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What to do with proceeds from house sale if I'm not getting a house?

MCeatalot 3,092 407 August 24, 2015 at 07:40 AM in Finance (4)
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SD'ers, I need your opinion. I sold my house recently and am now sitting on a good amount of proceeds from the sale. I am currently renting and do not plan on getting a house for the next five years. The proceed is currently sitting in a Vanguard money market. As you folks already know, the stock market is in a plunge. My question is, what should I do with some, most, or all of the proceeds? Assume I do not have any debts.

I have thought about using at least 10% of it to invest in the market. Been looking at Vanguard's ETI and even considered buying some Tessla stocks. Thanks in advance!


Full Disclosure: I am new to the stock market.

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#2
Quote from MCeatalot View Post :
I have thought about using at least 10% of it to invest in the market. Been looking at Vanguard's ETI and even considered buying some Tessla stocks. Thanks in advance!


Full Disclosure: I am new to the stock market.
Don't effing do that. If your new, start slow and start conservative. A high flyer, and probably eventually a fast faller, like Tesla is not the way to start.
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What is your goal with this money: to use it to save for retirement, to use it eventually for a down payment on a house, to use it to eventually start a business, etc.?

Do you have any retirement accounts currently?
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Quote from Brian1 View Post :
What is your goal with this money: to use it to save for retirement, to use it eventually for a down payment on a house, to use it to eventually start a business, etc.?

Do you have any retirement accounts currently?

I have a retirement account as well as a pension. My goal for this 'play' account, if you will, will be to have some extra funds five to six years from now for when I am ready to enter the housing market again. Thanks for replying.

Quote from ghostofposterspast View Post :
Don't effing do that. If your new, start slow and start conservative. A high flyer, and probably eventually a fast faller, like Tesla is not the way to start.

Do you have any recommendations on what I should start off with? Since my goal is to start using the funds five to six years from now, id like to put it in a high yield portfolio/stocks. I do understand there is a high risk involved with high yields. And I'm okay with that.
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Last edited by MCeatalot August 24, 2015 at 09:54 PM
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Quote from MCeatalot View Post :
Do you have any recommendations on what I should start off with? Since my goal is to start using the funds five to six years from now, id like to put it in a high yield portfolio/stocks. I do understand there is a high risk involved with high yields. And I'm okay with that.
If you want high risk, yet safer than a momentum stock like Tesla, look at the 3x funds. SPXL is the 3x fund for the SP500. So if the overall market does well, you will do 3x as well. If the market tanks though, you will tank 3x as much. I think something like this would be safer than going with a stock like Tesla. Look at it's PE. It will never grow into that unless it takes the place of GM. What do you think the chances of that happening are?

Look no further than Palm, Blackberry and Taser for what happens to high PE momentum stocks. Remember when Palm OS was going to do away with Windows?
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Quote from MCeatalot View Post :
I have a retirement account as well as a pension. My goal for this 'play' account, if you will, will be to have some extra funds five to six years from now for when I am ready to enter the housing market again. Thanks for replying.

Do you have any recommendations on what I should start off with? Since my goal is to start using the funds five to six years from now, id like to put it in a high yield portfolio/stocks. I do understand there is a high risk involved with high yields. And I'm okay with that.
Is this truly "play" money? In other words, are you OK with losing much or all of this money?
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#7
https://turbotax.intuit.com/tax-t...reportsale


you need to buy another one or you pay tax on it
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Quote from ghostofposterspast View Post :
If you want high risk, yet safer than a momentum stock like Tesla, look at the 3x funds. SPXL is the 3x fund for the SP500. So if the overall market does well, you will do 3x as well. If the market tanks though, you will tank 3x as much. I think something like this would be safer than going with a stock like Tesla. Look at it's PE. It will never grow into that unless it takes the place of GM. What do you think the chances of that happening are?

Look no further than Palm, Blackberry and Taser for what happens to high PE momentum stocks. Remember when Palm OS was going to do away with Windows?
Ah, yes. Palm OS. I remember the good ol' fire sale of the Touchpads...

I've watching Tesla on the sideline well before I even considered jumping into stocks. And I wholeheartedly believe the Tesla is the wave of the future, what with their plans to build a factory in Nevada, the direction they are taking battery technology to, Musk's ideal goals, etc. But I see your point, though, about making safe bets, especially for the uninitiated.
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Quote from Brian1 View Post :
Is this truly "play" money? In other words, are you OK with losing much or all of this money?
Yes, this is truly play money. I've set aside a certain percentage of the proceeds strictly for my own liking. I've thought about getting a Honda Nightshadow, but decided against it. I've thought about travelling, but figured that can wait. I'd like to dip my feet in the stock market. I started reading up on MorningStar and have opened a Scottrade account to get enlightened. I'm sure I'll pick up a few trick of the trades in this forum, too.

Quote from narnaie View Post :
https://turbotax.intuit.com/tax-t...reportsale


you need to buy another one or you pay tax on it
I'll only be penalized with a capital gain tax if I don't qualify for any of the bullet points listed in your link. But thanks for looking out!
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Last edited by MCeatalot August 27, 2015 at 04:37 PM
#10
Congrats on being debt free and being wise about what to do next with that that money. I suggest you diversify it and invest it in a variety of types of entities. Some of them should be low risk, others medium risk, and others higher risk but with the research that indicates they could be a very good return on investment in the end.
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#11
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.
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#12
So if you are ready to buy Tesla stock then you must think it is a good buy now. You must also have a price point / PE ratio at which you will deem the stock ovepriced and exit if shares reach that amount. What is that for you?

If you can't answer that question then I would advise against buying their stock. Buying individual stocks without an exit strategy is gambling, not investing.
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Last edited by IvoryCadenza August 29, 2015 at 05:20 AM
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