Ideas for moderate/low risk investments?

[bobdylan]

Hello all,

I've been a subscriber for over a year, yet never have posted here before.

Question - my wife and I were fortunate enough to come into a tidy sum of money from capital gains from real estate investments. We want to park a good chunk of this money (six figures) into a fairly safe investment that doesn't have abysmal interest rates. Holding cash in a savings account or money market doesn't appear to be wise due to inflation. I was thinking high-yield corporate bonds could prove to be a decent option (VCLT or VWEHX) given the current yield and recent sell-off.

Any other ideas that I am missing? This is in a taxable account.

[Yodean]

Hello all,

I've been a subscriber for over a year, yet never have posted here before.

Question - my wife and I were fortunate enough to come into a tidy sum of money from capital gains from real estate investments. We want to park a good chunk of this money (six figures) into a fairly safe investment that doesn't have abysmal interest rates. Holding cash in a savings account or money market doesn't appear to be wise due to inflation. I was thinking high-yield corporate bonds could prove to be a decent option (VCLT or VWEHX) given the current yield and recent sell-off.

Any other ideas that I am missing? This is in a taxable account.

Welcome.

My 2c, not financial advice:

1/2 in TLT
1/2 in QQQM

Rebalance every few months.

[SOL]

Another option to consider one might consider is the selling of puts, but this should only be done on stocks one wishes to own. Never sell puts for speculative purposes. Secondly, the best time to sell puts is when the stock is trading in the oversold ranges (preferably on the monthly charts) as the premiums tend to spike. One can generate quite hefty returns if this strategy is utilized properly

[bobdylan]

Another option to consider one might consider is the selling of puts, but this should only be done on stocks one wishes to own. Never sell puts for speculative purposes. Secondly, the best time to sell puts is when the stock is trading in the oversold ranges (preferably on the monthly charts) as the premiums tend to spike. One can generate quite hefty returns if this strategy is utilized properly

Thanks, Sol. I've played around with a strategy like this in the past with a screen for stocks trading below one standard deviation of their 63 or 95 day charts. I sell puts and then close position when profit is 25%. It gets a little demanding with managing positions and rolling. Might be looking for a more set-it-and-forget-it strategy for this particular lump of cash.

[Triplethought]

Hello all,

I've been a subscriber for over a year, yet never have posted here before.

Question - my wife and I were fortunate enough to come into a tidy sum of money from capital gains from real estate investments. We want to park a good chunk of this money (six figures) into a fairly safe investment that doesn't have abysmal interest rates. Holding cash in a savings account or money market doesn't appear to be wise due to inflation. I was thinking high-yield corporate bonds could prove to be a decent option (VCLT or VWEHX) given the current yield and recent sell-off.

Any other ideas that I am missing? This is in a taxable account.

idea#1 If you are a US citizen you could use your and your wife's SSN to buy the first two $10K ibonds at 7.12% . If you have a trust with it's own EIN# use that to buy another 10K, then start 7 additional Limited Liability partnerships to get additional EIN# for each and invest $10K in each one. will that complicate your tax return? sure a little. But government guaranteed not to lose money. 1 year minimum investment and interest rate adjusts every 6 months for inflation. go to treasurydirect.gov to setup

Idea #2. I'm currently earning 8% on prosper.com loaning money for 3 years to only A,B,C credit ratings. Obviously unsecured consumer loans could go south but I'm dong loans for $250 each. Surprisingly during last downturn fewer defaults then you might expect. I have about $25K here

Idea #3. I'm currently earning 20% on fundrise.com real estate investments. I have about $25K here but it'd be easy to deploy more. The issue is whether you believe REITs will turn down this year. However if it's long term money I think REITs are secure. However you could choose any REIT if you don't like the idea of online one.

idea #4. I'm currently earning 9.5% doing hard money loans on real estate. This is more work. But I hold the mortgage lien so am guaranteed a recourse if they default (although the legal hassle would be substantial) I require buyers to put 30% down and use a local "private lender" mortgage company to bring me the deals. So far no defaults, not much trouble. I suspect more people will want hard money loans when the banks crank down on credit next year.

[Triplethought]

Idea #3. I'm currently earning 20% on fundrise.com real estate investments. I have about $25K here but it'd be easy to deploy more. The issue is whether you believe REITs will turn down this year. However if it's long term money I think REITs are secure. However you could choose any REIT if you don't like the idea of online one.

Clarification on Fundrise. They themselves are quoting only 20% for my returns and indicating the typical returns this year are running around 16% depending on which REIT you're in. They are setting expectations for them to decline. I got very lucky and put $10K in sept 27 2021 and immediately received a $1000 bump in the form of "appreciation" on the properties in my portfolio. I suspect they calculate and distribute building appreciation periodically and by sheer luck (and bad calculations on their part) I received about 10% appreciation in the days after investing. Which I'm guessing was supposed to be the growth either for 6 months or for a quarter). Bank error in my favor.. I wish I'd put in 100K.

My biggest concern is how easy it will be to get the money back out.

[Yodean]

Idea #3. I'm currently earning 20% on fundrise.com real estate investments.

idea #4. I'm currently earning 9.5% doing hard money loans on real estate.

I'm definitely no expert on real estate derivative instruments of any sort, but ideas #3 and #4 sound somewhat risky.

Just a kind of "Spidersense" feeling going off when I read them - could be wrong, of course, and instead could reflect the cumulative side effects of an inappropriate amount of shilajit combined with rhodiola, coffee, and siberian ginseng today.

Still ...

[Eric]

It's a lot of work but if you did a buy-write of 100 shares of WEAT at/near today's close you could make 16%-45% annualized. Buy shares at $10.80, sell a May $9 call for $1.95... that lowers your basis to $8.85.... when it most likely gets called away for $9 in 38 days you've made $0.15 on a $8.85 investment or 1.7% in 38 days which works out to about 16% annualized return.

[jlhooter]

It's a lot of work but if you did a buy-write of 100 shares of WEAT at/near today's close you could make 16%-45% annualized. Buy shares at $10.80, sell a May $9 call for $1.95... that lowers your basis to $8.85.... when it most likely gets called away for $9 in 38 days you've made $0.15 on a $8.85 investment or 1.7% in 38 days which works out to about 16% annualized return.

Eric I bought WEAT about 1.5 mo ago at 11.50 at the wrong time but by selling and rolling calls I have been able to drive my cost basis down to 9.16. Hopefully I just sold my last 11.00 call and if called I will be very happy to walk away with a 20% gain in about 45 days. I dont advise doing this and my goal was to dip my feet into selling options. So far so good and it is actually fun. I am playing with a small amount in options since I understand the risks and I wouldnt do the same play again the same way. I am also nearly done with my new tracking spreadsheet for leveraging the wheel strategy for getting in and out of stocks I really like.

[Eric]

It's a lot of work but if you did a buy-write of 100 shares of WEAT at/near today's close you could make 16%-45% annualized. Buy shares at $10.80, sell a May $9 call for $1.95... that lowers your basis to $8.85.... when it most likely gets called away for $9 in 38 days you've made $0.15 on a $8.85 investment or 1.7% in 38 days which works out to about 16% annualized return.

Eric I bought WEAT about 1.5 mo ago at 11.50 at the wrong time but by selling and rolling calls I have been able to drive my cost basis down to 9.16. Hopefully I just sold my last 11.00 call and if called I will be very happy to walk away with a 20% gain in about 45 days. I dont advise doing this and my goal was to dip my feet into selling options. So far so good and it is actually fun. I am playing with a small amount in options since I understand the risks and I wouldnt do the same play again the same way. I am also nearly done with my new tracking spreadsheet for leveraging the wheel strategy for getting in and out of stocks I really like.

I'm not sure why you would advise against it... You just proved how options can help you repair a trade that turned against you so even your losers become winners. Are you just not excited by commodities? Are you gluten-free? My $9 strike example was just to show what I view as an extremely low risk way to make 16% annualized... It has nearly 20% downside protection built into the trade. For people that could tolerate more risk a buy-write with a $10 strike would return about 45% annualized with less downside protection. Of course one could sell a put at the $10 strike to make 4% in 38 days which works out to 38% annualized if it doesn't turn against you and require management/repair.

Look at the 1-day chart of WEAT on last months options expiration date. I would not be surprised at all to see the market manipulators make sure WEAT closes at $10.99 to prevent $11 option exercise.

[jlhooter]

It's a lot of work but if you did a buy-write of 100 shares of WEAT at/near today's close you could make 16%-45% annualized. Buy shares at $10.80, sell a May $9 call for $1.95... that lowers your basis to $8.85.... when it most likely gets called away for $9 in 38 days you've made $0.15 on a $8.85 investment or 1.7% in 38 days which works out to about 16% annualized return.

Eric I bought WEAT about 1.5 mo ago at 11.50 at the wrong time but by selling and rolling calls I have been able to drive my cost basis down to 9.16. Hopefully I just sold my last 11.00 call and if called I will be very happy to walk away with a 20% gain in about 45 days. I dont advise doing this and my goal was to dip my feet into selling options. So far so good and it is actually fun. I am playing with a small amount in options since I understand the risks and I wouldnt do the same play again the same way. I am also nearly done with my new tracking spreadsheet for leveraging the wheel strategy for getting in and out of stocks I really like.

I'm not sure why you would advise against it... You just proved how options can help you repair a trade that turned against you so even your losers become winners. Are you just not excited by commodities? Are you gluten-free? My $9 strike example was just to show what I view as an extremely low risk way to make 16% annualized... It has nearly 20% downside protection built into the trade. For people that could tolerate more risk a buy-write with a $10 strike would return about 45% annualized with less downside protection. Of course one could sell a put at the $10 strike to make 4% in 38 days which works out to 38% annualized if it doesn't turn against you and require management/repair.

Look at the 1-day chart of WEAT on last months options expiration date. I would not be surprised at all to see the market manipulators make sure WEAT closes at $10.99 to prevent $11 option exercise.

Eric, I have a way of twisting words. I meant to say I am NOT giving investment advice. I love this strategy and once I feel my spreadsheet is complete, I will share.
I am new to commodities and don't know when to play them properly and if I did it again, I wouldn't have chosen WEAT at the time that it peaked.
But, hell yeah, I turned a turd into something that I will hopefully make 20% in 45 days. Exciting stuff.
I want to reiterate that I am very new to this and yeah like you said above, it is a lot of work, but damn good returns.
Based on other plays in my spreadsheet I am up 9.4% in 45 days. Of course it can change, but once I really feel more comfortable, it is definitely another way to increase revenue.
What's cool about the wheel strategy is that you start with Cash Secured Puts and I want to eventually get shares put to me, cause I want the stock anyway, but I knock down my basis in the process. Once I own the shares I can immediately start to sell calls against them especially if I get put the shares as they continue to fall. As they keep falling, it is the best time to start selling calls to continue to drive down my basis. I also leverage Delta to be less than 0.30 if I am trying to drive down basis but want to keep the stock. The spreadsheet continuously tracks basis on calls and puts and I select the right strike to ensure my basis always goes down.

For example, I have been selling puts on AMD since Mar 16 and even as I have been rolling my positions and screwing up a little, I still have a cost basis of 3.88 per share. That means if I get put AMD, I already have them at 3.88 below my strike if I get Put. At 97.5 strike (averaged between 100 and 95), that is 4% to start. If I get put soon and the stock continues to tank, I can start selling calls to continue to drive my cost basis down.
We will see on this one, but the key is I don't care in the end what happens because I want AMD over the very long haul and feel that at 93.62 its not bad.

[Triplethought]

It's a lot of work but if you did a buy-write of 100 shares of WEAT at/near today's close you could make 16%-45% annualized. Buy shares at $10.80, sell a May $9 call for $1.95... that lowers your basis to $8.85.... when it most likely gets called away for $9 in 38 days you've made $0.15 on a $8.85 investment or 1.7% in 38 days which works out to about 16% annualized return.

Eric I bought WEAT about 1.5 mo ago at 11.50 at the wrong time but by selling and rolling calls I have been able to drive my cost basis down to 9.16. Hopefully I just sold my last 11.00 call and if called I will be very happy to walk away with a 20% gain in about 45 days. I dont advise doing this and my goal was to dip my feet into selling options. So far so good and it is actually fun. I am playing with a small amount in options since I understand the risks and I wouldnt do the same play again the same way. I am also nearly done with my new tracking spreadsheet for leveraging the wheel strategy for getting in and out of stocks I really like.

I'd love to see a video or explanation of the wheel strategy to go with that spreadsheet. I've heard you mention it but haven't heard it before

[Triplethought]

Idea #3. I'm currently earning 20% on fundrise.com real estate investments.

idea #4. I'm currently earning 9.5% doing hard money loans on real estate.

I'm definitely no expert on real estate derivative instruments of any sort, but ideas #3 and #4 sound somewhat risky.

Just a kind of "Spidersense" feeling going off when I read them - could be wrong, of course, and instead could reflect the cumulative side effects of an inappropriate amount of shilajit combined with rhodiola, coffee, and siberian ginseng today.

Still ...

Idea #3 I agree with you. I'm trusting fundrise as an organization with my money. And I'm trusting that real estate they invest in will continue to do well. Both are educated bets at best. It may be better to invest in a Vanguard REIT or similar big financial institution but returns are a bit lower. If Fundrise goes out of business I doubt I have much recourse. And really it's not too much different than if prosper.com goes out of business.

Idea #4 I actually disagree somewhat. Every major city has Non qualified or private mortgage companies that help investors and borrowers put together "hard money loans". For example in Utah https://privatemoneyutah.com/ (NOTE I have no experience with this particular one just googled an example). If you have enough money to do a mortgage and insist on 30% down by the borrower you can evaluate each borrower and deal yourself and YOU can be listed on the mortgage. If they default you can foreclose. The loan can be commercial or residential. The Private mortgage company takes a 2% or so fee (borrower pays it). What is worst case scenario here? You may have to pay legal fees to foreclose and own a property for 30% discount. You look at properties in advance that you're loaning on to make sure you're comfortable. It's a bit like selling a put. Don't sell a put for stock you wouldn't want to own anyway right? Well if you're OK with owning real estate in your town think of selling a put as being like giving a mortgage. And the funny thing is so far I've NEVER had to foreclose. No one wants to lose their house or business building, especially after they put 30% down. So if you say "I don't have $300K or $400K to give someone a mortgage". Why not team up with 3-5 other people in your area who each have 100K? Or tell the Private mortgage company you have $100K but only want 2-3 partners on the mortgage and let them drive the deal for you? To me this is relatively safe % return on money. But it takes money to make money for sure.

[Triplethought]

Idea #3. I'm currently earning 20% on fundrise.com real estate investments.

idea #4. I'm currently earning 9.5% doing hard money loans on real estate.

I'm definitely no expert on real estate derivative instruments of any sort, but ideas #3 and #4 sound somewhat risky.

Just a kind of "Spidersense" feeling going off when I read them - could be wrong, of course, and instead could reflect the cumulative side effects of an inappropriate amount of shilajit combined with rhodiola, coffee, and siberian ginseng today.

Still ...

Idea #3 I agree with you. I'm trusting fundrise as an organization with my money. And I'm trusting that real estate they invest in will continue to do well. Both are educated bets at best. It may be better to invest in a Vanguard REIT or similar big financial institution but returns are a bit lower. If Fundrise goes out of business I doubt I have much recourse. And really it's not too much different than if prosper.com goes out of business.

Idea #4 I actually disagree somewhat. Every major city has Non qualified or private mortgage companies that help investors and borrowers put together "hard money loans". For example in Utah https://privatemoneyutah.com/ (NOTE I have no experience with this particular one just googled an example). If you have enough money to do a mortgage and insist on 30% down by the borrower you can evaluate each borrower and deal yourself and YOU can be listed on the mortgage. If they default you can foreclose. The loan can be commercial or residential. The Private mortgage company takes a 2% or so fee (borrower pays it). What is worst case scenario here? You may have to pay legal fees to foreclose and own a property for 30% discount. You look at properties in advance that you're loaning on to make sure you're comfortable. It's a bit like selling a put. Don't sell a put for stock you wouldn't want to own anyway right? Well if you're OK with owning real estate in your town think of selling a put as being like giving a mortgage. And the funny thing is so far I've NEVER had to foreclose. No one wants to lose their house or business building, especially after they put 30% down. So if you say "I don't have $300K or $400K to give someone a mortgage". Why not team up with 3-5 other people in your area who each have 100K? Or tell the Private mortgage company you have $100K but only want 2-3 partners on the mortgage and let them drive the deal for you? To me this is relatively safe % return on money. But it takes money to make money for sure.

I forgot to mention normally 9.5% hard money loans are for like 1 year. Maybe 2. They are usually doing it to either construct or repair the building (more dangerous) or to quickly buy the building to flip it or do something else. No one wants a 30 year 9.5% loan. My partner and I actually get bummed when they pay off early so we insist on 6 months interest no matter how soon they pay off their loan. Some of the loans go longer and that's fine.

[Yodean]

Idea #4 I actually disagree somewhat. Every major city has Non qualified or private mortgage companies that help investors and borrowers put together "hard money loans". For example in Utah https://privatemoneyutah.com/ (NOTE I have no experience with this particular one just googled an example). If you have enough money to do a mortgage and insist on 30% down by the borrower you can evaluate each borrower and deal yourself and YOU can be listed on the mortgage. If they default you can foreclose. The loan can be commercial or residential. The Private mortgage company takes a 2% or so fee (borrower pays it). What is worst case scenario here? You may have to pay legal fees to foreclose and own a property for 30% discount. You look at properties in advance that you're loaning on to make sure you're comfortable. It's a bit like selling a put. Don't sell a put for stock you wouldn't want to own anyway right? Well if you're OK with owning real estate in your town think of selling a put as being like giving a mortgage. And the funny thing is so far I've NEVER had to foreclose. No one wants to lose their house or business building, especially after they put 30% down. So if you say "I don't have $300K or $400K to give someone a mortgage". Why not team up with 3-5 other people in your area who each have 100K? Or tell the Private mortgage company you have $100K but only want 2-3 partners on the mortgage and let them drive the deal for you? To me this is relatively safe % return on money. But it takes money to make money for sure.

Certainly good points you make.

The main risk I see is political - i.e. the Neo-marxist pendulum swinging through the USSA may lead to all manner of legal atrocities on landlords, private lenders, etc.

Remember when the lovely CDC made it more or less illegal for landlords to evict their squatters (i.e. non-paying renters) fairly recently? That sort of a thing. What if Brandon suddenly passes a law that says you can't foreclose in the event of default? Etc.

The big pendulums - or if you prefer, trends - are hard to fight. A.I. trend, increased surveillance trend, increased taxation trend, loss of freedom trend, Neo-marxist trend, etc.