Retired With 100% Invested In Cash. Should I Diversify With Index Funds? How Safe?

Spring | Oct 9, 2020 | 23 posts since 2013

With low interest rates I thought I would put some in another investment such as index funds. At age 70 is that a wise idea? Also, not a home owner I thought I would pick up a low cost condo paying all cash?

Any ideas on this?

Post an answer

Answers

me1004 | Oct 10, 2020 | 1,379 posts since 2010

Index funds are no safer than the index.

Choice | Oct 10, 2020 | 937 posts since 2020

Look at today’s WSJ B8 article “Want to keep your cash safe? It’s OK to be a zero”

Spring | Oct 10, 2020 | 23 posts since 2013

Thanks. Couldn't get the article as I am a non subscriber but saw another one saying stay safe with money even with very low interest rates as risk will not solve the problem for that portion of your portfolio where you need low risk with cds.

Choice | Oct 10, 2020 | 937 posts since 2020

Message delete by poster...that’s a new one. :-)

Spring | Oct 10, 2020 | 23 posts since 2013

Did a message get deleted?

JeffinEasternFL | Oct 10, 2020 | 744 posts since 2020

Your question looks of "apples and well, not oranges but, maybe nuts" :) Hire a qualified financial advisor, in fact talk to at least two; pay them "by the hour" for the advice, see if the relationship is there. Only contract with a "fiduciary". Don't do this on your own as more "do it yourselfers" have crashed and burned their finances over "saving a few dollars in expenses" than I can remember. I am a retired Financial Advisor/Agent/Principal and acted as a fiduciary for my business/firm. You'll learn a lot and may get some ideas for your financial security. G'Luck!

Spring | Oct 10, 2020 | 23 posts since 2013

With a financial advisor most all investments will not be FDIC backed and therefore risky. Also, having a great relationship with a financial advisor as you suggest doesn't appear to guarantee much of anything. I am sure I would learn something, however, if I met with two of them by the hour as you suggest. I have always stayed away from them as I like the security of fdic backed cds. If you have any information since you were a financial advisor on what I might learn that would be helpful. Thanks for your reply!

JeffinEasternFL | Oct 10, 2020 | 744 posts since 2020

It wouldn't hurt you to chat, there ARE alternatives for safety other than CDs for SOME of your monies, depending on what it is you want your dollars to accomplish. A good advisor can also help with that. I think risk/reward and a basic how stocks, bonds, alternative "hybrid" instruments work would be a good lesson primer for you!

Spring | Oct 10, 2020 | 23 posts since 2013

I do like exposure to new ideas with hopefully valuable information so I might consider doing this at some point. Thanks again!

Robb | Oct 10, 2020 | 322 posts since 2018

Slightly off topic...but I trade SPY often with the brokerage portion of my portfolio based on specific RSI parameters. Many online brokerages have gone to 0 commissions in recent years which has been a boon for trading. My concern going forward is one party has been pushing a financial transaction tax on stock/mutual fund trades of .2% (google "financial transaction tax"). The tax for SPY which is currently trading near $347 on a buy/sell of 100 shares comes to approximately $139 which for me would make trading more or less prohibitive. Although, the buzz is that any legislation would only apply to those above a certain income level...stay tuned.

Choice | Oct 10, 2020 | 937 posts since 2020

It’s coming... if one wants lower capital gains tax rates than the tax rates on labor...time to pay piper...to some, it’s overdue! The only open question is the rate

The financial institution, product, and APY (Annual Percentage Yield) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your region. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. The content displayed is for general information purposes only; always verify account details and availability with the financial institution before opening an account. Contact [email protected] to report inaccurate info or to request offers be included in this website. We are not affiliated with the financial institutions included in this website.