How to invest $500K (stocks, ETF etc)

HI there and thank you for such a useful community! I’ve been reading for a while, let me introduce myself, I am Tobia, I live in Switzerland and I am in my 30s.

I need to invest about $550K that I currently have in my bank account - this is not the only cash I’ve available, but I would like to start investing it as it doesn’t make any sense to let it stay there and lose to inflation. I currently have about $200K invested with a mix of stocks (tech mostly, which I understand), VOO, VTI and QQQ.

My goal would be to double this amount of money in ~10 years from now. I am 34, let’s say I wake up when I am 45 and I have $1M there more or less. Keep in mind I still have a good salary (for now) and I might want to start a company in my next 2-3 years (and that’s why I have some other cash that I keep there).

Here are my questions and considerations:

  • VT or something else: many friends are suggesting to drop everything into VT and call it a day. I understand the simplicity of it and why it might work, but what are the cons of this?
  • Should I go for more risky ETFs? Something like VT + VOO + QQQ or a similar mix where I basically try to increase risk but also potential outcomes?
  • What else could I consider? Should I talk to an advisor? Maybe an independent firm that can help me see all the possibilites?

ps. I am reading quite a lot about VT and Swiss residents, my understanding is that we can still invest in US domiciled funds, and that’s better for swiss residents, but please tell me if I am wrong.

Thanks again
Tobia

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What a nice task :slight_smile:

I would do simple things: Barbel strategy 80/20 in VT/VWRL and BTC. (Or 90/10)

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thanks SwissTeslaBull for the reply - I already have something on BTC, not sure I am ready to deploy more there. Let’s say I am not considering crypto in that 500K investment for now.

How much are you ready to lose? You didn’t really mention.

I would do DCA (dollar cost average) into VT. Few reasons:

  1. VT. USA has over performed for many years now so I would Not want to be solely US exposed
  2. I would DCA because we are at all time high. In case market crashes 30%, you would have fire powder to buy at lower prices. Especially important as you already exposed to tech, which is even more risk exposed
  3. You could consider allocating part of your portfolio (20-25%) to commodities/gold/real estate ETFs
  4. You could consider allocate some money to Bond (particularly corporate) or cash. Bond is not for the return but for downside protection l. Alternatively you can keep a part in cash as downside protection

You could think geo or thematic (China, AI, etc.) but if you plan to sleep well, I would do VT or VT+ some assets not correlated with stocks.

I would plan to DCA over 1.5 years (25-30k per month) or so you can do so in chunks (e.g. 50k now; 100k after Easter; 50-100k after summer and etc. without a tight schedule. If market goes down I would buy more. If it does not I would slowly enter but still keep a cash reserve ready to deploy. Unless you put some money in bond/gold/commodities that are less correlated to stocks.m, if it was my money i would keep some cash ready to deploy.

Don’t spend money on advisor. If you really want to, hire someone for a fee. Not someone that will manage your money, because they will sell you the shit that makes most money for them.

This is if you don’t need the money. It may well be possible the stock market in 10 years will be at today’s levels or even below.

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I would be ok losing 20-25% of that amount in a downturn

Thanks Steve for the thoughtful message. Yes this is about 60% of my current net worth and I am planning to invest it with the idea of not touching it anytime soon. I like the idea of derisking with commodities and other things, would you still go with specific ETFs for that?

I don’t invest much in this. I did only oil after the COVID downturn. Technically commodities will do well in high inflation world. In low inflation will do bad and increasingly have correlated with stocks.

For commodity producers check CMDY and GUNR. Also check the discussion on boglehead.
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=322149&hilit=Commodities+ETF

For gold, there any many. You check out

  • Graniteshares Gold Trust
  • SPDR Gold MiniShares Trust

And VNQ. vanguard for REITS

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I would use the cash to buy an appartment even at todays prices. If that’s already there, then VT like 50k every month.

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I’d diversify as others said between (mostly) stocks, cash and real estate.
I’d go somewhere around 50-25-25% into stocks, RE, and cash.

For stocks I believe the general recommendation is to dump it onto VT. The next 10 years I’d calculate with only 5% compound return though as the last 10 years have been great. DCA would help, but I wouldn’t go too fast if you decide to DCA. Some turmoil is expected in the next 12-24 months, I’d rather ease into it slower (24-36 months target to completion).

For active managed funds, I’d also look at Fundsmith (https://www.fundsmith.co.uk/), a generally defensive fund that buys “good companies” with a no bullshit mgmt ideology. Should perform better in a downturm than others. Maybe leave 10% for stock picks, to not make it boring. :slight_smile:

For real estate you can go with REITs (watch for volatility), direct ownership in CH or EU (if you’re non-Swiss and have a home country outside CH), or immo funds. I’d have a preference towards owning Swiss properties not for profit, but rather for the stability and the elimination of the currency risk. If you don’t own a home, maybe it’s time to look at one (not for financial reasons, rather for the emotional one). Look at crowdsourced property sites (Crowdhouse, Foxstone) for diversification and risk reduction vs owning 1 (or 2) direct flat(s).

For bonds - I’d just keep that money in cash. Bonds don’t pay anything plus you need to pay the middleman and lose flexibility of deploying your cash whenever you like.

Commodity - can’t help you there.

I’d suggest to not, due to all the related limitations around the approach.
(Search for crowdhouse etc. on the forum for related topics)

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One can always buy directly and let the properties.
As long as you know what you’re doing and are happy to take the full risk of no occupancy/repairs, etc.

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