How to invest excess cash?

[JustAnotherHuman1]

Curious to see how fellow professionals invest their saved up monies... personally I completely missed out on the crypto bubble (fair to call it that now and I think it’ll be even more valid going forward) but didn’t make a loss either.. taking notes for the next credit cycle.

I have an Interactive Brokers account where I invest all of my cash in US tech stocks. I don’t diversify at all which I know is probably not a great idea but then I have a high appetite for risk and so don’t really care about larger drawdowns and in it for the medium to long term. I think investment into computer technology still haven’t peaked, the more widely it is used the more infrastructure supporting it will required. It might sound simple but amount of data is ever growing and adoption of AI or whatever related tech is far from done. I believe is still a young industry regardless of the dotcom around the turn of the century or the more recent pandemic boom

How about you?

 

[J.Z.]

My companies always have Personal Account (PA) restrictions so hard to invest in anything unless I want to own it for life. Most people around me use Crypto or similar products as a trading instrument as that's still not part of PA restrictions. its correlation with Nasdaq used to be very high, so trading crypto is like trading a slightly leveraged Nasdaq Index
Other than that, I just buy some deep-value stuff over time and accumulate them. A lot of times PA is just about buying dips and holding on to those given no hard stop out. Not sure if it works in the next 20 years but it worked well for my colleagues in the past 20 years.

 

[curious_finance1]

Personally, I have some exposure on Crypto, but not a lot as I feel 2023 won't be a good rebounding year for the sector just yet (at least the first half of the year). I have some consolidated companies where I have invested, but I have taken some exposure or risk in companies from emerging markets which are doing extremely well performance wise, despite the uncertain economic risks. I would say that after the first quarter of 2023 things will start to improve after a very ugly 2022, so if have some cash sitting somewhere, it might be a good idea to allocate them in a wise way given that many stocks (even blue chip stocks) are down big time, so it might be a great opportunity to hop in and try to time the market to the best of your abilities and go for it.

 

[magellan1]

I have around 10 years of experience in investing (academic, professional and personal). If I had the same experience and knowledge 10 years ago, I would create an investment portfolio that is well diversified geographically and sector-wise. Perhaps. 30% in low-cost ETFs, 30% in real estate, 15% in commodities, 10% in gold and 15% in short-term high-yield credit. I recommend international and semi-active ETFs ("smart beta").
If your main goal is maximizing performance you should avoid stock-picking, unless you have many years of experience in investing and knowledge gained at top institutions (banks, universities, asset managers, etc). The statistics show that around 90% of retail traders lose money and it is unclear how much money the other 10% make. Stock picking is an interesting activity and it can be done for other motives - gaining experience, learning about different companies or demonstrating your passion for investing to future employers. Be aware that the more frequently you trade, the higher the chance of underperforming the market given that you incur transaction fees.
Crypto is probably the most speculative/volatile asset class and one should approach it with a high degree of caution. Invest in crypto only an amount of money that you can afford to lose without big consequences for your life.
Personally, I would avoid investing in government bonds given that the inflation is higher than the yield on these instruments and the real return is negative or extremely small. The situation is unlikely to change soon as most governments have too high levels of debt and cannot pay high real interest rates.

 

[AugustusSeptimius1]

I have an Interactive Brokers account where I invest all of my cash in US tech stocks.

Yeah, I'm in a pretty similar person where I'm heavily leveraged in U.S TMT and the market right now isn't really rewarding me so look forward to the restoration of normalcy in 1-1.5 years' time––definitely not a good time to sell. On crypto, I do think crypto has served as an important precedent as to why some regulation is needed. Crypto coins were being heralded as these amazing entities for their ability to negate the need for government regulation and intervention which sounded great until we had the unravelling FTX which cost people billions and where an organisation, in an almost uniquely crypto way, was extracting money why insuring itself against its own coin––which would be like a Bank securing its debts against a national currency that it just made up. Really curious now if entities like coinbase can recover some of the lost crypto credibility as they pursue an increasingly regulated and official model. The market clearly saw potential in an alternate coin that had a rapid money-transferring process and blockchain security in the past, will it do so again?