Stockbrockers HELP!. How to use $100,000 in Investment?

Question

Hi.

For an assignment we are acting as a stockbroker and we have a 16 year old client who has inherited $100,000. we must decide where we should put his money and why.

I am thinking go for long term capital gain. so in other words aiming to make profit over a long term.

I am thinking of putting about $40,000 in shares that will benifit not short term but long term and probably $25,000 in a high interest earning bank account just for safety.

Can someone please inform me if i am on the right track like is this what i should be doing and if not or you have better ideas can you please inform me. this also stil leaves me with $35,000 that hasn't been invested or anything, can someone give me some ideas what to use it with.

Thankyou and answers are very much appreciated.

Answer 1

I can recall the famous global investor (just passed away), Sir John Marks Templeton once said: " The most pessimistic time is the best time to buy; the most optimistic time is the best time to sell." It appears as quite a good motto for investors in the stock shares. I am living in the international capital of scams of stock market and real estate transactions, city of Hong Kong, and  learned it is not as simple as that. Soros once said that every stock share has a bubble, and he is the guy who destroyed many Asian countries' economy by trapping them into the monetary contract deals, however; he did fail in Hong Kong once. The most recent cases in Hong Kong were that manipulating stock shares prices in "Go and Put Warrants" deals have cheated the investors tens of billion HK dollars a while ago. There are about 400 fund managers are currently under prosecution in the US and quite a few in jail already. Do you know what and how big is the "Carried Interest" for those fund managers? An Hedge Fund manager, probably named Charles Lee Schmitt, cheated his Hong Kong clients for 3.8 billion dollars and used the "deposit money" (money for doing hedge fund tradings) and bought a house in Hawaii. He was sentenced four years imprisonment. I think if you insist investing is the best deal to earn money. It is quite safe to buy and selling currencies by applying Templeton's tactics. Also, it is a banker's way to make money for the bank. Don't be greedy.

I personally know there are lots of investors in stock shares trading in various ways have become flat broke, lost 10k to millions of Hong Kong dollars. My relatives' friend in Canada earned close to one million Can. and all got flat broke just recently. The fixed deposit is my suggestion to keep your $100,000 alive and live longer.

Answer 2

Invest 12% in high risk, 34% in real estate funds, and the rest in blue chip long term stocks.

Answer 3

well... you could consider a few things...

Sounds like you're on a solid track.  For the extra money, maybe something along the following lines...

Maybe a zero coupon bond if your client intend to save for college, because that's actually a short term need.

If thinking long term, invest in something that's riskier, because chances are he's young enough to ride it out.

Answer 4

Don't ask a Broker.  Think of their name "Broker"  Look at some energy stocks, they are bound to go up.

Answer 5

Go talk to a financial planner, not a broker.  The planner will have a better idea of a proper asset allocation than you will, and he/she will not be commission driven.