1. Intro
Have known some low-risk investment method.
- Bonds: 6 month 5%, limited to $10000
- Money Market funds, APY 5%, no limitation
This would be my main low risk investment
Now I want to investigate medium risk option
- What options do I have
- What’s the pro and con of each of them
- Tax consideration
2. Options
- Mutual Funds / ETF
- Pro: lower risk, professional management
- Con: management fee, lower return
- Dividend paying stocks
- Pro: Potential for regular income
- Con: Not guaranteed
- Real Estate Investment Trusts (REITs)
- High dividend yields
- Sensitivity to interest rate, market
- Corporate Bonds
- Higher rate
- Credit risk, interest rate risk
3. REIT
Type:
- Equity REIT: most, own and manage income-producing real estate. Revenues are generated primarily through rents
- Mortgage REIT: lend money to real estate owner. Earnings are generated by the net interest margin
Pro:
- Liquidity
- Diversification
- Stable cash flow
- Risk-adjusted return
Con:
- Low growth
- Dividends are taxed as regular income
- Subject to market risk
4. SP500
SP500 is just an index, the true trader should be the company
Two biggest
- SPY: better for institutional trader
- VOO: lower ratio, better for personal use, invest and hold
5. TODO
-
Buy Treasury Bonds: 10000 - Manage HSA account
- Learn more about medium risk option: 8000
- ETF
- REIT
6. Trading
Buy MKT: market order, current market price, the price is a little different
Buy Ask: precise current lowest price, but may take longer
Buy Bid: precise current highest price, may take longer