OT - Money / Investing Thread (aka financial no stupid questions)

[MikeDeTiger]

Where would you stash short-term holdings (<1 year) for potentially planned expenses?

Assume it's a taxable account and you're in a state with high income tax (which applies to capital gains / dividends) like CA.

I've been stashing things short term (1-3 months) in SGOV when I've sold stock and needed to hold back for cap gains estimated tax payments. Figure it's a fine way to get a 3.5-4% annualized yield with basically zero risk. Better than a HYSA because the dividends are shielded from CA income tax.

But I'm looking at next summer being the optimal time to buy a house. And I'll have a decent chunk of vesting RSUs over the next 4 quarters (which if sold at vest aren't going to have material cap gains) between now and then. I've been thinking of just rolling those into a safe yielding investment until I decide what I'm going to do house-wise. It's more about recession protection, because if I weren't worried about that, I'd just drop it in VTI.

SGOV is easy, gives that 3.5-4% yield, is safe, and at least avoids the CA income tax (possibly 12.3% this year). I see other vehicles, like JAAA/JBBB/CLOZ, which have higher yields (5.34%6.95%/7.2%, respectively). But I don't know what the risk profile is, and I know they're not tax-advantaged like SGOV. Will the principal value markedly decline in a recession? I don't really know, but that would make them no better than VTI. I have some risk tolerance, but it's like the 5-10% level, not the 50% level.

Thoughts? Is there anything better than SGOV in this situation?

The annoying answer (or opinion, input, whatever) is "it depends."  I keep funds like what you're describing in a high yield savings account.  I could do slightly better in some of the options you and Marq mention, but I view those as emergency funds.  I save for specific categories, some of which I know when they are coming around, but some are SHTF categories and I needed the $ rightnow.  It's quicker for me to get it out of the savings account than any other source.  If I knew for sure when I'd need those funds, then as mentioned, I know I could do a tad better with some CD's at a local credit union, or a short term bond.  But I think Marq is on the right track....admittedly I'm not used to factoring in state taxes because I don't have them.....MarqH is likely far ahead of me in thinking through that off the top of his head.  And it sounds like you don't anticipate needing them emergently.  

[Cincydawg]

I stash "cash" in a money market called SWVXX.  This money is available in a day if needed.  My checking account is with Schwab also, so it's very easy to shift funds to pay bills.  The money I have in SWVXX is in my IRA so the tax issue is not relevant.

One of my goals when I retired was to get all my accounts in "one basket", which I managed.  I have a Roth, an IRA, a brokerage account, and a checking account all with Schwab.  My wife also has accounts there which I manage.

[MikeDeTiger]

Not sure if this goes here or in the Retirement thread, but....

I'm helping my mom sort through some annuity contracts she purchased some years ago.  

People seem to either love annuities or hate them.  I hate them.  I think they're garbage and only benefit the brokers who sell you the contracts.  They can have their place as a small part of a portfolio, but on the whole, they don't pay out nearly enough imo to be worth the time and hassle, and they force you to bet on your own life expectancy.  I know everything does that to some degree, but not like annuities.  I can envision some niche scenarios where a person would be attracted to an annuity, but in general, you can do way more with your money by investing it in the market.  

To summarize, I hate annuities and I hate that mom put a substantial chunk into them.  I'd like to wring that broker's neck for some of the things I now realize he did.  Except I can't, because he's dead, and some woman somewhere in Pennsylvania now "owns" the contracts.  

[Cincydawg]

The only annuity I'd puchase is where I'm on the side of the insurance company.

[847badgerfan]

My dad had an annuity, and it was a pain in the ass to inherit.

[MikeDeTiger]

The only annuity I'd puchase is where I'm on the side of the insurance company.

S'really the only people who benefit, for the most part.  And the brokers who sell them.  I would've thought that was obsolete now, but my stepdad has one in Memphis who's still trying to pedal both of them annuities.  And that with some other stuff going on that he knows full well about, which I won't elaborate on here, but it makes him unethical and shady as hell.  

Another guy whose neck is due for a wringing, if I ever catch him sniffing around.  

[Cincydawg]

"Brokers" have an incentive to push investments with high up front costs.  Duh, so they do.  Everyone should have "money managers/advisors" who are fiduciary.  

I asked mine about annuities a while back, as in "Should I put 5% in an annuity?"  Their answer was "no."  It's a good question to ask a prospective money manager.

[betarhoalphadelta]

This isn't one I own in or plan to, but I'm wondering what you all think of META as an investment?

If anyone here actually owns some, what's your thesis? If anyone here has a strong opinion on why you won't touch it, what's your thesis?

[Gigem]

Where would you stash short-term holdings (<1 year) for potentially planned expenses?

Assume it's a taxable account and you're in a state with high income tax (which applies to capital gains / dividends) like CA.

I've been stashing things short term (1-3 months) in SGOV when I've sold stock and needed to hold back for cap gains estimated tax payments. Figure it's a fine way to get a 3.5-4% annualized yield with basically zero risk. Better than a HYSA because the dividends are shielded from CA income tax.

But I'm looking at next summer being the optimal time to buy a house. And I'll have a decent chunk of vesting RSUs over the next 4 quarters (which if sold at vest aren't going to have material cap gains) between now and then. I've been thinking of just rolling those into a safe yielding investment until I decide what I'm going to do house-wise. It's more about recession protection, because if I weren't worried about that, I'd just drop it in VTI.

SGOV is easy, gives that 3.5-4% yield, is safe, and at least avoids the CA income tax (possibly 12.3% this year). I see other vehicles, like JAAA/JBBB/CLOZ, which have higher yields (5.34%6.95%/7.2%, respectively). But I don't know what the risk profile is, and I know they're not tax-advantaged like SGOV. Will the principal value markedly decline in a recession? I don't really know, but that would make them no better than VTI. I have some risk tolerance, but it's like the 5-10% level, not the 50% level.

Thoughts? Is there anything better than SGOV in this situation?

Hear me out. 

Gold is $4600 per ounce ($4678 as of this post) and doesn't seem to be on any kind of a slide.  By a sizeable amount of money, let's assume $100,000. 

Take your cash, go buy $100,000 in gold.  One ounce gold coin is ~$4600-4700.  20-22 gold coins, 1 oz each.  Either stash them really well in your house, or just get a safety deposit box. I'd go with safety deposit box.  Buy a few at a time, from different shops. 

Gold is up $2,000 per ounce from one year ago.  If you bought $100,000 in 2025, it'd be worth $200,000 today. 

If you do post a gain in a year, you just keep the difference.  No paperwork, no taxes, no gov't.  You can even use the gold directly to buy your home, as long as you and the seller are on same page.  It's better than real money, it's as good as gold. 
 
https://www.jmbullion.com/1-oz-american-gold-eagle/

[MikeDeTiger]

This isn't one I own in or plan to, but I'm wondering what you all think of META as an investment?

If anyone here actually owns some, what's your thesis? If anyone here has a strong opinion on why you won't touch it, what's your thesis?

This won't be the answer you're looking for, but knowing nobody cares usually doesn't stop me from yakking, so...

I don't own META and likely will never for the simple reason that I don't invest in any individual stocks.  IMO, that's just not a productive strategy for most people.  As I understand it, you did very well in that regard.  I think maybe CD did as well.  Y'all are outliers.  I'm happier to only use mutual funds and ETFs for long term strategy.  

The only time I ever messed with individual stocks was when I dabbled in day trading and swing trades.  I got to where I could make money that way, but ultimately my blood pressure and sanity was worth more to me.  

[Gigem]

This won't be the answer you're looking for, but knowing nobody cares usually doesn't stop me from yakking, so...

I don't own META and likely will never for the simple reason that I don't invest in any individual stocks.  IMO, that's just not a productive strategy for most people.  As I understand it, you did very well in that regard.  I think maybe CD did as well.  Y'all are outliers.  I'm happier to only use mutual funds and ETFs for long term strategy. 

The only time I ever messed with individual stocks was when I dabbled in day trading and swing trades.  I got to where I could make money that way, but ultimately my blood pressure and sanity was worth more to me. 

VFIAX For the Win.  

[betarhoalphadelta]

Hear me out. 

Gold is $4600 per ounce ($4678 as of this post) and doesn't seem to be on any kind of a slide.  By a sizeable amount of money, let's assume $100,000. 

Take your cash, go buy $100,000 in gold.  One ounce gold coin is ~$4600-4700.  20-22 gold coins, 1 oz each.  Either stash them really well in your house, or just get a safety deposit box. I'd go with safety deposit box.  Buy a few at a time, from different shops. 

Gold is up $2,000 per ounce from one year ago.  If you bought $100,000 in 2025, it'd be worth $200,000 today. 

If you do post a gain in a year, you just keep the difference.  No paperwork, no taxes, no gov't.  You can even use the gold directly to buy your home, as long as you and the seller are on same page.  It's better than real money, it's as good as gold.
 
https://www.jmbullion.com/1-oz-american-gold-eagle/

I'm too pretty to commit tax fraud.

https://www.investopedia.com/articles/personal-finance/081616/understanding-taxes-physical-goldsilver-investments.asp

[betarhoalphadelta]

This won't be the answer you're looking for, but knowing nobody cares usually doesn't stop me from yakking, so...

I don't own META and likely will never for the simple reason that I don't invest in any individual stocks.  IMO, that's just not a productive strategy for most people.  As I understand it, you did very well in that regard.  I think maybe CD did as well.  Y'all are outliers.  I'm happier to only use mutual funds and ETFs for long term strategy. 

The only time I ever messed with individual stocks was when I dabbled in day trading and swing trades.  I got to where I could make money that way, but ultimately my blood pressure and sanity was worth more to me. 

Obviously, you're right. Most people don't do well with individual stocks. I got lucky with stocks that I'd accumulated simply via ESPP and RSUs and the company/companies did really well. I can't claim credit for how I've performed when I can't say I predicted it would happen 18 months ago. 

The bulk of my portfolio as I continue to diversify out of my company stock is into VTI, the US total market index fund. It's broadly diversified and has a 0.03% expense ratio. 

My individual stocks [excluding the employer stock I'm still selling off] are combined <10% of my taxable brokerage, which means that it's an even lower percentage of our total worth when you factor in my 401K/IRA and wife's IRA. 

I'm doing a little bit of this with individual stocks just because I find it interesting. I'll most likely underperform the index. But I'm hoping I don't. 

[Cincydawg]

I do not own META directly, I do have some XLK which does, it's an ETF.  I own a fair bit of goggle and Apple and Amazon and Costco.  I keep thinking I'm overweight in Tech, but when I sell some, it just comes back (usually).  I do own a fair bit of individual stocks as well as ETFs.

One of my "favorite" ETFs is SCHD which is dividend oriented, not super high dividends, growth dividends.  The other is SWVXX which is a money market fund basically.  That's my largest holding.  Costco is my largest stock holding, mostly due to appreciation, and I do appreciate Costco.

TFLO I like, it's Treasuried inflation protected.

If the overall market tanked 30%, I'd be "OK", a bit disappointed, but OK.  I might not travel to Europe more than three times that year .....