Quora Question: What are the Best Options to Invest around $10,000 Monthly for the Next 30 Months?

The following is my answer to a Quora question: “What are the best options to invest around $10,000 per month, for the next 30 months?  I am interested in getting moderate returns, but am averse to high-risk.”

“Best options” depend entirely on what the money is for at the end of the period.  Thirty months is a short investment horizon.  Ten thousand dollars a month is a substantial sum.  Aversion to high risk, paired with a short horizon, narrows the field fast.  The instrument needs to stay liquid.  The return needs to clear inflation.  Most aggressive options fail one test or the other.

Lump-sum investing beats dollar-cost averaging two-thirds to three-quarters of the time, when the choice is between deploying a windfall immediately or spreading it out.  That research does not apply here.  Someone receiving $10,000 a month has no lump sum sitting idle to deploy on day one.  He is building the sum over time by necessity, not by choice.  Dollar-cost averaging in this context is simply how the money enters the market as it becomes available, and it still delivers the behavioural benefit: it removes the temptation to time entry, and it smooths the average price paid across thirty separate purchases rather than one.

The Allocation

Put the funds into a mutual fund or collective investment scheme.  Allocate forty per cent to debt securities for a measure of capital protection.  Allocate the remaining sixty per cent to equity securities, so the return justifies taking on the position at all.  A collective vehicle spreads exposure across sectors and markets, lowering the risk tied to any single market’s fortunes, and building an immediate balanced portfolio from the first contribution rather than the fifteenth.  The structure stays liquid throughout, meaning the funds can be withdrawn at the end of thirty months without penalty.

The Expected Return

At low to moderate risk, expect a return between 4.5 and 6.5 per cent, managed properly.  Engage a financial services consultant to select the actual funds, since the general allocation above is a framework, not a stock pick.  A pivot toward East Asia, excluding Japan, remains a reasonable regional tilt for this horizon, given the region’s growth profile relative to developed markets carrying flatter demographic and earnings trajectories.  It takes real effort to lose money on an allocation built conservatively, provided it is executed properly rather than left to drift unmanaged for thirty months.

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Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code