Investing Opinon

[Skillet83]

Saw a current thread regarding investing, thought I would ask. Assuming a small 7 figure cash amount, what to do? Real estate is covered. Preservation of capital with some return is goal. My thought is we have a correction coming. Stay in treasuries, bond funds? Opinions please.

[Steve Viegas]

That is a good chunk of money. I would think you would want to diversify. REITs are a way to get in the stock market and real estate at the same time.

If you are simply looking for income, there are a number of solid stocks that pay 4-5% dividends. They have done so in good times and bad, so while not necessarily preserving capital, they generally preserve income.

Personally, I like real estate. Lots of options for that kind of money and it becomes very easy to leverage. Of course, if things go south, you may not want to be too leveraged.

Sorry for the non-answer, but I would seriously consider diversification.

[Bill Verburg]

Originally Posted by Skillet83

Saw a current thread regarding investing, thought I would ask. Assuming a small 7 figure cash amount, what to do? Real estate is covered. Preservation of capital with some return is goal. My thought is we have a correction coming. Stay in treasuries, bond funds? Opinions please.

A lot depends on time horizon, other current sources of income relative to needs and how strong a stomach you have.

Trying to predict the future isn't something many of us do well, best to have a diversified plan and then dollar cost average into low cost index funds and invest for the long haul riding out the intervening ups and downs, trying to time the market is a fools game.

Currently an S&P500 index returns ~2% in dividends per year + what ever capital gains the market allows, better than most bond funds, you can expect that to vary in the future, hence diversify into the total market and bonds, the % of each depends on time horizon and stomach for risk. If you have a reliable source of other current income you can have more % in stocks if your stomach can take the inevitable ups and downs. if this is your primary source of current income you will need to be more conservative, usually this means more low yielding fixed and bond investments

[tabs]

Stock market has been flat since the end of QE3 in December 2014.

The economy is at 1% growth. While equities are near all time highs.

Check big cap dividend paying stocks trading range and buy near lower end of that range. Creates income stream with reduced risk.

[lukeh]

Saying "preservation of capital" tells me you are looking at zero risk of losing your principal. If that is the case look at a structured CD. It is FDIC insured and the callable versions pay a premium in the 5 to 6 percent range. Not a bad deal for your safe money.

[fanaudical]

My understanding is that structured CD's make money as long as the funds/investments they are linked to make money. Best case is you make some money on the CD. Worse case is you get your money back with zero interest (for the FDIC-insured structured CD's).

[Bill Douglas]

I assume you guys are allowed to buy this sort of stuff. Browning machine guns have gone up in value in leaps and bounds. Uzi's, particuarly ones with Hebrew writing on them and a bit of genuine wear and tear are popular. These classic pieces of firepower seem to be nicely going up in value . I wouldn't bother with ordinary stuff like Stirlings or Chinese made stuff although some of the Chinese made stuff is awesome.

[wildthing]

Question is, where is the money now?

If I suddenly got a low 7 figure number today, I'd probably stick it into an S&P index over time, maybe 12 months, and leave 20% in cash for the correction swoop in.

This assumes I will not need the money until 30 years later.

Financial advice is personal. What may work for me may not work for you. You may want to find a good financial planner with a fiduciary duty to you, one that charges by the hour, just to review everything. Try Napfa.org to start.

[id10t]

Originally Posted by Bill Douglas

I assume you guys are allowed to buy this sort of stuff. Browning machine guns have gone up in value in leaps and bounds. Uzi's, particuarly ones with Hebrew writing on them and a bit of genuine wear and tear are popular. These classic pieces of firepower seem to be nicely going up in value . I wouldn't bother with ordinary stuff like Stirlings or Chinese made stuff although some of the Chinese made stuff is awesome.

Yup, NFA stuff is legal in most states. Artificially expensive, not to mention a long process between payment and possession.

[Cajundaddy]

Time horizon is a very important question to answer as well as risk tolerance. Everyone seems to be on the same page here. For lowest risk, diversify investments into many different categories. Some will always be going up while others are going down but long term you will ride a rising tide.

My personal choices may not fit yours but I like income producing RE, index funds, dividend stocks, a few more volatile investments (2%) and 20% or so in cash to take advantage of opportunities.

[lukeh]

Originally Posted by fanaudical

My understanding is that structured CD's make money as long as the funds/investments they are linked to make money. Best case is you make some money on the CD. Worse case is you get your money back with zero interest (for the FDIC-insured structured CD's).

That is correct. I like the JP Morgan efficiente index as it averages roughly 5%, has had only had one negative year and was positive in 2008.

Worse case is you get your money back and that is what someone looking for "preservation of capital" is asking for. Putting money into the S & P 500 or other equities would not fall under "preservation of capital". That would fall under long term growth and willing to risk principal.

[tabs]

Buy physical Gold and Silver.

Read the news about domestic political turmoil. Read about how unstable the foreign situation is. Read about the no growth US economy and climbing debt. Everything is fraught with risk, everything. The risk meter is red lining. There is nothing safe nor secure. Nobody alive has ever seen it this bad on so many different fronts.Even holding cash is not secure anymore.

[tabs]

The world seems to like US treasuries as that is the last best refuge. With a 1.76% return on the 10 year you can see how nervous people are globally as the all time low was apx 1.38%.

Now the thinking in DC is that 30% of 401k funds have to be invested in US treasuries. The govt is licking their chops on that one. That maybe the only way for the govt to sell the debt that they are creating.

[on2wheels52]

I'd be more inclined to recommend metals if they beat inflation over time. Silver has gained less than 2%/yr since ......Napoleon? And that without accounting for inflation.
I still have a fair amount of gold but have far more invested in stocks & mutual funds.

[tabs]

I just dont like what I see now. Everything is on shaky ground right now. I just have an uneasy feeling that some kind of bomb is going to go off.

[MikeTate]

To me real estate seems a more reliable investment in a long term. 1) It is not affected by economic turmoils as much as stock markets 2) Also short term rentals promise you decent returns - about 5-7% yields. Hiring a management company helps to avoid any problems . Its service costs 20−25% of the total rental revenue but the expenses will be rewarded with higher occupancy rates. So you just choose a one-bedroom apartment somewhere in the city center popular with tourists. Barcelona must be a promising option in terms of property prices and number of tourists https://tranio.com/spain/catalonia/barcelona/

[Skillet83]

Thank you for the replies. I currently own rentals, buying more. Purchased another 500 silver eagles today, stacking. Spoons and ammo covered. Guess going to stay in cash until after the election or first of next year. I do appreciate the opinions offered.

[Giranaeama]

Why dont you look for international investments??? I mean Asia.... I have invested cash amount with more than 7 figures)

[Giranaeama]

Are you looking for another country to invest?

[flatbutt]

Uh oh!