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Investing $1,000,000

Old 04-26-2007, 11:06 AM
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Default Investing $1,000,000

Hypothetically speaking, if you had a substantial sum of money you wanted to use for retirement income, what would you invest in for the highest rate of gauranteed return. What would you expect the highest gauranteed rate of return to be. I could not afford to loose this money.
Thanks
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Old 04-26-2007, 11:10 AM
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AAPL buy it now...and within two years, it will double. That IS what I did... (except I did it 4 years ago).
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Old 04-26-2007, 11:13 AM
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Never invest money that you can't loose in the market. 9-11-01
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Old 04-26-2007, 11:20 AM
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Default Re: Investing $1,000,000

All for long term growth (ownership !!!).....break it up amongst...S&P indexed annuities(good up front return)....
..then.....for LONG HAUL GROWTH...Stat Oil ASA ADS....Barclays....Chesapeake Energy...Duke Power...VF Corp..
GE...CISCO

The stocks are low PE...good earnings per share...decent dividend (reinvest them)



But all will require patience for the long haul and they are proven.....my theory...OWNERSHIP AND PATIENCE...

Jumping in and out of a market requires to much "risk"....unless you are not willing to accept the risk ...go for the long
haul and gradual growth .....
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Old 04-26-2007, 11:46 AM
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Default Re: Investing $1,000,000

In the financial world we consider US treasuries to be risk free. The longer term rates of return on US treasuries last I looked was in the 4.75% range or so.
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Old 04-26-2007, 11:47 AM
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Real estate. You might not make as much, but its proportional to the risk. Plus you own the property. Presently returning around 16% here.
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Old 04-26-2007, 12:02 PM
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Default Re: Investing $1,000,000

You could do worse than this:

1. Make a will

2 .Pay off your credit cards

3. Get term life insurance if you have a family to support

4. Fund your 401k to the maximum

5. Fund your IRA to the maximum

6. Buy a house if you want to live in a house and can afford it

7. Put six months worth of expenses in a money-market account

8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement

9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio

This is the famous Scott Adams (of "Dilbert" fame) "best investment advice ever". I would only add that somewhere between 25% and 50% of your index fund investing should be international, not domestic. I have gotten more interested in using exchange traded funds instead of mutual funds for this kind of thing, but that's really a detail.

There are two nice things about this approach. You will outperform about 75% of the other investers out there, and it does not take much time to set up or manage.

Sometimes simpler really is better.

Tom O
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Old 04-26-2007, 12:24 PM
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I would buy 1 million Powerball tickets.
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Old 04-26-2007, 12:50 PM
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Default RE: Investing $1,000,000

If I had that to invest I would contact one of the many financial planers and advisers that are aviable through your larger financial institutions.

I use First Wachovia here in North Carolina through a contact I have that I would be glad to steer you toward if you so desire.

Just a few hints:

There is no miracle investment. Remember as the return proportionally increases so does the risk.

It is of prime importance to have a good balanced and diversified portfolio.

Invest for the income and plan for the tax breaks.

Never overlook real estate as long as it is appreciating in a local growth market. (Tax breaks can be huge)

Now if the money is shall we say in a rather warm liquid state then you will need a third party non connected investor and the standard percentage rate for that is 10% on the return and 10% on the initial. When you go over 1m then the percentages drop.

Tight Lines
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Old 04-26-2007, 12:52 PM
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High returns comes with high risk. If you must have asset protection, and you say you do, than you have to step back and invest in lower risk investments which come with lower returns.
If you have $1 mil to invest and you are asking these questions on an open forum, then it sounds like you are somewhat of an investment newbie, in which case, I suggest you talk to a professional. Not just some stock broker, but someone who is trained and certified in investment planning.
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Old 04-26-2007, 01:12 PM
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I think Chuck34 had a great answer and ignore all the other answers you got. I am an institutional portfolio manager that manages $2billion in public mutual funds and am a Charted Financial Analyst. Do not go to a broker. They are under no legal obligation to to act in your best intereests. An SEC registered investment advisor MUST act in your best interest, and he is held to that legal standard. You're probably a newbie as chuck54 suggested. So just listen to what I have to say. A combination financial planner & investment advisor is your best bet. The level of risk you take is dependent on your net worth. Stocks will earn a high return, maybe. There have been periods of 20 years long where stocks didn't earn shxt, and they can be very volatile. Stocks are at record highs and between 1999 and 2003 they fell nearly 40%. If your money declines 40% one year, then you have to grow by 66.7% the next year to break-even. You need a professional to manage this money carefully. Professionals are aware of the importance of diversification, and most importantly asset allocation. Most individuals don't need to be buying individual stocksand bonds. Mutual funds are the best bet. 90% of your return is determined by asset allocation not the individual security selection. Contrary to what most people believe. A professional will do an exyensive review of your individual risk preferences. Very very important. They will also help with your basic education of understanding what drives the bond and stock markets. If you find somebody that recommends putting the whole block of money into stocks, go somewhere else. Real estate is very risky right now and so location dependent and highly illiquid. If you can't lose this money, as you say, then I'd look for someone that would put say at least 50-70% in the bond market. But alot depends on your age, future financial needs etc. Only a professional in your area can tailor the plan to your specific needs. Good luck.
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Old 04-26-2007, 01:22 PM
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moneybags, quick question. Since living too long can be as financially devastating as dying too soon, do you ever recommend any annuities in a portfolio for the really faint of heart?
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Old 04-26-2007, 01:29 PM
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WOW! Thanks for the great compliment. Can you tell my wife to listen to me and ignore all other's advice?

As a matter of disclosure, my son works for a financial asset management company and moneybags is not him or even a casual aquaintance.
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Old 04-26-2007, 01:31 PM
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Moneybags may have a different take on this, but I've always heard that annuities put the most money in investment advisers' pockets and that is why they have been pushed as much as they have been.
Am I wrong?
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Old 04-26-2007, 01:32 PM
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I'd get into one of these ETFs that specializes in long term tax free bonds and NOTHING ELSE if I was in your situation.

It's a relatively small amount of fixed income annually, normally 4-5% of your total stake and often tax free. If you're close, by close I mean within five years, to drawing Social Security checks and own your home outright, it'll give you a nice bit of income.

If you're unsure of which direction to take, I'd talk to multiple financial advisers at different firms independently. Just talking to one is going to do you more harm than good.
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Old 04-26-2007, 01:46 PM
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There is some very good advice here. The key is to become educated. A competent, educated advisor will do a much better job for you if you are an active part of the discussion. (disclaimer time - I am a fee-based advisor).

You asked about guaranteed returns. There are different ways to express returns. For example, If you are earning 4.75% and inflation is running at 3.5%, your inflation-adjusted return is only 1.25%, and that is before taxes on the 4.75%. As you can see, there is a lot to consider.

If you want a good place to learn the basics, I suggest checking out the Vanguard website. They have numerous articles on the basics of investing. In their planning section, there is an area where they show various portfolios and historical data such as average return, best and worst years and the number of down years since 1926. Even if you plan to retain an advisor, this knowledge will be very helpful. There is a sweet spot for every risk tolerance. You will be surprised at the difference in return between all bonds and 30% stocks/70% bonds without a significant increase in risk.


Good luck and try to learn as much as you can.
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Old 04-26-2007, 01:50 PM
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chuck34 - 4/26/2007 1:31 PM

Moneybags may have a different take on this, but I've always heard that annuities put the most money in investment advisers' pockets and that is why they have been pushed as much as they have been.
Am I wrong?
You are correct. The internal fees eat too much of your return. That is how the commission is funded. However, I have seen a situation where someone purchased a $250,000 annuity that went down in value to $200,000 and they died. The spouse received the $250,000. Although it worked in this situation, it would have been cheaper to buy term life. There are also "no-load" variable annuities available where the fees are not as high.
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Old 04-26-2007, 02:04 PM
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Default Re: Investing $1,000,000

I think I need to clarify. Lets say I have $1,000,000 that has been invested in different stocks, bonds, mutual funds, some real estate, fully funded 401's, SEP's, etc. Now I am going to retire and want to invest the money in something that will supply a dependable, safe, income. I would only want to utilize the interest, leaving the balance to the kids when I die. I don't owe any money except for two car notes. Thanks.
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Old 04-26-2007, 02:05 PM
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Besides annuities, are ya'll aware of any other products that will guarantee a certain payment for as long as you (and your spouse) are alive? That's the one part I like about the annuities.

Disclaimer: I am in the insurance business but am mostly property and casualty. However, I could keep the commissions on any annuities I sell to myself or my spouse.
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Old 04-26-2007, 02:11 PM
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cudacat - 4/26/2007 2:04 PM

I think I need to clarify. Lets say I have $1,000,000 that has been invested in different stocks, bonds, mutual funds, some real estate, fully funded 401's, SEP's, etc. Now I am going to retire and want to invest the money in something that will supply a dependable, safe, income. I would only want to utilize the interest, leaving the balance to the kids when I die. I don't owe any money except for two car notes. Thanks.
You still need diversification and that is where an investment adviser can help.
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