I'm a total dumbass. I've let a pretty large chunk of cash build up in a HYSA since 2017. It started because I was planning on buying some more rental property and this was meant to be a down payment. I never bought anything, so I figured I would just hold the cash out of the market for the correction I thought was for sure coming and then dump it all into the S&P 500 or buy more rental property. With the fed juicing the market and cutting rates again, the correction I thought was coming never came. What's worse is the HYSA rates have dropped from around 3% to 1.8%. Now, I'm stuck with this pile of under-performing cash that I want to put to work.
My plan is still to hold off on dumping it into the S&P 500 because I feel that's way too risky at this point. What would you recommend I do? I'm thinking of moving it all into a total bond market index and every month I'll move 5% or 10% over to an S&P 500 index to DCA it into the market until we do hit a major correction. Then, I'll dump it all into an S&P 500 index, or sell to buy real estate. Or, if there is no major correction, I'll at least have DCA'd into the market.
Outside of the pile of cash I have sitting in the HYSA, I'm in great financial shape. No debt outside of mortgage, wife and I max our 401ks, have real estate investments, have a 6 months emergency fund set aside, and up until 2017 I was using DCA to make regular contributions to a 90/10 stock/bond mix of Vanguard index funds.
I'm 35, so I have a pretty long time horizon, but I do plan on FIREing in my (hopefully) early 40s.
Submitted February 16, 2020 at 06:38PM by personfin https://ift.tt/2SzAd44
