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Ask HN: You have $300k in stocks. What would you do?

10 points by m3t4lh3ad 6y ago

aj_icracked 6y ago
I would go to Reddit WSB pag and buy $3000 TSLA calls
Brett_S 6y ago
This is hard to answer without more context. For example: where in the world do you live, do you have a family or other dependents, are you employed, if so what, do you have any other sources of income, how old are you, what is your tolerance for risk, what is your IQ & EQ level etc. A good financial advisor would take all of these things into account before giving advice.
- m3t4lh3ad 6y ago
  That was kind of the point - getting some wild ass ideas :) But for a bit more contexts. No kids, 36 years old, only dependent is my partner who also works but earns less. I have a high paying job and a mortgage. I appreciate I'm not giving a lot but indulge me :)
person_of_color 6y ago
Sell covered calls.
giantg2 6y ago
October VIX calls
- silexia 6y ago
  This is the best suggestion I see. For myself, I see high inflation coming from governments printing money. I am heavily levered into real estate, and have put options on 2 year out TLT puts.
  - giantg2 6y ago
    Real estate seems like a great asset type for the next decade. CPI isn't going to move as much as it should. With low interest rates and the gov buying bonds, equities are going to see inflation. I think real estate will go up, especially since there is a recent jump in the number of people moving out of the cities. I would love to buy land, but I have to do some WSB style trading to get that kind of capital. I'm heavy in VIX calls (28, 30, 32.50), DIS puts (I think they should drop back to $110 for a bit, but maybe I'm stupid), and some SPY puts (310). I plan to buy 2 year SPY calls (400 and 425) on the next dip since equities should continue to inflate due to interest being so low.
- jklein11 6y ago
  Why not write a bunch of OTM VIX puts? This way if volatility spikes in October you get to hang on to the premium . If you end up being wrong about October but you think things are going to get a little bit crazy going into the US presidential election you can take delivery of the contract and profit when volatility ramps up.
ksaj 6y ago
I would keep a chunk of it on hand for day-to-day, and leave the rest in an interest free banking account, if your country has those, or a high interest banking account if our country doesn't have those, and just sit on it until the market bottoms out from covid. Then pour the saved money into a "safe" stock such as a major bank and enjoy the ride out of the doldrums as the markets become invigorated. Yes, I realize the markets are kinda doing well right now if you completely ignore how much they dropped earlier this year. But if we get a second wave (and we very most likely will) consumer confidence will go through the floor and take the market along with it. That's the bottoming out I'm expecting to happen, and am preparing to take advantage of. I'm doing pretty much this exactly right now. A lot of my cash that could be on stocks is sitting there waiting for that bottom side. All my current trades are with money that's already in the market.
- increment_i 6y ago
  Do you expect a once in a decade (and by some measurements, once in a lifetime) crash to happen twice in the same year, or several years from now? I don't doubt there will be a second wave - the US is by most accounts still mired in the first wave, but I suspect most people probably missed the boat on the "bottoming out" event. Stranger stuff has happened though. Interesting take.
  - pedalpete 6y ago
    It depends on if it can be considered one drop or two, and who decides. If you look at many of the stock crashes. There is an initial drop, followed by a recovery, and then a further drop. This recovery seems strangely stable (to me) but from what I understand there has never been a government who has pumped this much money into the market in order to maintain the highs. One thing to consider which I heard the other day. [paraphrasing] "Invest in the market in front of you, not the one you think should be." There are so many people saying "well the market would be lower if the fed hadn't printed so much money, etc etc" but you can't invest in the market where they didn't, so you have to look at where you are, what you think will happen and go from there.
    - 6y ago
Trias11 6y ago
Sell stocks and: - invest into overseas quality real estate. - buy physical gold. - invest on cryptos. In that order. We need to protect assets from potential inflation, likelyhood of high taxes and overall instability caused by politics and social unrest. Basically my (untraditional approach) is DO NOT keep any liqud assets in USA. In addition - leverage low interest rates and mortgage the hell out of your real estate assets and do the above. If inflation will hit - let bank have a problems, not you.
- sloaken 6y ago
  So where overseas would you invest?
  - Trias11 6y ago
    Panama. Likely destination for thousands of americans (and Canadians) when sh.. hits the fan.
marketgod 6y ago
Trade options. Hold TSLA/AAPL. In essence continue doing what I have been doing. The market looks fine right now but after today we may chop a bit.
deleted 6y ago
[deleted]
Sevii 6y ago
What is your allocation? Do you want more risk or less risk now? I'm worried about inflation and considering starting a business. So I'm looking at inflation hedges that are still pretty liquid. If you don't need liquidity fast you might want to buy real estate to ward off inflation.
logicslave 6y ago
FAANG Stocks. Dont over think it
LUmBULtERA 6y ago
I guess I'm old school for here, just VTI.
sethammons 6y ago
Index fund for most. “Rule #1 investing” for a smaller portion. Also consider rental properties depending on your total portfolio.
jklein11 6y ago
I would write far out of the money puts on TSLA. Look at the options chain! If you were to sell 1 put on TSLA with a strike price of $1200 and maturity date of 7/24 you would collect $780! That means that if TSLA doesn't drop from 1600 to 1200 by Friday you get to keep that $780! Only issue is you need to put up ~120k in collateral
alexmingoia 6y ago
If that was all the money to my name I’d put 10% in bitcoin, 40% in large-cap leading tech stocks (Apple, Microsoft, etc.), and 50% in cash in a bank. If it was $300k I could afford to lose, I’d put it all in income-producing assets like rental properties or private equity.
alltakendamned 6y ago
What terrible advice in this thread - bitcoin, single stock/industry portfolios, gold, overseas real estate, option trading etc are all highly risky investments. I suggest to read "The Elements of Investing". It's a quick read and will help you have a broader (and more sane) perspective. But in general, ensure sufficient diversification and time horizon, then add more over time. If you're all in one stock - diversify asap.
rdtwo 6y ago
Why not just pay down your mortgage? You’ll get 3-4% risk and tax free where else are you gonna get that kind of guarantee?
kanobo 6y ago
Sell all stock, save enough to cover taxes, then buy a tiny plot of land with access to water and electricity. I will build and live in a yurt while I plan my next move.
rayhendricks 6y ago
I’m going to assume this is a serious question, although if not serious go to r/wsb and have fun making Robinhood founders & Big Daddy Elon even more wealthy. If it is I’d first look at your current positions and see if you owe any tax and how to minimize that. Then I would think about what goal you are investing for and what your risk tolerance is. This basically explains it http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm http://www.simplestockinvesting.com/SP500-historical-real-to... Put it all into large cap index funds and/or international too and leave 30k for your cash emergency fund. Dollar cost average over the next year if you are worried about Covid related market instability. This is what I did and I only have 1/2 the money you have but it will be enough to retire on when I’m ready barring unforeseen events.

10 points by m3t4lh3ad 6y ago

I would go to Reddit WSB pag and buy $3000 TSLA calls

This is hard to answer without more context. For example: where in the world do you live, do you have a family or other dependents, are you employed, if so what, do you have any other sources of income, how old are you, what is your tolerance for risk, what is your IQ & EQ level etc. A good financial advisor would take all of these things into account before giving advice.

m3t4lh3ad 6y ago
That was kind of the point - getting some wild ass ideas :) But for a bit more contexts. No kids, 36 years old, only dependent is my partner who also works but earns less. I have a high paying job and a mortgage. I appreciate I'm not giving a lot but indulge me :)

person_of_color 6y ago

Sell covered calls.

giantg2 6y ago

October VIX calls

silexia 6y ago
This is the best suggestion I see. For myself, I see high inflation coming from governments printing money. I am heavily levered into real estate, and have put options on 2 year out TLT puts.
- giantg2 6y ago
  Real estate seems like a great asset type for the next decade. CPI isn't going to move as much as it should. With low interest rates and the gov buying bonds, equities are going to see inflation. I think real estate will go up, especially since there is a recent jump in the number of people moving out of the cities. I would love to buy land, but I have to do some WSB style trading to get that kind of capital. I'm heavy in VIX calls (28, 30, 32.50), DIS puts (I think they should drop back to $110 for a bit, but maybe I'm stupid), and some SPY puts (310). I plan to buy 2 year SPY calls (400 and 425) on the next dip since equities should continue to inflate due to interest being so low.
jklein11 6y ago
Why not write a bunch of OTM VIX puts? This way if volatility spikes in October you get to hang on to the premium . If you end up being wrong about October but you think things are going to get a little bit crazy going into the US presidential election you can take delivery of the contract and profit when volatility ramps up.

ksaj 6y ago

I would keep a chunk of it on hand for day-to-day, and leave the rest in an interest free banking account, if your country has those, or a high interest banking account if our country doesn't have those, and just sit on it until the market bottoms out from covid. Then pour the saved money into a "safe" stock such as a major bank and enjoy the ride out of the doldrums as the markets become invigorated. Yes, I realize the markets are kinda doing well right now if you completely ignore how much they dropped earlier this year. But if we get a second wave (and we very most likely will) consumer confidence will go through the floor and take the market along with it. That's the bottoming out I'm expecting to happen, and am preparing to take advantage of. I'm doing pretty much this exactly right now. A lot of my cash that could be on stocks is sitting there waiting for that bottom side. All my current trades are with money that's already in the market.

increment_i 6y ago
Do you expect a once in a decade (and by some measurements, once in a lifetime) crash to happen twice in the same year, or several years from now? I don't doubt there will be a second wave - the US is by most accounts still mired in the first wave, but I suspect most people probably missed the boat on the "bottoming out" event. Stranger stuff has happened though. Interesting take.
- pedalpete 6y ago
  It depends on if it can be considered one drop or two, and who decides. If you look at many of the stock crashes. There is an initial drop, followed by a recovery, and then a further drop. This recovery seems strangely stable (to me) but from what I understand there has never been a government who has pumped this much money into the market in order to maintain the highs. One thing to consider which I heard the other day. [paraphrasing] "Invest in the market in front of you, not the one you think should be." There are so many people saying "well the market would be lower if the fed hadn't printed so much money, etc etc" but you can't invest in the market where they didn't, so you have to look at where you are, what you think will happen and go from there.
  - 6y ago

Trias11 6y ago

Sell stocks and: - invest into overseas quality real estate. - buy physical gold. - invest on cryptos. In that order. We need to protect assets from potential inflation, likelyhood of high taxes and overall instability caused by politics and social unrest. Basically my (untraditional approach) is DO NOT keep any liqud assets in USA. In addition - leverage low interest rates and mortgage the hell out of your real estate assets and do the above. If inflation will hit - let bank have a problems, not you.

sloaken 6y ago
So where overseas would you invest?
- Trias11 6y ago
  Panama. Likely destination for thousands of americans (and Canadians) when sh.. hits the fan.

marketgod 6y ago

Trade options. Hold TSLA/AAPL. In essence continue doing what I have been doing. The market looks fine right now but after today we may chop a bit.

deleted 6y ago

[deleted]

Sevii 6y ago

What is your allocation? Do you want more risk or less risk now? I'm worried about inflation and considering starting a business. So I'm looking at inflation hedges that are still pretty liquid. If you don't need liquidity fast you might want to buy real estate to ward off inflation.

logicslave 6y ago

FAANG Stocks. Dont over think it

LUmBULtERA 6y ago

I guess I'm old school for here, just VTI.

sethammons 6y ago

Index fund for most. “Rule #1 investing” for a smaller portion. Also consider rental properties depending on your total portfolio.

jklein11 6y ago

I would write far out of the money puts on TSLA. Look at the options chain! If you were to sell 1 put on TSLA with a strike price of $1200 and maturity date of 7/24 you would collect $780! That means that if TSLA doesn't drop from 1600 to 1200 by Friday you get to keep that $780! Only issue is you need to put up ~120k in collateral

alexmingoia 6y ago

If that was all the money to my name I’d put 10% in bitcoin, 40% in large-cap leading tech stocks (Apple, Microsoft, etc.), and 50% in cash in a bank. If it was $300k I could afford to lose, I’d put it all in income-producing assets like rental properties or private equity.

alltakendamned 6y ago

What terrible advice in this thread - bitcoin, single stock/industry portfolios, gold, overseas real estate, option trading etc are all highly risky investments. I suggest to read "The Elements of Investing". It's a quick read and will help you have a broader (and more sane) perspective. But in general, ensure sufficient diversification and time horizon, then add more over time. If you're all in one stock - diversify asap.

rdtwo 6y ago

Why not just pay down your mortgage? You’ll get 3-4% risk and tax free where else are you gonna get that kind of guarantee?

kanobo 6y ago

Sell all stock, save enough to cover taxes, then buy a tiny plot of land with access to water and electricity. I will build and live in a yurt while I plan my next move.

rayhendricks 6y ago

I’m going to assume this is a serious question, although if not serious go to r/wsb and have fun making Robinhood founders & Big Daddy Elon even more wealthy. If it is I’d first look at your current positions and see if you owe any tax and how to minimize that. Then I would think about what goal you are investing for and what your risk tolerance is. This basically explains it http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm http://www.simplestockinvesting.com/SP500-historical-real-to... Put it all into large cap index funds and/or international too and leave 30k for your cash emergency fund. Dollar cost average over the next year if you are worried about Covid related market instability. This is what I did and I only have 1/2 the money you have but it will be enough to retire on when I’m ready barring unforeseen events.