This is the investment breakup I am keeping for my cash. 20% crypto 40% robinhood 30% wealthfront 10% savings account Any suggestions on improving the risk/reward balance?
Lower crypto and Robinhood percentages. Increase Wealthfront percentage. This is not tricky...
Pretty bad. What's inside robin hood and wealthfront? the fact that you mention them instead of the underlying asset allocation leads me to believe you need to do a lot of reading before investing in anything. 20% in crypto is beyond stupid.
IMHO: I would keep crypto < 10%. Rest in Wealthfront with a risk level appropriate for your situation (age, goals, risks willing to take, etc). You don't need cash in a savings account beyond what you need for your normal cash flow. Buy CDs for your emergency fund. And your emergency fund should not be a percentage of your portfolio. Should be based on 6 or more months of expenses.
IMO 6+ months is way too much. 3-6 is fine. You can get liquidity from Wealthfront portfolio line of credit with 3-4% interest rate, or credit cards, without having to have a giant drag on your portfolio in the form of cash. Of course it depends on your total savings. If you just started working and only have 3 months of salary saved IMO saving into 401k, etc. takes priority over a giant emergency fund. https://earlyretirementnow.com/2016/09/07/debunking-emergency-funds-part1/
For my emergency funds, I'm kind of compromising a bit. I have something like 5 or 6 months in CDs and another 5 or 6 months in a low risk Betterment portfolio (30% stocks / 70% bonds) So far that low risks portfolio has been going up enough to keep up with my increased expenses. If it goes below my target (say market was down) I just replenish it to my target.
Sound advice...anything more than 10% in crypto is reckless.
20% of a few thousands dollars is nothing. OP didn’t mention the absolute amount. I could invest 100% of $100 in cypo dirt. Absolute $ would help for recommendations.
Well, if you only have $100 in total liquidities and you invest all of it in crypto, that would not be very smart.
Assuming OP makes more than $100k a year, loosing $100 isn’t that bad.
401k is separate I assume? What’s robinhood, are you buying individual stocks? You also don’t need 10% cash, that’s just a drag on returns. If you’re afraid of risk you can reduce the crypto percentage. This is pretty high speculation and most would argue that the “solid” diversified funds of Wealthfront and ETFs in Robinhood should be 60-80%+, and 20% speculation in individual stocks and crypto
Old farts like me believe in higher liquid balance. I personally advocate at least 1 year. Those of us who were in the 2002 crash will never be the same.
Kind of agree. If you're a doctor or have another very secure job, then a full year might be overkill. But tech jobs could become much less secure pretty quick if we end up in a big recession.
That's an insane amount of your total portfolio in crypto in my opinion. Generally you want 10% or less to be for speculation. Also, what's the breakdown between Wealthfront and Robinhood? Why not just say what breakdown in type of holdings? It's hard to say if it's a good call when 70% of it is a mystery.