Large amount of money to invest?

Question

Me snd my wife are young and jsut inherited 785,000. I have an uncle thats a stock brokcer. everyone keeps telling us to do different stuff whats your advice.

Answer 1

For what it is worth, here is some specific advice.

100,000 into a money market account.  That is your fall back fund.  You can divide that up into 2 portions if you wish  50,000 money market and 50,000 in 1 year CDs.

100,000 into T Rowe Price Capital Appreciation fund.  This is moderate allocation fund with a decent track record. 100,000 into Vanguard S&P 500 index fund.

100,000 into Vanguard Global Equity Fund,

200,000 into Vanguard short term investment grade bond fund,  

50,000 in T Rowe Price emerging markets fund,

50,000 in Royce Pennsylvania fund (a small cap fund),  

85,000 I leave to your discression.  

This is a diversified investment portfolio and should over time return about 7 to 8% annually with less than market risk.

Answer 2

Get some professional advice.  Interview several brokers and financial planners.  Be careful of the ones that promise too much.

Answer 3

My experience: Retired from a career in finance - investments, investment banking, financial planning, etc.

My advice: Make sure you have an emergency fund set aside in something like bank CD's, short-term treasury securities, etc. Put the rest in mutual funds.

Pick maybe five mutual funds based on their historical performance (look at 1, 3,5 and maybe even 10-year performance). Make sure the same manager has been managing the fund for the past 5+ years (if the a mutual fund changes it's portfolio manager, it's prior track record becomes meaningless). I would generally recommend you invest in "no load" funds (these are funds that do not have a front or back end fee that is paid to the broker). There are various web sites that can help you with this process, e.g., Fidelity, Morningstar, etc. Once you've picked the funds, then divide up your money into, say, 12 equal amounts and invest that amount into the 5 funds each month (this is called dollar cost averaging and helps to make sure that you don't buy all your funds at the top OR the bottom of the market). After 12 months, all you funds will be invested and you should then monitor the funds to insure things don't change that would make you re-consider the investment (like a change in the portfolio manager).

Answer 4

it is a big sum of money. I wouldnt suggest to put them in share equities. Have you ever thought to invest in property?

The stock market is so volatile currently, but the property investment is never as the past has proved. Buy one or two houses and lease them

Answer 5

Congrats. Investment is good, but do find for the right one. There are a lot of scams goin on these days. Just be careful. I would suggest that fixed deposits are much safer and stable. What's the worst could happen. But should you consider to invest in some part of Asia, (if you're not asian), then i would probably share a business deal with you. Not much, but the growth and future of the plan looks good and realistic.

Answer 6

Also, just FYI  I know people would say invest in real estate, but the market is a buyers market right now....NOT A SELLERS MARKET so that might not be the best thing to do.  Really get some advice, and dont tell htem that you have that great amount of money, they might try to swindle you.  P.S. Do NOT invest all in the same place.  Make several different investments just in case a couple of them migh not be soo profitable.  

Well, congrats on ur inheritance!  (Don't forget the family and very very close friends who were there for you in the rough times!)  (Don't tell them how much the investment is either, just live life like you think is fit and comfortable and don't blow it on many wants.  Ust it for needs.  Invest in your personal health insurance plan and don't give away mony to health insurance companies!!!)

Answer 7

I personally think you should put take a small part of the money and get yourself educated on managing your personal finances. You can get books, attend seminars or visit websites to increase your financial literacy level.

While educating yourself, you can put the other part of the money into money market funds to earn some interest.

Once you are confidence, it is time to start using the money that you have placed in money market funds beforehand and start investing. While investing, remember to learn from the process to gain practical experience.

Hope the information helps!

Answer 8

It is a very difficult task to decide what to do with inheritance.

What I will say is more of a question.  What do you want to do with it?  You say that you are young.  Do you have children?  Do you make a good enough wage to invest this money?  Do you need any of the money for outstanding bills?  These are just some of the basics that you should ask yourself before that you think about investing.

You should read some basic investing books, to give yourself an idea about what can happen to different investment types.

I also think that if at all possible you should AVOID putting your money with a family member.  Reasons are plenty.

I would look around for a good financial planner (C.F.P.) who will talk to you, educate you, and help you decide whether you want to do this yourself or get professional help.

Good luck to you.

Answer 9

I don't think you should listen to anybody above.  I think she you consult several different money manager, financial planners at some of the much larger institutions etc.

For the previous person commenting on real estate, a buyers market is when you want to invest in real estate.  Buying when prices are low and selling when they are higher is how investing works.

Another option, and one that I think is probably the best, if you can get in, is putting your money with a hedge fund manager.  These hedge funds are basically where the rich put their money to make huge profits.  And they are quite fickle so, hedge funds out there that have been around longer than 5-10years are still there because they have consistently brought in returns each year, and most likely returns over 20% or over.  In investment terms, thats outstanding.  The problem is that they have minimum investment requirements, so maybe one will accept you.

Anyway, research, reasearch, research before you place your money with someone.  I think this is you best choice if you are not familiar with investing nor have had this much money before.