possibly sell home in china.

Give an additional $100k to financial advisor (part of this from a forced stock option sale).

We thought about paying some more of that the mortgage. But it seems like so far, it doesn’t make sense to do this since we so far have been able to beat 5.7% each year. Also, we need as much tax deductions as we can get without being limited by AMT.

[forsale_2007]

What we did.

1)2004:

Sold house and bought anotherplace in Carmel Valley with 20% down and 5.7% fixed 30 year loan.

Pocketed $400k and bought boring index funds Vanguard Total International, Vanguard Precious Metals, Vanguard Energy, Vanguard 500, Vanguard Large Cap, Vanguard Mid Cap, Vanguard Small Cap.

Also gave $100k to a financial advisor.

Left remaining funds in a short term corp bond that returned 6.05%

2)Beginning 2005:

Sold bonds, converted to Chinese currency.

Also bought a townhome in China.

Gave some money to a relative to speculate on the chinese stock market.

3)End of 2006:

Sold all of energy fund, sold 1/2 of precious metal, and 1/4 of international.

Converted more money into Chinese currency.
Increased positions in Vanguard 500 and Vanguard Growth Large Cap.

Created an educational fund for my kid. Bought term life insurance. Increased liability insurance and hired a lawyer.

4)This year (plan).

Sell total international to 1/2 original investment and buy more Large Cap Growth.

Bring rental income back from Chinese currency.

Wait for the Chinese gov to float the currency (any day now….Ok, maybe not….)

Possibly sell home in china.

Give an additional $100k to financial advisor (part of this from a forced stock option sale).

We thought about paying some more of that the mortgage. But it seems like so far, it doesn’t make sense to do this since we so far have been able to beat 5.7% each year. Also, we need as much tax deductions as we can get without being limited by AMT.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Me I got a little over 10% in stocks (Not counting my 401K),
All this private LBO stuff really muddies the waters. Can’t figure whats going to happen next.

I guess they can’t throw credit at housing anymore so they throw it at stocks.

My true feelings are that the Government knows it cannot afford a true recession and will do anything (ANYTHING!!) to avoid it.

Between the bank bail outs and pensions going belly up.

What a mess.

Well good luck to you !!

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Me I got a little over 10% in stocks (Not counting my 401K),
All this private LBO stuff really muddies the waters. Can’t figure whats going to happen next.

I guess they can’t throw credit at housing anymore so they throw it at stocks.

My true feelings are that the Government knows it cannot afford a true recession and will do anything (ANYTHING!!) to avoid it.

Between the bank bail outs and pensions going belly up.

What a mess.

Well good luck to you !!

[NeetaT]

Don’t feel bad “cashman.” I’ve held a substantial amount in cash for the last 5 or so years while I watched in agony as real estate went up 200%, precious metals went up 500%, oil futures went up 600% etc. Now I feel as though everything has made it’s run. So now I continue to hold cash.

[NeetaT]

Don’t feel bad “cashman.” I’ve held a substantial amount in cash for the last 5 or so years while I watched in agony as real estate went up 200%, precious metals went up 500%, oil futures went up 600% etc. Now I feel as though everything has made it’s run. So now I continue to hold cash.

[waiting hawk]

Stock market is next bubble no doubt. To easily sum it up, record highs mean best economy we ever had? That’s a no brainer. Sold all in late 05 early 06 and have all in CD’s Money market.

[waiting hawk]

Stock market is next bubble no doubt. To easily sum it up, record highs mean best economy we ever had? That’s a no brainer. Sold all in late 05 early 06 and have all in CD’s Money market.

[cashflow]

Any good ideas on researching CD’s and where to get the best rates? We are in the same boat as all above and need to lock some in rather than let it sit in Money Markets? Also, how does everyone feel about the US banking system with all this foreclosure and subprime mess? Is anyone nervous of losing their cash…even if FDIC insured? Just curious….I just think anything could be possible.

[cashflow]

Any good ideas on researching CD’s and where to get the best rates? We are in the same boat as all above and need to lock some in rather than let it sit in Money Markets? Also, how does everyone feel about the US banking system with all this foreclosure and subprime mess? Is anyone nervous of losing their cash…even if FDIC insured? Just curious….I just think anything could be possible.

[NeetaT]

The below website might be a good option. You guys may have already ridiculed this one.

Prosper – Smart, simple tools for borrowing, saving & earning

[NeetaT]

The below website might be a good option. You guys may have already ridiculed this one.

Prosper – Smart, simple tools for borrowing, saving & earning

[Author]

Posts