Rental Property Investor · Indianapolis, IN · Member since 2020 · 77 posts · 37 votes
I am currently in the process of saving up to buy my first rental property, i have decided to put most of my net worth into the stock market since i am young and can take on more risk but now i am getting worried that since i am going to need that money within the next couple years if it is a bad idea to continue putting a large portion of my money in the stock market with all of this money printing going on and talk of an upcoming market crash. does anyone have an advice or suggestions for my situation? should i sell a portion of my stocks now and keep cash since my primary focus is going to be real estate which is a much less volatile investment? What are some ways to save money for real estate without being negatively effected by inflation?
I'm kind of in the same boat. I do what's called Tail Hedging, you can google it but it's basically buying insurance against a big drop in the market. I buy a Put option with the Strike Price 20% below the current price a few months out with 0.5% of my invested money. If the market doesn't tank, you will lose the premium you paid like an insurance premium. If the market gets hit hard, your option shoots up in value so it functions similar to insurance.
Realistically, it's probably smart for both of us to just start selling a small percentage every week until you have the cash position you want at the time you expect to need it.