SGOV

Ididit-forthecookie

\>Yes, the [iShares 0-3 Month Treasury Bond ETF (SGOV)](https://www.ishares.com/us/insights/portfolio-insights/cash-alternatives-put-cash-to-work-sgov) has favorable tax treatment because its distributions come from U.S. Treasury obligations, making them **exempt from state and local income taxes**. However, you must still pay federal income tax on those earnings at your ordinary income tax rate

Ididit-forthecookie

SGOV for now to cool down while you think

SirGlass

I would go one step further ; ditch a HYSA and just hold your emergency fund or long term savings on a money market mutual fund or something like vbil/sgov even hysa banks play games, in theory a "good" HYSA will pay somewhere around the fed funds rate or short term interest rate. However banks play games, they will offer an introductory rate that then falls under the fed funds rates Or maybe they will have their HYSA match the fed funds rate today, but in 1 year it will start to diverge. If the fed fund rate goes up they may not raise their rates Just use a money market mutual fund or something like VBIL/SGOV , you will always get basically the short term interest rate. No games , no offering good rates then dropping them. They will essentially always track the fed funds rate minus a small expense ratio And added benefit VBIL/SGOV is state tax exempt, a treasury money market fund will be as well but not all money market funds only hold treasuries

PartsSprout

Analysis paralysis and fear of loss is preventing you from taking action. Easily happens. Lots of people look at current valuations and end up where you are. 1) hopefully your cash is actually in a money market, HYS, SGOV, or something earning 3.5%+ because that's available now with no risk while you weigh options, this can even become part of your portfolio. 2) learn what you are comfortable with, and understand your timeline. Weigh as many portfolio options you want with an AI and with a Monte Carlo simulator, test until you find something you are comfortable with. 3) Tune out, read less news / social media / reddit, for any longterm investing you have to ignore all of the day to day, the New Thing talk, fear, hype, euphoria, etc

spilledonwhite

Can someone explain the absolute witchcraft of DJI? How the fuck do you have only 30 stocks but have the volatility of fucking SGOV.

CryingInTheCasino

Love me some SGOV

Flayum

Buddy, just create an emergency fund of SGOV with 6mo expenses, then invest the rest in VT. Spread your risk across the world. Unless you're planning on using that money for something, then consider it problem solved.

j4c11

SGOV

Flayum

Buddy, just create an emergency fund of SGOV with 6mo expenses, then invest the rest in VT. Spread your risk across the world. Unless you're planning on using that money for something, then consider it p roblem solved.

SoundOff2222

Maybe SGOV + VT, after the Emergency Fund has been established.

DoinIt4DaShorteez

If he has wages, the best thing for him to do as far as actually investing would be to: Open a a regular brokerage account and a Roth IRA with Fidelity or whoever. Put $8,600 into the Roth immediately. Buy 40% VOO etf, 30% BND etf, 30% SGOV etf. Put the rest into the regular brokerage account and buy SGOV with it. On Jan 4 of next year, sell the SGOV in the regular account, move the resulting cash to the Roth, and invest it in the same 40/30/30 allocation.

spilledonwhite

If I bought SGOV it would crash 5%

Moist-Guava-732

there is a reason that 1mil SGOV got bought right before after hours close yesterday

Not_FinancialAdvice

You've always got SGOV.

Cav829

I'd start by asking him his risk tolerance. I'm guessing he is over 60, so I don't know if he's looking to get super risky. Most people here are younger and might hate the answer, but simply putting it in USFR or SGOV is always an option if he's just looking to make more than a bank account. SCHD and other dividend ETFs are also a wonderful option to look at.

Outside-Glove-5625

SGOV

Moist-Guava-732

wow fixed income stocks getting absolutely wrecked today already lost the difference in yield to SGOV in a day holding corporate bonds

kstreetsushi

Except we know you won’t SGOV.

Low_Plastic363

Cashed out gains and went there last week. Still holding the usual index longs, but SGOV is dry powder in case a shakeout is coming.

Moist-Guava-732

just give me one more rebound rally to cash out and im gonna SGOV and chill for the rest of the summer

Emotional-Breath-838

The VIX options expire on Wednesday. The expectation is that volatility will wind up “less capped” after the unwind. In a more volatile trading environment, many people are unaware of buffered ETFs and Sortino ratios. Start with Sortino. It’s like Sharpe but when it measures volatility, it excludes all upside volatility. What you’re looking for with Sortino is how smoothly does this go up. The smoothest up and to the right is SGOV. The Sortino on it is off the charts because it doesn’t go down. A solid Sortino is 2.0. But if you want more than SGOV gives while still keeping a solid Sortino, you may want to look at buffered ETFs. The point of a buffered ETF is that they’ll use options to cap your downside. Pull up a chart of some of the most popular ones: CPSP MMAX ZAPR APXM You’ll see truly high Sortino ratios and that up and to the right smoothness that people love about SGOV but with higher returns. Keep in mind, these come at a cost. SGOV costs 0.09% and these buffered ETFs can run as high as 0.85%. Many of them are new and there’s more to know but I manage multiple accounts; two for elderly relatives; and I’m looking at these as ways to stay sane if volatility spike after Wednesday.

joe-re

I hold my dry powder in SGOV, which is a short term treasury bills ETF. Very stable, highly liquid, very safe, low yield - 3.8% dividend yield. Most solid and boring thing there is. Which is what you want for dry powder.

Me-Regarded

SGOV is not for the faint of heart but it can make you some good gains

Ahamadrayasbaboon

Prolly not in ‘26.  SGOV CTA when low XLP/XLV/XLU when low or SCHD anytime

Stonks303

It would be interesting to see a 60% TQQQ 40% SGOV proxy. They’d be rebalanced quarterly. It would probably have very different results.

chaosoffspring

Right now I am very conservative. I have enough shares to just sell covercalls since my basis is so low. I have pumped and dumped some memes and IPO, I.E spaceX. Waiting for anthropic and openAI to do the pump and dump again. But overall very conservative, holding alot of cash in SGOV.

funkyk0val

sir, I own SGOV shares. good day.

_rockthemike

Full port SGOV

Ahamadrayasbaboon

If you’re that cautious, why not DCA a blend of SGOV, AVDV, and either SCHD or XLP XLV XLU? Highest odds come from starting today. 

West_Lavishness6689

SGOV offers a 3.58% monthly dividend with basically a 0.01% risk. easy liquidity for when youre ready to buy back into the market so when these ATH prices get even higher and you get fomo you can sell SGOV and buy at 10-20% higher prices from here.

doortoNarnia

SGOV

AccomplishedClub6

Honestly? Maybe consider buying a house using the money as a down payment. I have 2.3 million invested, but for the last year I've only been hoarding cash in SGOV (4% dividend rate) saving up to buy a house. Your "mistake" could be rectified as intentional non-invested cash b/c you dont want to invest money you are using to save up for an expense within 5 years anyway.

BarefootMarauder

I recommend you start with the very basics and educate yourself before investing money into things you don't understand... Check out the wiki/prime directive in r/personalfinance. Then pick up a couple books, like "I Will Teach You to Be Rich" by Ramit Sethi, and "The Simple Path to Wealth" by JL Collins. Both of these guys are awesome. Ramit has lots of videos on YouTube and he has a mini-series on Netflix. JL has a free stock series on his website too which is excellent reading, and he's been interviewed on multiple podcasts if you search his name. As a mom responsible for 4 little ones, I would also recommend you figure out what your total living expenses are for at least one year, and keep that much set aside in safe "cash equivalents" such as a HYSA, a good money-market fund at a broker, or in an ETF like SGOV. This is your "emergency fund." If the 100K isn't currently earning at least 3.25% or more, get it moved immediately to somewhere that is at least keeping pace with inflation until you decide how/where to invest it. And that *should* be low-cost total market index funds at a reputable brokerage like Fidelity, Schwab, or Vanguard.

flyingtiger188

Any investing comes with inherent risks of loss. Some are infintesimal like US debt (eg SGOV which will be roughly similar returns to a HYSA) while others can be very high (long term holding of triple leveraged funds like TQQQ). Understand that the market has good days and bad days, and even good years and bad years but on the whole will increase over time. As long as your risk isn't too high (yolo 100% into a risky business) and your timeline is long enough to smooth out the ups and downs you will come out ahead. You mentioned that you have young children, have you considered 529s to help save some money for their education?

geddyclaus

Got an email from Fidelity saying there is a mandatory reallocation of my all 401k positions to SGOV

jetpilot6969

SGOV it is lol. 🤣

AegonTargaryen17

I don’t understand why people don’t just vti and chill, schd and chill, literally SGOV and chill or ANYTHING but options.

Jericho3434

SGOV, also. IBM said some bad things about software. I’m actually surprised MSFT is up. I guess the market is ignoring it and pumping the Mag7 or they think it’s an isolated case.

Ahamadrayasbaboon

SGOV is pretty much it. 

Art_Crime

I don't agree. The government needs some amount of money printing to keep cash flowing to lenders and banks. Every single person in this thread is looking only at CPI and not core inflation. Core inflation iirc is the measure of inflation excluding gas and food. Currently, it sits at 2.5%. Furthermore, inflation encourages entities to invest and to spend money rather than hoard it. If i knew that inflation would be 0, then I would not buy VT, I would buy SGOV and TLT and just sit on it.

Retired-Programmer

I believe it because a similar thing happened to me. I used to buy Schwab SWVXX with my idle cash which if I have $400 I would specify I want to buy 400 shares. Then sometime later I changed to buying SGOV instead and the first time when I specified 400 of SGOV that meant I am buying $40,000 of SGOV and not $400 like it is with SWVXX. Believe it, stuff like this happens.

DoinIt4DaShorteez

SGOV is like a money market fund in that it invests in similar instruments - really short-term treasuries. In a money market mutual fund, the interest earned every day gets dumped into a separate bucket and if you sell in the middle of the month, you get your share of that month's divs. The way SGOV and other similar ETFs work is that the actual price per share goes up by about a penny a day. At the end of the month, the fund manager pulls the dividend amount and the market price drops by that amount, then starts going back up again. If you look at a multi-month chart of SGOV you can see what this looks like. Because of those mechanics, it'll be a coincidence if you happen to buy and sell at the same exact price. The monthly price range is about 30 cents. So if you bought on the first day of a month and sold on a last, you'd have a cap gain of about 30 cents/share. Buy near the end of a month and sell near the beginning of a month, you're going to have a cap loss (but you'll have collected a div in between) Buy and sell in the middle of different months, you may have a cap gain or loss of a few cents/share. As for taxation, cap gains have always been taxed, you just may not have known how SGOV works on a daily basis so you didn't know it was possible to have any. The dividend distributions are not exempt from Federal taxes. They are exempt from a lot of states' income taxes, but a few states have quirky rules about whether and how much is exempt, so you'll need to look that up.

Rocket_Man54321

i kinda like BOXX & XBOX to store idle cash over SGOV. I think these etfs are the best cash-like alternative

dismendie

Hold a hoard of SGOV maybe even up to 25% for the market correction.

DoinIt4DaShorteez

I don't see anything wrong with that plan based on what you've said. SGOV divs are about 95% state-tax free (depending on the state). But its distributions are ordinary income for Federal tax purposes.

DoinIt4DaShorteez

SGOV is such short term treasuries that it's basically a money market fund, and about 95%+ of the distribution amounts are state-tax free (depending on the state). He might be able to get a few basis points more in a HYSA, but there's nothing wrong with using SGOV for an emergency fund except that when you sell, it takes a business day to settle before you can take out the cash.

bam2350

State income taxes don't apply? Then be sure to include munis that avoid federal taxes. Control costs now. If you're trying to amass wealth on top on the guaranteed 80K/month, more savings early in the timeframe is a real advantage. Likewise, keep after it. If the person is willing/able to work at it some, direct investment into property might be an option to do some tax things. REIT likely wouldn't have the tax advantages but could provide the diversification. One possible allocation could look like this: 25% SGOV or similar, 25% FLMI or similar, 15% international index fund, 35% broad US index such as VOO/VTI/SPYM. If 50% stocks is more than your comfort, dial it back into TIPS and/or SGOV (RETI and/or property fits here too).

abeBroham-Linkin

SP500=if your retirement horizon is 10+ years Everything else: HYSA/SGOV/Money Market/CD=whichever has the better rates and most convenient for you.

nupper84

You're trolling. FNSXX requires a minimum of $10 million. That's seven zeros. Two commas. For 12 months put it in a HYSA or SGOV if you live in a state with high taxes.

essencelom5

SGOV

SaucyOcto

If you live in a high tax area, SGOV/bonds. No state or city tax on interest.

Glam34

SGOV

2Hosslovescash

So you’re just here to type? Scared money makes zero money. Have fun in SGOV.

SomePolack

Yeah I put all that money into SGOV and CD’s to protect it from myself In hindsight it was a genius move 

Apple2o

Buy SGOV, or transfer it to a stable value fund

DoopDaLoot

90% VtI 10% SGOV

BagHoldersOfAmerica

SGOV upgraded by wsb bulls to outperform this month

painfulletdown

Not show up for work, throw away my alarm clock, move to state that does not have income tax, start slowly switching over QQQ to SGOV, get a vasectomy, travel around visiting friends & family, goof off each day, practice my dancing, and make love to a variety of beautiful women.

Standard_Tea8250

loading up on MU MRVL GOOG MSFT and SGOV

BarefootMarauder

Cash-equivalents (a couple MMFs and SGOV).

dope-a-meanie

At least years gross salary in SGOV. 

turboMXDX

SGOV gives you 1.5% less yield without the risk of blowing up your capital. Who in their right mind would even consider TLT anyways

acexprt

Some risky but high. MAIN, JEPI and JEPQ. Safe but low SGOV. Do some research into this.

fire_minded_nate

Your instinct is right. Hit the 4% match first (that's an instant 100% return on that slice), then Roth, then taxable. The SGOV emergency fund placement is fine, just make sure you have 3-6 months liquid before going aggressive elsewhere.

Various_Couple_764

SGOV is basically the same as a Money market fund or HYSA. I would rather deposit money into a high yeild fund like QQQI 13% yield. and turnoff dividend reinvestment and and led the dividned fill a money market account. build that up to 5 most of cash Anything more than 6 month would be reinvested for more dividend income Eventually the dividned income may be enough to allow you to start funding the Roth. So now you have dividends funding your Roth and keeping your emergency fund full. Eventually you could start using the dividned income to also start covering some of your monthly bills. Which would indirectly allow you to increase your 401K invsitment. Eventually I added other dividned funds like SPYI 11% yield. EMO 9%, UTF 7%, UTG 6% and PFFD 6%. All these funds are taxed at ta lower rate than your work income and they pay montly dividends. My taxable account now generates enough inome to cover all of my living expenses. it won't fix your problems overnight. It take time to build up the divine income . And the more income you have the easier it is to invest for retirment.

dak4f2

Yield factors in expense ratio. So yield vs yield is apples to apples.  SGOV is ~95% state tax exempt. For VMFXX, it only holds 30-60% in US government obligations vs 95% for SGOV so > if you reside in California, New York, or Connecticut , you may not qualify for any state tax exemption in certain years [for VMFXX]. These states require money market funds to hold at least 50% of their assets in U.S. government obligations at each quarter-end within the tax year, and VMFXX occasionally dips below this threshold due to its investments in repurchase agreements.  

Electronic_Bee3134

I disagree regarding SGOV. The purpose of an emergency fund is to be liquid, safe, and preferably earn something. SGOV fulfills all the criteria. It doesn't need to have instantaneous liquidity as generally emergency fund doesn't mean a sudden emergency that requires immediate payment. It covers losing a job, a sudden massive expense (car breaks and need to buy a new one for example - that's something that even if it happens suddenly, I have at least the 2 days until I get the cash from SGOV). I think it's fundamentally different than a standard bond fund

ValueSeeker1

Congrats on getting sober - that's the hardest part and you did it. Your plan is basically the standard priority order (401k match > Roth > brokerage) so you're thinking about it right. Only thing I'd tweak: SGOV for an emergency fund is fine, but once it builds up consider a HYSA for quicker access. The rebuild is a slow grind but the framework is solid.

chindef

Careful with these fintech accounts. There are many that advertise FDIC insured and all that, but actually aren’t. I’m not saying the two you mention are scams, I’m just saying that scams are out there and they might be. There are some recent YouTube videos that have come out about it. People put money in and then are never able to pull it back out…. The money is just gone, like that South Park episode “…and it’s gone!”  I would keep emergency funds in SGOV. Keep 2x your largest monthly expense in your checking account that way you have some cash in hand (this probably means 2x your monthly rent / mortgage). Then if you have expenses when you’re waiting for your SGOV funds to sell and transfer, you can use credit cards for those couple days then pay them off as soon as you can.  Typical advise is to contribute to your 401k up to the match amount, then contribute as much as you can to max your Roth IRA. Then if you can still save more for retirement, put that into your 401k until that is maxed out. Then if you still have extra funds after that, just throw them in a taxable brokerage account and invest in broad index funds.  Also, make sure the funds you have in your retirement accounts is invested in diverse index funds. Some people put money in those accounts, don’t realize they need to invest it, and then have lost years or decades of growth.  Also, typically advised to save at least 15% of your income for retirement. If you aspire to retire early, you need to contribute more than that 

tidder8

It depends on what is the emergency you are protecting against. I could sell SGOV today and have cash in my checking account 4 days from now. If the emergency is unexpected car repairs or home repairs that's fine. If the emergency is putting up bail money then no.

free-quentflyer

You're asking two slightly different questions which is why people are giving you different answers. If you want dividends you can invest in dividend-paying stocks or ETF's (vanguard has a couple dividend-focused ETF's, VYM and VIG). If you don't want to "erode your pot" (maintain the nominal value of your principle) you can invest in short-term bond/money market ETF's. I like PULS, for example, other people like SGOV. Fortunately interest rates are relatively high at the moment so you can earn 4-5% on those short term funds, i.e., $4-5k per year on your $100k principle. Hope that helps.

OmicronNine

I actually do disagree, at least provisionally. How liquid your emergency fund needs to actually be depends on your immediately available credit. For example, I could probably pay as much as $30,000 on my credit cards in an emergency if I really, *really* needed to, and then have a month or so to withdraw and transfer funds from various accounts (including funds that I currently have in SGOV) to cover that payment before having to pay even a cent in interest. And I'd get some reward cash back in the process. :)

MedSPAZ

An emergency fund shouldn’t be in bonds, you want that as liquid as possible while earning some return like in a HYSA. Otherwise good on you and make sure to at least hit that 401k match. It’s a marathon. Do others disagree about the SGOV thing?

d33p7r0ubl3

Where are you seeing that SGOV had a higher yield?

tremblingtallow

From what I see VMFXX is 3.56% yield with a .11% expense ratio (from their website) while SGOV is 3.56% yield with a .09% expense ratio (according to Robinhood) Probably doesn't matter which one you hold cash in

SerMumble

Start with a high yield savings account or open a brokerage with vanguard, fidelity, schwab or similar reputable company for your country and invest in a money market like SWVXX on Schwab, treasury bonds like SGOV, or similar. This will help you stay ahead of inflation with 3-4% interest/dividends until you learn more about what to invest in. Popular assets typically are etfs that track indexes like the S&P500 SPYM, Nasdaq 100 QNDX, total world index VTI, and similar. Some brokerages support automation like Schwab and their S&P500 SWPPX mutual funds can invest automatically on a weekly schedule so you have more time to focus on income and life.

drakilian

Why would you ever put your money there when SGOV is equally liquid and has a greater return?

pr0prfkt

VOO QQQM, SGOV for short term cash. You will learn more over time. You can do all with just those honestly.

jrader

I know this is WSB, but you don't have to full port every decision. Don't y'all ever go to like 10% cash in SGOV and set staggered limit orders at support?

rithsleeper

How is this even measured? Is it cash that is sitting in savings accounts? Or is this people sold assets in a brokerage and is sitting in SGOV or just idle? How do we know that cash would be invested if choices were made? Most people I know glaze over if I try to explain how to put their money into a brokerage and just buy VOO. It’s amazing. But yet they have a “savings” account with wells fart go that requires them to deposit $20 a week to avoid a fee.

DependentAnimator742

So many of you have told the OP to buy and hold, then sell sometime in the future, after appreciation. You're missing a key point: the OP is looking for some immediate or near-term income - there's a sh\*#load of frustration and impatience in that post. The other thing y'all aren't hearing is that the OP seems to be stuck in a 'no/low risk but high reward' mindset. The OP mentioned having a bond fund/funds. That tells me real risk aversion. So the OP needs to relax a little AND be rewarded with seeing tangible portfolio increases in the Roth, my guess within the next 6 mnth or a year, before he/she jumps off a cliff. I'm going to suggest baby steps for this OP. If it isn't like this already within the Roth, change it to: 1/4 Bond of something like SGOV, for security, 1/4 Growth like VOO (which will be realllllly tough for the OP to have faith in, this can take years in a flat market), 1/4 in a middle-of the road ETF like SCHD, and 1/4 in covered call ETFs, like QQQI and SPYI. << That last one is where the instant gratification is. Further, you all are wrong to say ETFs don't appreciate. I'm looking at my Schwab now and I have some covered call funds - SPYI, for example - that has a 38% appreciation in less than 2 years, PLUS the 10%+ yield. The worst performer I've had (which I sold a few years ago) was JEPI. I have ETV, which gives me a solid 7% yield with only 12% appreciation in 2 years, but I keep it because it is tax-advantageous, somthing the OP doesn't need to worry about. I also have GPIQ and NIHI, among others. I'm trying to post a screenshot of a partial view of my portfolio on here but I can't seem to do so. All in all, I don't believe that over the long term the OP needs a big covered call portfolio. But to kick start their psyche, yes, it's a good move.

hybridoctopus

Legitimate question, do they count cash-equivalent ETF like SGOV as cash?

ErroneousEncounter

Short term bond funds like SGOV. Literally the only thing that won’t drop aside from cash, but the benefit is it makes a small amount of interest (3-4% right now). You basically want to stay invested, but start moving money over to SGOV as you believe the crash is getting closer. Of course if you are not in a tax advantaged account and you’ve had your investments for less than a year, there’s an opportunity cost to moving them as you will have to pay income tax on your gains instead of capital gains tax.

verves2

SGOV doesn't pay dividends, it pays interest. It's a bond fund, not a company distributing profits.

Dracomies

Whatever was going to cash, maybe put it in SGOV instead?

CryingInTheCasino

You don’t have to leave the market but just go into something less risky as a resting spot. For example sell the shares and immediately buy SGOV. Then sell SGOV when you are ready for your next move.

Muy_Division

So you keep 30% of your port in cash/SGOV/MM? I always keep some dry powder but can’t bring myself to keep more than around 6%

bam2350

I'm going to provide extra context, which I think this conversation needs. I opened my brokerage account in 2015 with the goal to get better gains than my checking account which had accumulated too much cash. Lesson/question/change #1: Why didn't I figure out HYSA??? At the time, my father was my coach. He was fully retired, 75 years old, and living on dividends, social security, and pension. His guidance, which made sense to me, was towards dividend paying reliable stocks of companies that we're going to fail. For example MMM or ATT. He told tales of stocks he "couldn't afford to sell due to gains/tax" and the neat companies he had invested in (BGS) that had done so well. It seemed he clearly had it figured out. In time, Dad has passed, I have taken control of his old accounts to provide for my mother. There is clear evidence of emotional investing, and choices he made clearly haven't all panned out. For example, the BGS shares he gifted me are now nearly worthless. Lesson/question/change #2: Dad wasn't a genius and didn't always get it right. Lesson#3: Emotional decision making is frequently not the best. However, my mother remains well provided for, even as her costs skyrocket in assisted living. Dad was a proponent of picking individual stocks. Through time I have largely moved away from this. I continue to hold individual stocks, which has generally been OK, but hasn't "beat the market". However, since my objective was to do better than my checking account, I'm doing very well. Lesson/change #4: Instead of focusing on picking individual stocks, using broad index funds is easier and quite successful. Lesson #5: Understand and remember your objectives. At this point, VOO, VTI, and DIA account for about 30% of my brokerage portfolio. A few big winner individual stocks and a few more funds (including SGOV) round out my top 10 holdings. Going forward, I will almost certainly continue to focus on adding to my VOO, VTI, and SGOV positions. I have benefited from and enjoyed my dividends. However, some of my worst moves have been "dividend chasing". At one point, rather than benefitting from the modest monthly dividend from VOO or the declining % yield from CAT I chased dividends in a bond fund RA. I'm about 25% down on that, and while it continues to pay well above 5%, fees will eat into that. I'd have been ahead to purchase VOO, CAT, or KO. Buffet has benefitted from dividend stocks, but doesn't pay a dividend... Lesson/change #6: Don't chase the high dividends, benefit from strong stocks that pay a modest yield. Time in the market....

CornerOne238

6 months? It would be useful if you stated your time frame in op. With 6 months, your only option is SGOV or BIL. Everything else will risk losing principal over such short time frame.

CornerOne238

If this was true, SGOV price would be close to zero by now. Dividends simply convert profits and growth to cash. Yes, share price drops on ex div date but for quality dividend instrument it recovers just fine and the principal is preserved.

Impossible-Use5636

A good dividend return will be somewhere in the 5% range. 3.5% or so in SGOV with tax advantages, 6% in riskier vehicles. After tax, that's about $4,500 a year at best. Less than $100 a week. Get a part-time job and leave the portfolio invested.

dolarizado_br

Great framing. I’ll add an angle most US-based folks never have to think about: I invest in US markets as a foreigner, and from the outside the “cash is a disaster” point is even sharper. For you, cash is at least denominated in your home currency the loss is “only” inflation. For someone like me, sitting in cash means eating inflation *and* being exposed to whatever my local currency does. So the bar for “just hold cash” is even lower when it’s not your base currency. The reframe that works on cash-hoarding friends, in my experience: cash isn’t “safe,” it’s a *position* a 100% bet that money keeps its value, which history says it slowly doesn’t. They think they’re avoiding risk, but they’ve just picked the one risk that’s guaranteed to show up (inflation) over the ones that are merely possible (a crash that historically recovers). Framing it as “you’re not out of the market, you’re 100% long cash” sometimes flips the switch. And yeah SGOV/T-Bills for the emergency buffer is the sensible version of “safe.” That’s not the same as parking $400k there and calling it a retirement plan.

Various_Couple_764

SGOV has a yield of 3.8% currently inflation if 4.2%. Meaning Anyong holding cash right now is loosing money due to inflation at a rate of 0.4% per year. The goal of many investors is to have a rate of return about double the long term average rate of inflation. That means you need a savings account that pays about 6% interest. I doubt you can find a bank willing to pay 6%. but dividend funds like UTG 6.4%, UTF 7%, PFFR 8%, CLOZ 8% EMO 9%, PBDC 9%, ARDC 9%. Wutg these funds you basically grow you money at about twice the longe term average rate of inflation, and all of these funds have less volatility

SenselessSensors

What’s better than SGOV and is widely available?

EpicDOgeMC

It’s genuinely true though. In most things learning will always improve your performance. In investing that’s really not the case. Any time spent learning is honestly waisted time. All you need until you retire to know is open a roth, fill up your 401k to match, 3-6 months of expenses in SGOV or a HYSA and the rest in VT. Literally all you need to know right there.

Apprehensive_Elk2608

> SGOV is losing to inflation It is, but not by much, and mostly on tax drag. I agree with you though, bonds exist for a reason. They do scare people though because of 22'.

whitenoize086

Usually telling them to go VOO or VTI doesn't work out cause what if the crash comes. I start by getting them to open a brokerage and go full SGOV. Then remind them of the VTI gains comparatively over time.

themanclark

SGOV essentially pays interest and can be sold quickly. Cash secured puts require cash or margin. But the broker doesn’t charge interest on margin used to secure puts unless you actually get assigned shares and need to use capital.

AssociationFit3009

You don’t pay taxes on your principal investment just the return. You literally cannot come out behind if the stock increased in value. You have to pay short term gains on your HYSA/SGOV if you pull it early too. They protect your downside it’s a risk/reward issue more than a tax issue.

sharp315

10 years of "emergency funds" is not really an emergency fund - you simply prefer cash to equities. define that as part of your allocation and stop calling it an emergency fund. btw SGOV is losing to inflation. if you are going to sit on that much cash you are better off in long term bonds.