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Read the articles on Bogleheads.org and the r/personalfinance Reddit wiki on managing windfalls. Do not feel the need to invest this money until you understand
by javanissen 4y ago
Read the articles on Bogleheads.org and the r/personalfinance Reddit wiki on managing windfalls. Do not feel the need to invest this money until you understand your options and have a baseline understanding of your risk tolerance. In middle age I suspect putting it 100% in stocks might exceed your risk tolerance: a balanced portfolio of stock index funds, treasury bonds, I bonds, maybe paying down debts, and maybe liquid cash reserves in FDIC-insured high-yield savings accounts is probably more appropriate.
- nextos 4y agoI would suggest something similar. Read about permanent portfolios, i.e. investment strategies that balance different things that exhibit low correlation (e.g. stocks, bonds and real estate). For stocks, an index fund is a fine choice, but I would invest progressively to avoid getting screwed up by wrong timing. Another idea is to allocate a small part of your portfolio for a fund that has similar ideas to Universa Investments & Taleb, i.e. buys you insurance for tail events.
- soramimo 4y agoWhat are examples of these types of tail risk funds?
- nextos 4y agoUniversa Investments. However, I think minimum investment is too high for a normal individual. It's geared towards institutions. You can also take a look at https://www.eurekahedge.com/Indices/IndexView/Eurekahedge/643/CBOE-Eurekahedge-Tail-Risk-Hedge-Fund-Index https://www.eurekahedge.com/Indices/IndexView/Eurekahedge/64...