Hello,
I am aware of Bogleheads general investment philosophy and my question is not generic but very specific to a particular situation. As a disclaimer, all my primary investments are placed in diversified funds except the one I am talking here:
I bought a new primary residence in 2021 during the covid peak, when house prices were lower. For some not so great reasons I bought the house with 7/1 arm which has 3 more years for expiry. The rate on the loan is 2.5%.
At that time I decided not to sell my previous primary residence and rented that house which I recently sold when prices have recovered and have ran quite a bit. (Why I sold is not a point of discussion here). But I got significant proceeds in the process.
I don't need those proceeds for any reasons as of now but I would definitely need them if the interest rates don't recover and my 7/1 ARM expire after 3 years.
Currently CDs/Treasuries are yielding close to 5%. So, investing in them sounds logical than paying off existing mortgage (at 2.5%)
I also find it unnecessarily risky to invest in stock market at this point (I have significant exposure to market through other investments). However, I also see what I will be missing on if I am not investing any portion of these proceeds into the stock market.
I also think dumping huge sums in the all time high stock market is not best and safe strategy.
To summarize, I want to figure out the investment strategy where I would get good yield, at least more than 2.5% for the next 3 years also giving me good liquidity after 3 years. And I have lesser risk tolerance than standard stock market volatility because I may need it after 3 years.
Thanks
I am aware of Bogleheads general investment philosophy and my question is not generic but very specific to a particular situation. As a disclaimer, all my primary investments are placed in diversified funds except the one I am talking here:
I bought a new primary residence in 2021 during the covid peak, when house prices were lower. For some not so great reasons I bought the house with 7/1 arm which has 3 more years for expiry. The rate on the loan is 2.5%.
At that time I decided not to sell my previous primary residence and rented that house which I recently sold when prices have recovered and have ran quite a bit. (Why I sold is not a point of discussion here). But I got significant proceeds in the process.
I don't need those proceeds for any reasons as of now but I would definitely need them if the interest rates don't recover and my 7/1 ARM expire after 3 years.
Currently CDs/Treasuries are yielding close to 5%. So, investing in them sounds logical than paying off existing mortgage (at 2.5%)
I also find it unnecessarily risky to invest in stock market at this point (I have significant exposure to market through other investments). However, I also see what I will be missing on if I am not investing any portion of these proceeds into the stock market.
I also think dumping huge sums in the all time high stock market is not best and safe strategy.
To summarize, I want to figure out the investment strategy where I would get good yield, at least more than 2.5% for the next 3 years also giving me good liquidity after 3 years. And I have lesser risk tolerance than standard stock market volatility because I may need it after 3 years.
Thanks
Statistics: Posted by thriftyFaramir — Fri May 24, 2024 2:11 am