If you need to post on a messageboard for help, you are not the right person to help your relative.
If you really believe it's going to go up 10% every month, you should take out $100,000 in credit card debt (at the relatively cheap price of 1.5% a month) and just buy all Google stock.
[Edit] ...and post your receipt when you do
1. Find two financial planners that charge low comissions and are trustworthy (Look for CFP as others have recommended and CFA). Interview them and how they perform, look at their long-run performance (Min 5 years), furthermore, see if they conform to any performance presentation standards, so that they don't have a surivor bias in their performance (they only show the accounts that are still good or performed the best, not those that performed poorly or left the firm).
2. Invest 250k with each one after they have worked to get an investment performance statement that fits your friend's investment needs. One big thing they will look at is his/her *ability* to take risk as opposed to the *willingness* to take risk. 500k is a decent chunk of money to be able to take risk.
3. Check up on the advisor regularily, make sure they are not taking more or less risk than what was put down in the IPS. Also make sure they are not flipping the stocks or doing anything else to pump up comissions.
4. If your friend is within 5 years of retirement he/she should invest heavily in bonds. If he/she is within 10 years, a 60/40 mix of bonds/stocks should be appropriate. If he/she is outside of 15 years to retirement he/she should be 40/60 bonds/stocks, and 20 years+ should be somewhere around 20/80 bonds/stocks.
Now, when I say stocks I don't mean "Wow, GOOG looks good". I mean, a broad-based index fund such as a SPDR (S&P 500 index fund) or a good mix of equity funds. I am a contrarian investor and I look for value funds (those with fundamentals that are strong but the market has underpriced them). Other people look for growth (somewhat overpriced, but the idea that that price will be justified in the future by growth). Yet others are heavily into international funds. Here is a mix I would recommend for somebody still a bit risk-averse.
20% - Value equity funds
10% - Growth equity funds
10% - International equity funds
60% - investment grade bond funds
You get some exposure to risk, but at the same time you will enhance your returns. You have a strong base of bonds.
The biggest problem with people investing is that they invest the wrong way. They go for a few flashy stocks, get burned, and think the whole market sucks. Those stocks sucked because they invested on familiarity and old-news. People who don't know how to invest well need to invest for long-term growth through equity mutual funds or index funds, *NOT* specific assets. If the person doesn't invest in equity because they are now gun-shy, they will lose out on a lot of money.
If you want to discuss further, feel free to PM me. I personally do not do portfolio management, but I have passed all 3 levels of the CFA program on the 1st try and I work in capital management for a fortune 100 company. I am not some guy who just read a couple books.
2. Invest 250k with each one after they have worked to get an investment performance statement that fits your friend's investment needs. One big thing they will look at is his/her *ability* to take risk as opposed to the *willingness* to take risk. 500k is a decent chunk of money to be able to take risk.
3. Check up on the advisor regularily, make sure they are not taking more or less risk than what was put down in the IPS. Also make sure they are not flipping the stocks or doing anything else to pump up comissions.
4. If your friend is within 5 years of retirement he/she should invest heavily in bonds. If he/she is within 10 years, a 60/40 mix of bonds/stocks should be appropriate. If he/she is outside of 15 years to retirement he/she should be 40/60 bonds/stocks, and 20 years+ should be somewhere around 20/80 bonds/stocks.
Now, when I say stocks I don't mean "Wow, GOOG looks good". I mean, a broad-based index fund such as a SPDR (S&P 500 index fund) or a good mix of equity funds. I am a contrarian investor and I look for value funds (those with fundamentals that are strong but the market has underpriced them). Other people look for growth (somewhat overpriced, but the idea that that price will be justified in the future by growth). Yet others are heavily into international funds. Here is a mix I would recommend for somebody still a bit risk-averse.
20% - Value equity funds
10% - Growth equity funds
10% - International equity funds
60% - investment grade bond funds
You get some exposure to risk, but at the same time you will enhance your returns. You have a strong base of bonds.
The biggest problem with people investing is that they invest the wrong way. They go for a few flashy stocks, get burned, and think the whole market sucks. Those stocks sucked because they invested on familiarity and old-news. People who don't know how to invest well need to invest for long-term growth through equity mutual funds or index funds, *NOT* specific assets. If the person doesn't invest in equity because they are now gun-shy, they will lose out on a lot of money.
If you want to discuss further, feel free to PM me. I personally do not do portfolio management, but I have passed all 3 levels of the CFA program on the 1st try and I work in capital management for a fortune 100 company. I am not some guy who just read a couple books.
Originally posted by: b0mbrman
If you really believe it's going to go up 10% every month, you should take out $100,000 in credit card debt (at the relatively cheap price of 1.5% a month) and just buy all Google stock.
[Edit] ...and post your receipt when you do
No not every month, and I do admit I am not one of the most savy stock market investors
, but I have been following this pattern of 380-420 since March or so, and it's been a fun ride. Might I just add that Google is currently at $470 and will probably break 500, too bad you didn't listen.
People win putting it all on black at Vegas tooOriginally posted by: SVT Cobra
Might I just add that Google is currently at $470 and will probably break 500, too bad you didn't listen.
Very high risk can bring a high reward, but if it's your retirement money that kind of gamble is usually foolish.
S&P500 and other stock index funds are a lot safer even if they only return 10-12% a year.
DainBramaged
Lifer
- Jun 19, 2003
- 23,454
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S&P 500 is up 12% for the year, and the risk is much lower.Originally posted by: SVT Cobra
Thank you, thank you all.
Google is at $509, good thing I took my own advice
Google: one bit of Sony-level mismanagement and they could lose 20% of their value. Same if people ever stop paying $10 for a hot adword. Same if a class action hammers them for allowing too much click fraud.
S&P 500: 500 different companies. Your eggs in 500 baskets instead of one. VFINX is your friend.
But :thumbsup: on being lucky so far
Google stocks. Crap, I hope nobody that is in the investing game heard that. I think I'm the only one that has stocks in google.
It sounds like you're looking for a capital preservation move. If you think stocks are risky, you're not buying the right stocks.
Most capital preservationists will put your assets in bonds, tbills, debt securities. The return is extremely low, but true it's nature is capital preservation.
I have a high tolerance for risk. Recently, I moved everything into a growth model my broker reccomended. I'm holding 10 mutual funds that have returned about 3% since he took the account on the first.
Comparitavely, he's already outperforming the S&P but that's with my tolerance for risk.
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