Best Way to Invest Cash A reader recently asked what to do with several hundred thousand dollars that he received when he sold his tech stocks. What a great problem to have, you come into $100,000, $500,000 or more, in cash and you’re wondering how to invest it. Investing large sums of money into the stock market all at once can be frightening, especially now, when the stock market is overvalued. It’s a well-known tenet that when stock prices get ahead of their underlying value, at some point, those prices will fall back in line with the company’s valuation. But here’s the catch, stocks can remain overvalued for years, and years. This article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. Price Earnings Ratio source: Shiller PE Ratio – Multpl The average Shiller PE ratio is 17.19, in contrast with the January 2025 PE ratio of 37.74. According to this metric, the S&P 500 is overvalued by roughly 100%. No wonder, the reader is concerned about reinvesting his windfall into the stock market today. What if he invests $100,000 or more into the stock market today and within the year, the stock market takes a tumble and falls 20%. His $100,000 is then worth $80,000. Here are the steps to take when considering “How to invest $100,000 or more.” Questions to ask before investing large amounts of money in the stock market: Will I need the money soon, within the next few years? How would I feel if I invested the money in the stock market today, and next month the market dropped 20%? Can I leave the money invested in the stock market for seven years or more? Keep your answers in mind, as you review the article and watch the YouTube video below. Next we’ll explore how to invest a cash windfall in the stock or when to invest a cash windfall in a high yield liquid asset. How to Invest a Cash Windfall, if I Will Need the Money within the Next Five Years? If you are wondering the best way to invest a cash windfall but will need the money within the next few years, then your answer is simple. Any money you’ll need within the next one to five years should not be invested in the stock market. The reason is that the stock market is volatile and could decline precipitously at any time. If you’re planning a large home remodel, buying a new car for cash or buying a home and need a large down payment, then don’t put your cash windfall into the stock market! The risk of loss, is too great. Here’s the best way to invest cash short term. The key to short term investing is to make certain that the principal value remains steady and funds are liquid. This means you’ll trade the potential