Questions for people knowledgeable about the stock market.?

Question

Two theoretical questions...

1) If I recently came into a large amount of money, say $12,000,000 what company should I give it to, to handle it for me?

2) How long would it realistically take to quadruple that amount?

Answer 1

1) Mutual funds, hedge funds would be the prudent vehicle to use along with ETF's to diversify yourself between at least 8 different investment styles and/or vehicles, so you never have to worry about loosing everything, as the Bible's King Solomon wisely preached.

2) Less than a year is possible, but not likely, as there is luck on how fast other investors come in later to drive a stock's price lower or higher depending if you are using put or call options positions and would have to be concentrated trades with substantially more risk. Greed is not prudent to force trades for maximum return but let the market takes it own do course to make profits in an account.

Answer 2

If you had $12 million why would you need to Quadruple it, you couldn't live with that??

What you should do with that kind of money is find a safe investment vehicle, like you could by Gov. bonds, or buy old company stock that are going to be around for a long time too, as you want you money to last, and you could put in an investment companies hands and they will keep it for you and pay you what ever you want a month or a year, and give you a bit of interest for leaving it in there hands but some charge a lot for this kind of work, but look around if the need be! Ok

Answer 3

Your 1st responder is correct, but what he did not tell you is that that institution would charge you about 1% of your assets to manager your money for you, perhaps more.  And they may not do a bang up job of it either.

Perhaps a better plan would be to give it to Vanguard so they can invest part of it in their S&P index fund with a fee of only 0.15% and part of it in their international index fund with an expense ratio of 0.40%.  And part of it in their bond index fund with an expense ratio of 0.19% or their muni bond fund perhaps.  Maybe in a ratio of 1-1-1.  I would not be surprised at all if you were to wind up with a better overall return than if you went to a high priced money manager.

2.  At 8% annual return considering taxes and reasonable living expenses about 25 years.

Answer 4

I wouldn't "give" it to any company.

I'd recommend that you immediately deposit it in a brokerage account. (I use Schwab.) Then as something to do while you figure out what to do with it, put at least half in t-bills or municipal bonds that pay interest. -- with that much in t-bills or munies you will ALWAYS have more than enough income to live on quite comfortably. You can ask the Schwab brokers for recommendations on this.

The rest you could put into big blue-chip stocks that pay dividends, GE, CAT, IBM, MSFT.

Avoid doing speculation unless you find it fun, and are willing to work at it. and you'll be set for life.

Answer 5

With $12m you could have any of the major investment banks or commercial banks handle your money (their wealth management divisions), and be treated as a high net worth individual -- treated better, first pickings at IPOs, etc.  $12m wouldn't make you their biggest customer by any means, but you'd get preferential treatment.  You could also give it to a hedge fund.

Quadruple - 10% annual returns is a rough estimate of fair performance, so that'd take approx. 15 years of compounding.

Answer 6

I hear Africa could use some food, water, and medicine. But that might just be a rumor.