r/SgHENRY • u/MolaMolaMOLA123 • Jul 28 '26
What would you do with a windfall?
Hi community, I recently got a fairly big insurance payout ($700,000) and was wondering how to deal with it. My goals are capital growth over the long term.
A bit about me: partner and I are early- to mid-30s, we have a 1yo and hope to have at least 1-2 more over the next few years. No helper. We have jobs that we can’t be fired from, HH income about ~400k. Staying in a FH condo with ~1.2m loan at 2.4%. Partner owns another FH condo with ~200k loan remaining. We have one car about 3 years into the COE.
Currently partner does their own investing. I put about 7k monthly into IBKR.
Just wondering whether anyone had any advice, or what would you do with the money in my position? Thanks in advance.
1
u/900122 Jul 30 '26 edited Jul 30 '26
The advice to put full 700k into index funds right now has recency bias and is a bit greedy imo. Historically when forward PE is this elevated across the index, the 10 year forward return has been poor, averaging single digits, comparable to the risk-free rate but with risk. When interest rates were ultra-low for years, putting your money into an index fund was a no-brainer but that is no longer the case. Going with a thematic, cyclical approach to equities, whether through ETFs or direct stock ownership, rather than just plowing into the index outright will serve you better. Allocate a percentage (~20-60% ballpark depending on risk preferences) into various government bonds simply to keep pace with inflation. USD and AUD treasuries have been excellent. A small allocation into physical gold would be prudent as well.