What to do with $100k cash right now

[mimi14]

I m(34yrs) just matured 50k in CD (HYSA, at 4.8% ) and have additional 50k in fidelity money market (which has been giving me 4.7~5% dividends)

Now i have 100k cash available. I might still keep 50k in money market for emergency cash so i still get some interest but can pull out at anytime.

However, i am not sure what to do with the other 50k.

Invest in FXAIX? (S&p 500 equivalent in fidelity)

Other investment options?

I have home loans but i dont think it makes sense to pay for the principal at this point

Do you have any suggestions?
My goal is to invest in long term

Thank you

 

[cooperkutaaa]

@mimi14 For a long term investment I'd go for a simple S&P500 index fund with regular monthly/annual contributions.

 

[mummy87]

@cooperkutaaa Agreed, check out the Boglehead reddit for more advice

 

[jonerone3]

@cooperkutaaa So your telling him to drop 100k in an s&p index fund?? Implying that it's guaranteed to up forever?

 

[mariejames]

@jonerone3 The s&p isn’t a bet on 500 specific companies, it’s generally the 500 biggest companies in the US. Companies come and go as they grow snd shrink and the index is weighted so the tanking companies make up a smaller percentage of the index.

If the 500 biggest companies in the US go down significantly over the next 30 years, we’ll all likely have much more to worry about

 

[jonerone3]

@mariejames So it's a bet on US prosperity. going "all in" isnt the safest thing. Considering all the current economic climate.

From a simple risk management perspective.

 

[paraklettos]

@jonerone3 I believe OP said half so 50 in the market and 50 left in money market at 5%. This rate will hold for the near future but will need to find something else in the next year or two to maintain a solid rate.

Yes, if you’re planning on 15+ years until needing the money.. the market is the #1 place to put it. As you near needing it you progressively move to fixed income.

 

[moneyirowa]

@jonerone3 OP didn’t ask for the safest thing to do with $100k, did he?

 

[rbau05]

@jonerone3 The 500 largest US companies usually have around 40%+ foreign revenue exposure so even if OP was going all in on VOO or IVV it would hardly be a pure play on the US economy.

https://www.spglobal.com/spdji/en/documents/research/sp-500-global-sales-2018.pdf

 

[wh2]

@jonerone3 Yes, that's what he said... and about as safe a bet as you can get over the long haul when you zoom out big picture. It's the benchmark for a reason. If an S&P500 index fund is not safe, then just about everything is going down with it. Sitting scared in cash will lose to inflation.

 

[mlathim]

@jonerone3 The stock market is what we call a random walk. If you put money in FXAIX in 2022 it dropped 20%. Last year it shot up 25%. The average is 12% but that includes some fantastic years offsetting terrible ones.

Other options are less volatile and lower returns.

At roughly 5% inflation every single one of your “investments” is actually losing value over time. Sure you go up 4.7% but the dollars are worth 5% less so you lost 0.3%. This is true of all HYSA’s, CD’s, etc. on average.

 

[moneyirowa]

@jonerone3 Over the long term, it’s a very safe bet that the index will grow. It has throughout history.

 

[jonerone3]

@moneyirowa But still a bet. We should take into consideration the current economic environment that we are in.

This is unprecedented times.