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Posted on 4/27/19 at 4:03 am to TorchtheFlyingTiger
quote:
Open a taxable brokerage account.
Yep.
Posted on 4/27/19 at 8:11 am to fjlee90
I'm in your same situation,
dump the remaining in taxable brokerage, vtsax, and let it ride. In about 15 years you'll laugh. No penalty to remove early, no limits in amount added. Just be aware of taxes (not too hard).
dump the remaining in taxable brokerage, vtsax, and let it ride. In about 15 years you'll laugh. No penalty to remove early, no limits in amount added. Just be aware of taxes (not too hard).
Posted on 4/27/19 at 10:45 am to Junky
Taxable brokerage account seems to be the consensus. Appreciate the advice folks.
Posted on 4/27/19 at 8:30 pm to fjlee90
quote:
Engineer.
What kind?
Posted on 4/27/19 at 10:42 pm to LakeCharles
Taxable account is the answer. What you invest in the account will vary based on your broader portfolio. If you want tech exposure, then QQQ is a great fund. Do not do a 529 until you actually have a kid.
This post was edited on 4/28/19 at 11:37 am
Posted on 4/28/19 at 10:00 am to lynxcat
quote:And if your risk tolerance allows, value cost average with TQQQ. I'm up 70% YTD.
If you want tech exposure, then QQQ is a great fund.
Posted on 4/28/19 at 11:35 am to RoyalWe
TQQQ is a terrible recommendation for a buy and hold investor.
Posted on 4/28/19 at 12:00 pm to lynxcat
quote:I agree. Hence the 'value cost averaging'.
TQQQ is a terrible recommendation for a buy and hold investor.
Posted on 4/28/19 at 12:15 pm to RoyalWe
How does this protect from time decay of leveraged ETFs?
Posted on 4/28/19 at 1:50 pm to lynxcat
quote:
How does this protect from time decay of leveraged ETFs?
I guess I should have expected this question, so I'll comment. Before I say why I'm not concerned about long-term buy and hold (even though this isn't what I do), here are a couple of interesting articles.
Reddit r/investing
The Long Term Behaviour of Leveraged ETFs
The thesis is that beta decay is less of an issue than reported, even over long periods, and that moving into and out of fluctuating funds relegates it to a non-issue. I'm not going for a precise multiple of an index’s performance, I'm going for higher volatility. I use that higher volatility to my advantage by value cost averaging.
To illustrate:
From October 1 2018 through April 18 2019:
+0.58% NDX
-10.61% TQQQ
(This is an example of where people will conclude that holding leveraged funds does not work.)
From the low on December 24 2018 through April 18 2019:
+30.35% NDX
+91.05% NDX performance multiplied by 3
+110.46% TQQQ
(Here is an example where TQQQ's performance greatly exceeded NDX's from the bottom)
When you buy weakness and sell strength (you have to define your own criteria here), performance improves further in most time frames.
From October 1 2018 through April 18 2019:
+0.58% NDX
-10.61% TQQQ
+15.91% One Value Cost Averaging Approach
Jason Kelly, the king of leveraged value cost averaging and source of the above.
edit: grammar & Jason Kelly reference
This post was edited on 4/28/19 at 5:37 pm
Posted on 4/28/19 at 5:26 pm to fjlee90
I'm in your same situation except I'm only meeting the match on my 401k and I'm a couple years younger than you. I opened an account on vanguard and started investing in some mutual funds. Check out bogleheads.org theres some good advice that I've been using to put my paychecks to work. Assignments are nice. Take advantage of it
This post was edited on 4/28/19 at 5:28 pm
Posted on 4/28/19 at 5:54 pm to Yeti_Chaser
Delete
This post was edited on 4/28/19 at 5:59 pm
Posted on 4/28/19 at 7:11 pm to LakeCharles
Graduated as a chem e.
Posted on 4/28/19 at 8:03 pm to lynxcat
quote:
time decay of leveraged ETFs
Not really a thing. Decay in leveraged products is overwhelmingly due to unfavorable volatility and movements. And that is the downside for the real upside of leveraged products: when leveraged products go on a strong positive trend, they provide returns in excess of the leverage used.
That said, I wouldn't recommend investing in leveraged products to anyone, especially not without a strong plan or strategy.
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