Best investment or fund?

Question

My wife and I jsut inherited $785,000 whats will be the best investment or fund to put the money in with low risk but enough interest or dividends to live off of.

Answer 1

Warren Buffett's two rules of investing:

1) Don't lose money

2) See rule # 1

You're in a great position financially.  First and foremost, make sure you don't lose that money.  Secondly, as Mr. Buffett pointed out recently, if you're a novice investor, invest in low cost index funds like the ones offered by Vanguard.  After fees and taxes and everything else, only about 15% of mutual funds outperform the market (or indexes).  So unless you think you can pick the 15% of funds that do better, you're better off in the index funds.

Secondly, don't invest all of your money in the market at once.  This advice also comes from Mr. Buffett.  Do a little bit here and there so that you spread out the timing of when you invest to reduce risk.

For income, there are a number of blue chip stocks that offer nice dividends.  With inflation running north of 4% (some say much higher), a divident yield of 4% at least keeps you competitive with inflation.  Plus you get the potential upside of an increase in stock price.

Buying into safe treasuries right now means that you're going to lose money against inflation because the rates are so low.

Cash is not a bad place to be right now.  And again, remember Mr. Buffett's two rules of investing.

Answer 2

You will have to decide what you mean by best.

The safest investments will guarantee you get all your money back with a small amount of interest these may be banks building societies , government bonds etc. Others investments will pay you more interest but some will not guarantee to pay you back what you invested and so are more risky investments.

Answer 3

Not that you'll need BIG dividends or gains  on that kind of lump, but it never hurts to go with the best....currently ( and for quite a while) that's been CGMFX...this guy is GOOD ..up 15% in this terrible mkt...up 60% last few years...

Another option for some part of your money would be investing in Canadian Royal Trusts...( Canadian " energy" companies) that pay MONTHLY dividends... you can just about sit down and figure out how much you have to invest to get $ 100. per month...or $1800. per month ...or whatever it is you think you'll need...   HTE pays 30 cents per share...PWE pays 34...there are others...AAV, ERF, BTE...

" canadian" ( friendly) " energy" ( necessity)...elements of a nice, safe investment.

....and here's option NUMBAH three...page ahead to a question by someone named " Ternie"  about "401s and IRAs."..read it... count YOUR blessings...then find someone in your town in that kind of boat...and give 'em a hand.

( The kind of thing that will give you a bigger boost than a few percentage points of interest )

Love this country, don't you ?