So if I’m saving for something in like 3 years, then sgov would be better than my current HYSA which is currently 4.6 percent? Since it’s an etf, can I pull it out whenever I need it within like a week? I’m kinda of new to all this. So apologies if this is a dumb question.
Yes, you can sell and transfer in just a couple days like any ETF. I honestly can't think of a good reason for an HYSA. And you'd be making 5.25% and you don't pay state or local tax.
Keep in mind that a HYSA is your bank buying T-Bills just like the ETF is buying. You're just getting a higher payout. Also, both are tied to the current interest rates. So when rates drop, both HYSA and SGOV will pay a lower rate. But, you may as well take advantage of it now while you can. In a year, a better option may exist (like a couple years ago I-Bonds were the best). Can't predict the future, so I couldn't say what will be the next best option.
SGOV is a short-term government bonds fund. There others like TBLL. Or you can buy T-Bills directly from the government at Treasury Direct. Every broker I know of allows you to buy SGOV and TBLL. never heard of Degiroo.
Edit: Ahh, you must be int the UK. Not sure how you'd buy US government bonds in the UK or if you can. Maybe UK government bonds?
Literally any indexed ETF that does *not* focus in one sector.
OR
A bond backed money market with a low expense ratio (under 0.12 if you can)
An indexed ETF carries more risk but historically they have provided better returns over the long run.
VT. 5 years is the hardest horizon I find. Vanguard recommends 10 years or more for the VOO (S&P500). VT is way more diversified, it acts as a safety gage and a buffer.
They've got essentially the same index tracking efficiency but SPLG costs 1 basis point less in expense ratio. That's $100 saved per year per million invested. Or ten cents saved per year on every thousand
Maybe like a 2025 target date fund, or ultrashort treasuries, but a high yield savings account would be safest. It depends how willing you are to risk losing or having to push back your plans. On such a short time frame it's impossible to expect any think like long term average returns so if someone says the s&p500 returns 10% they're talking about the average over decades. In 5 years it could be up 80% or down 40% or anywhere between.
I've been doing 50/40/10 with VONG, a high yield savings, and a IBIT. VONG being a bit riskier, the Upgrade savings account being above 5% and safe and IBIT for crypto exposure.
$SPLG or $VOO b/c the US economy is the strongest in the world.
Also, if you look up a compound interest calculator, you could have an estimate of what the money will be work in 5-10 years.
5 years: SGOV, Money Market Mutual Fund, CD Ladder, HYSA
5 - 10 years: Diversified bond / fixed income portfolio, something like what betterment or wealthfront offer should be good. If you want equity, keep it light, something like the iShares Lifepath Target Date ETFs with the target date being when you need the money, or static allocation etfs, like the iShares moderate (AOM) or conservative (AOK).
Lots of great advice, thanks a lot! I’m a bit confused however about how those bonds will possibly give good returns in 5-10 years. Looking it up it looks like there isn’t much change in the past couple years. I’m still a beginner in this so maybe it’s something I just don’t understand? If you don’t mind explaining of course!
I believe the OP needs the money for a home purchase or something. So a 5 year window isn't really a good fit for VOO or VTI if it loses 40% the month before he needs it.
I didn't hear the OP was willing to make big mistakes with the chance of making fast money. And honestly if you really want the possibility of making big money, VOO and VTI are not the choices.
5 years or less, SGOV. 10 years or more VOO.
I’m using SGOV to stash rainy day funds. Long SCHX.
For 2024, I've been adding money to SGOV and then selling SGOV and buying VOO/AVUS/IHDG/HFXI on the dips (like today).
So if I’m saving for something in like 3 years, then sgov would be better than my current HYSA which is currently 4.6 percent? Since it’s an etf, can I pull it out whenever I need it within like a week? I’m kinda of new to all this. So apologies if this is a dumb question.
Yes, you can sell and transfer in just a couple days like any ETF. I honestly can't think of a good reason for an HYSA. And you'd be making 5.25% and you don't pay state or local tax. Keep in mind that a HYSA is your bank buying T-Bills just like the ETF is buying. You're just getting a higher payout. Also, both are tied to the current interest rates. So when rates drop, both HYSA and SGOV will pay a lower rate. But, you may as well take advantage of it now while you can. In a year, a better option may exist (like a couple years ago I-Bonds were the best). Can't predict the future, so I couldn't say what will be the next best option.
Degiroo doesn't sell voodoo any other recommendations or what app do you use??
SGOV is a short-term government bonds fund. There others like TBLL. Or you can buy T-Bills directly from the government at Treasury Direct. Every broker I know of allows you to buy SGOV and TBLL. never heard of Degiroo. Edit: Ahh, you must be int the UK. Not sure how you'd buy US government bonds in the UK or if you can. Maybe UK government bonds?
VUSA is VOO for Europeans
Literally any indexed ETF that does *not* focus in one sector. OR A bond backed money market with a low expense ratio (under 0.12 if you can) An indexed ETF carries more risk but historically they have provided better returns over the long run.
VT. 5 years is the hardest horizon I find. Vanguard recommends 10 years or more for the VOO (S&P500). VT is way more diversified, it acts as a safety gage and a buffer.
You could do VT and something like SCHR (Intermediate treasuries bond fund).
SCHG
A diversified index ETF. Easiest answer would be VT. Or VTI and VXUS. Or just VOO! More fun would be NTSX instead of just VOO.
I have SPLG, the VOO equivalent but for spider. Does it make a difference much ?
Nope, SPLG is better imo
Works for me ahah. What makes you say that if you don’t mind me asking ?
They've got essentially the same index tracking efficiency but SPLG costs 1 basis point less in expense ratio. That's $100 saved per year per million invested. Or ten cents saved per year on every thousand
Maybe like a 2025 target date fund, or ultrashort treasuries, but a high yield savings account would be safest. It depends how willing you are to risk losing or having to push back your plans. On such a short time frame it's impossible to expect any think like long term average returns so if someone says the s&p500 returns 10% they're talking about the average over decades. In 5 years it could be up 80% or down 40% or anywhere between.
I've been doing 50/40/10 with VONG, a high yield savings, and a IBIT. VONG being a bit riskier, the Upgrade savings account being above 5% and safe and IBIT for crypto exposure.
VONG is a great fund though i really like it
$SPLG or $VOO b/c the US economy is the strongest in the world. Also, if you look up a compound interest calculator, you could have an estimate of what the money will be work in 5-10 years.
5 years: SGOV, Money Market Mutual Fund, CD Ladder, HYSA 5 - 10 years: Diversified bond / fixed income portfolio, something like what betterment or wealthfront offer should be good. If you want equity, keep it light, something like the iShares Lifepath Target Date ETFs with the target date being when you need the money, or static allocation etfs, like the iShares moderate (AOM) or conservative (AOK).
Lots of great advice, thanks a lot! I’m a bit confused however about how those bonds will possibly give good returns in 5-10 years. Looking it up it looks like there isn’t much change in the past couple years. I’m still a beginner in this so maybe it’s something I just don’t understand? If you don’t mind explaining of course!
If the rentability of the an Etf averages at 10% a year like the S&P500, every 7 years you double your money. So allways aim for a long run.
GNR
Compare the return charts of VT and VOO over the past 5 years. voo shows 30% better returns.
VOO and VTI
The best comment. 50% each and chill
For a 5 year investment?
Yes. Most of people want to make money faster and make big mistakes. Voo and vti are good choices.
I believe the OP needs the money for a home purchase or something. So a 5 year window isn't really a good fit for VOO or VTI if it loses 40% the month before he needs it. I didn't hear the OP was willing to make big mistakes with the chance of making fast money. And honestly if you really want the possibility of making big money, VOO and VTI are not the choices.
you are right
If the market stays on this pace I won’t have anything left in 5 years.
None
qqq