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Whats the best place for money I will need 6 years...
# investing
h
Whats the best place for money I will need 6 years from now that I can open an account with only a small amount of money?
m
money market account or bond fund
thank you 1
h
this?
m
better ohio state tax benefits
h
that has a minimum investment of 3k
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m
I would say this is medium risk while a money market account / fund is low risk
but the tax efficiency for ohio residences is awesome
just checked, $FTOH is listed on fidelity and can be purchased for as little as 8$
h
but FTOH is medium risk? I'd prefer low risk
m
low risk would be money market
h
this?
m
that one has a 3000$ min
for easy of use, you can just open up a money market bank account like with Ally
h
I guess I can start with a FTOH account then transfer when it's at a high point in a few years, that should minimize risk right?
m
i wouldn't try to time the market, but if you are comfortable with that then sure 🙂
h
yet you're comfortable suggesting FTOH even though it's medium risk ..
m
right, if you are comfortable with medium risk, then take the risk, but don’t fool yourself into it being low risk by timing the market.
h
so you don't think it's a long enough time period to have enough time to withdraw after reaching 3k?
m
if you want low risk do FDLXX
h
is that a fidelity fund? is there an equivalent in vanguard?
m
VGUS
h
thanks 🙂
I think what I meant to say before about "transferring at a high point" was a target-based exit strategy, is that still considered timing the market?
m
but, how do you pick a proper target?
h
defer that choice to frum finance slack members 😁
this is really all theoretical because Im not in a position to take on risk, but I don't really understand what you were saying about the tax benefits of the other account
m
i would stick with the VGUS if you are nervous about NEEDING the money and if the goal is somewhat flexible or you can handle a bump go with FTOH
Not investing is also a risk. When we talk about risk in this case we are talking about volatility, not actual risk
h
right the risk of it taking a downturn at the wrong moment
So probably what I need, even for a low risk investment, is a "glide path exit strategy"
m
i think these investments are too low risk to justify a glide path, but yeah. honestly its more like VGUS is very low risk and FTOH is low risk
h
so ftoh with a glide path should be ok? and you think the tax benefits are worth the hassle of opening a new account with a diff company?
m
what new account? who do you need now?
FTOH should be on vanguard
h
oh ok sounds good
f
FZDXX I recently did for short term house fund that I may need soonish
t
I think an index market fund for six years is not that risky. Going with bonds or money markets gives less volatility, but there's more risk that inflation will reduce the value of your money.
m
I agree. That's why risk is a complicated term. One of the biggest risks there is is not investing in volatile funds!
s
Looking at something like VTI just as an example over six years, even if you picked the worst spot in recent history like 2007, you would still be positive again within six years.
m
recent history isn’t the bar though, we have had worse recovery times, so it depends how inflexible the goal is
the question was NEED, not want.
s
I certainly agree any amount of investment has risk, i was mainly addressing the comment about timing the market. On a longer term time scale for a larger fund your risk does go down significantly as opposed to wanting to withdraw in a couple of years which is more likely to have serious downside risk. * This does count on the overall situation where inflation is happening to continue, if at any point the government chooses austerity i would rethink all of my investments personally.
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