daytrading vs long-term vs savings account

[johnlvs2run]

As an example, say an investor has 60k (10%) for a daytrading account, and 540k (90%) tucked away elsewhere.
I'd like to get opinions of where you feel the best place would be to invest the 540k.

The savings accounts in credit unions here pay 5% at the most, which are 5 year cd's, and 180 days loss of interest on withdrawals. They certainly don't keep up with inflation, and the meager gains are taxed.
A self directed long term trading company (IRA) provides opportunity for at least doubling the holdings each year.

My idea of having different companies is for spreading the risk, and not having everything in one place.
If you picked a different company for long term trading, who might you go with, as opposed to a daytrading company?
Thanks.

 

[luckyd1976]

There's no one way to answer this. Everyone has different risk tolerances, etc... Is it your money or a friends and family account, etc...

It all comes down to how comfortable you feel with each trading idea or return. 540k is alot and alot to weigh your risk/reward and opportunity risk rewards on. 540k in cash is just way to much in my book unless you have short term needs for a big chunk of it.

I'll throw out a few ideas though.

50/30/20 LongTerm, Short term(DayTrade), Interest Bearing Cash.
30/30/30/10 LT Trending Stat, Mid/Shorter Strat, DTrading, Cash
50/50 if you like.

Millions of combinations to choose.

 

[Dacamic]

You imply that 5% is too low. May I ask what your long-term return expectations are?

 

[johnlvs2run]

20% would be reasonable for a savings account or long term.

I would go with the 5% at the CU if there were no penalty for using my money.

Keep in mind that with taxes and inflation that's a loss. 20% would come closer to even.

 

[luckyd1976]

The easiest LongTerm (low maintenance strategy) I know.

Every year at the start of the year buy Stocks (SPY =Bull markets or SDY =Bear markets), Bonds (SHY), and Gold (GLD)

Consistently gives you a safe LT 6%-15% yearly diversified return. (last 4yrs '05 8.5%, '06 13.2%, '07 14%, '08 -3.1% for a 4yr total yrly ave return @8.1%)

Monitor the Weekly charts, 52sma/13ema cross if you would like to tweak. hint, SDY will always outperform the SPY in a down market. Or drop the bear market portions if you like. Either way if you SelfDirect this it's easy and Low maintenance.

LT is easy, finding your INCOME stream is hard.

Either Daytrading or Income Options trading is very time consuming and very high maintenance.

Best of Luck...

 

[Dacamic]

20% would be reasonable for a savings account or long term.

I would go with the 5% at the CU if there were no penalty for using my money.

Keep in mind that with taxes and inflation that's a loss. 20% would come closer to even.

With respect, a 20% annual return over the long-term is Buffett-esqe, and so would be extraordinary. As suggested by luckyd1976 in the preceding post, high single-digit returns are decent results.

 

[mlbuzz]

The overall market returns more than 10% per annum. The minimum goal of a trader should be to "beat the market". Otherwise, sink your money into an overall market ETF and forget about it for a while. You'll get a market return while not worrying day to day.

 

[Dacamic]

The overall market returns more than 10% per annum. The minimum goal of a trader should be to "beat the market". Otherwise, sink your money into an overall market ETF and forget about it for a while. You'll get a market return while not worrying day to day.

The long-term compounded annual return of the S&P 500, assuming dividend reinvestment, is about 8%. Is there another benchmark (U.S. or otherwise) showing a greater return?