Where do you guys put your cash?

I’m talking about monthly savings (non-401K/IRA), whatever it might be ($500, or $5,000). Reading through the investment topics it sounds like a lot of you hold a pretty gloomy outlook for equities. So what’s the alternative? Are you piling on short positions like SDS? Buying GLD or bullion? Or just hoarding cash under the mattress? I’m pretty nervous myself about buying anything right now with such a high S&P500 average P/E, but by trying to time the market and waiting for it to dip like in February’16 or August’15, I might end up missing this rally (specially with AAPL now up 8% this morning). I’m long RDS/A and UAL.

China, HK, Singapore, Vietnam, Malaysia, Brazil, etc.

It’s not that global stocks are expensive, it’s that the US (and some other developed world countries) are now bubble-territory driven by central bank manipulation. There are fair valuations to be found in many places around the world, and yields are much better too.

Shiller discusses valuations around half way thru… http://bloom.bg/2a6TQsS

S&P price multiples are not all that high, not high enough to force some massive change in strategy like hiding money under a mattress or going 100% into gold.

You’re a level 1 candidate so I’m going to guess that your under 30, read this aloud before you log into your investment account for the next 30 years…as long as I’m saving appropriately, a low cost globally diversified portfolio, which is rebalanced routinely, will allow me to easily achieve my financial goals.

Playing with crap like SDS, gold, timing the market or allowing something trivial like Apple’s recent performance to dictate your view on the markets is only going to hurt you in the long run.

OP. Read this again.

Famous last words. :wink:

Dotcom peaked at 30X, we’re 26X now…and recessions come eventually, it’s been seven years.

These are nice words.

OP. Assuming you’re saving appropriately, a low cost globally diversified portfolio, rebalanced routinely, will allow you to easily achieve your financial goals.

false. if you’re any good at least.

^How does one determine if they are any good?

MLA, you realize that the OP is on level 1. At least consider the significance of what you post here and do so honestly.

Yes, some can time the market. Yes, there probably has been a handful of people who earned lots of money investing in gold. For every one of these people there are thousands who have pissed away money, spent countless dollars on transaction fees and bid/ask spreads, and very likely ruined lives. To perpetuate the idea that a naive (sorry OP, I don’t know anything about you) investor should try his hand at this because of an arbitrary valuation number on an arbitrary index means you’re either A, stupid or B, self-serving in that you want more suckers in the market for you to profit off of.

Yes, theoretically you can make money in VXX or SDS, but very few ever have or ever will.

^Truth. Maybe not stupid though. Possibly arrogant. … I honestly have an incredible track record but mostly because I’ve taken on enormous risk after severe drawdowns. Definitely a lot of luck to not have been wiped out. I’d rather be lucky than good. You can be good and still lose. Humility and patience is the name of the game.

Good point.

I’d just stick to CFA L2 basics-- allocate new money by A) long low-valuation countries with high growth rate, and B) short (or low-allocation) high-valuation countries with low growth rate. Hold for a long time. There are low-cost country ETFs for everything these days.

The OP is right to be afraid, you get f@#%n killed going in at crazy highs, then waiting a decade to get back to break-even…and yet that’s exactly what the CFA “experts” say to do (because they work for the over-valued low-growth countries).

Buy low, sell high.

http://www.analystforum.com/forums/investments/91345826

All condescending comments aside, only PA actually read and answered my question. I’m curious as to where everyone else’s savings go to. Not asking for investment advice. https://www.youtube.com/watch?v=hAQA_29Htts skip to 0:34.

Guess we got confused by the three paragraphs and additional questions you asked in your OP. My non-investment money goes in a checking account

Huh?

To answer your question, I put almost everything in index ETFs - usually the ones with the lowest fees for the category. I am over allocated in US large caps, which is probably a bias. But to be fair, these have performed the best over the time that I’ve been invested.

Yes, price multiples are historically high. However, fundamentally, the multiples should be high, given historically low rates. Also to consider - equities obviously would decline if people sold stock to put their money elsewhere. This leads to the reality that there are not too many compelling alternatives. One often cited factoid is that SPX dividends are higher than the yield on 10y Treasuries.

Because of this, people have just re-bought US large caps after each of the recent selloffs, causing the market to rebound and reach highs each time. Even if the outlook for equities is mediocre, the outlook for other assets is not any better. So people still choose equities.

Regarding market timing - it’s probably possible if you have an information advantage. However, it doesn’t seem like you or I really have such an advantage, so it’s probably best to not try it. Studies generally show that market timing reduces returns. This is not because people are “wrong”. It’s because the best strategy tends to be to maximize your time in the market. In other words, invest immediately, rather than wait for a false opportunity.

^whats your rebalancing strategy?

$$$ goes into Giselle’s g-string down at Scores. O wait, you mean retirement $$$, still in Giselle’s g-string…

Typically I crumple up the singles and throw them, occasionally I’ll tuck it into a g string. It really all depends.

if he doesn’t try to see if he has “the stuff” when he likely has few commitments and has a much higher tolerance for risk, he won’t ever get to try. learning how to beat the market by finding inefficiencies takes market exposure, time and practice. if you tell him to throw money in an index fund, he might as well not finish the cfa designation and go get a cfp designation. i’m encouraging him to learn about the market and who he is. you’re encouraging him to dull his brain and pursue nothing. not everyone has “the stuff” but some do and it’s worth seeing if it’s you.

btw, “the stuff” doesn’t mean you perpetually win on every trade. just that you make good calls at good times and knowing your niche. for me, it’s leveraging the illiquidity of much of the Canadian small cap and preferred share markets and being a good gambler (i.e. making large bets when appropriate).

another example of “the stuff” is if you’re a news freak and have quick fingers you can make a ton. as its not my niche but something so easy, i was few seconds too late on buying LOGM on Tuesday after the leak. if you bought in the two minutes between the news release and the trading halt, you could’ve made a very easy 20% overnight with very low risk. this happens all the time and is mostly dominated by algos but humans can reap the benefits if the news is muddled and the target is small.

^Fair enough. And if nothing else, we need all types making bets. That’s where opportunity comes from. Without active participants, markets wouldn’t be markets. Somebody has to be trying. The rub is a bunch of people get a free ride. The passive investors.