I recently inherited a modest sum of money and am trying to determine what to do with it. So, with the market as volatile as it's been recently, what are you guys investing in? Or are you? I haven't really been investing in anything new lately, so this is the perfect time to diversify. Besides my 401k at work, I have some individual stocks purchased several years back, but I haven't done anything recently. I also have a mutual fund that I bought into that focuses on leisure and entertainment. I've been pleased with it's results, but I'm ready to branch out. In the technology sector, I've heard that 'cloud' networking (if that's the proper term) is the next big thing and is potentially a huge earner. The trick is trying to determine who'll emerge as the market leader. Then there's gold, which is always a safe investment, but its already at an all time high. My first inclination is to say that, given it's current value, there's not much more money to be made, but in my research to date, firms that have put together mutual funds based on the mining of precious metals or gold have had incredible returns the last few years. Again though, how much is left to be made going forward for someone just jumping in? Any other recommendations that can be a jumping off point for the research I'm currently conducting?
If I were brave enough to do so, I would invest in silver. It is not nearly as expensive as gold and from what I have heard, as compared to historical averages in price increases in gold versus silver, it is undervalued. I find myself combing through my change looking for dimes and quarters minted before 1965 when they still contained silver. Other than that, I am an investment idiot so I stick to index funds. If you have any debts, I would consider paying them off. I used to be pretty anal about saving money on each payday, but when my savings account earns a paltry 0.5% interest rate, the money is better spent paying down credit cards or car loans.
Funny you should say that about silver. In my research of mutual funds, there's one called 'The Silver Box' (it almost sounds like part of a porn star's anatomy :hihi that's returned 282% over a 5 year period. Not too shabby. I'm just leery of funds like this because it seems like they've peaked. Maybe not. As for any debts, we just made the last payment on my wife's car last month, so that's an extra $600 a month right there. Mine is an old work car that's been paid off for a while now. We use American Express credit cards that we pay the balance on monthly, so we basically have no revolving debt except the mortgage, insurance on the cars, and normal monthly utilities and services. I guess I could always talk with a financial planner for additional advice, but I don't trust anyone to invest for me. Too many 'Bernie Madoff' horror stories out there. I'd rather lose it all myself then having someone steal it with no hope of getting it back.
I currently just use my 401k but I have hundreds and hundreds of funds to chose from since my company allows us to invest with a self brokerage account through Hewitt Financial Services. Right now I have Financial, Tech and some Asian and Latin international funds that are doing quite well. When I get home I'll get the exact ones and companies. You can research particular funds performance on just about any website. My funds have gained 20+% over the last five years except 09.
I'd get a Freedom 529 plan for the kid's college. I have one for each of my children. It's done pretty well. DM me if u are interested to know more. I can give you the number to my guy....
Yeah, we use Hewitt and can self broker as well, but we don't have any where near that many choices to choose from. We have Emerging Markets, a small cap fund (which has been the top earner over the last year), a stable value, and a few others.
Start an IRA if you haven't already and max it out every year for more tax-deferred retirement savings. If you already have a stock portfolio that you like, then buy some mutual funds in the IRA and in whatever non-qualified account you like. I like funds that hold a broad share of market sectors and not specialize in one narrow sector like technology or medical. Diversify for sure. Right now I'm about 20% international, 20% large-cap, 25% small cap, 10% bond funds, 15% non-market investments in gold and precious metals funds and in commercial real estate funds . . . and 10% in moneymarket cash. My non-market sector doubled the profits of the market funds last year. That's the idea, when the market is down, you make money in the non-market and in recoverys like the last 2 years, you make money across the board. Be suspicious of "the next big thing". Slow and steady wins the race. Those of us burned in the dot-com bubble have learned much. Make a lot quick and lose a lot quick go hand in hand. Then again, I'm fifty-five and very cautious with the pile I have. When I was younger, I could afford to be more aggressive and I did and it paid off. In the long term, market investors as well as gold investors have alway made money. We must believe that, in the long term, the market will always make money, else we should hold our money in cash. We get rich slowly but on an exponential curve in the market. Sometimes we lose money for a while and it annoys us. So we buy gold and special minerals because they move on another road from the market and can help sustain a portfolio when the market is down. SO gold and strategic metals and real estate investments must be a part of any diversified portfolio . . . but never all of it. Pick a level you are comfortable with. I took profits last year from some stocks that had been good to me but had plateaued. I'm keeping about 10% cash right now which isn't making me much money and is higher than normal, but I like to have cash available for when when the market is down. There are some stocks and funds that I've got my eye on and I'd like to have some buying power if any of them take a dip. I love buying low. I think the market will be up and down for a while and there will be buying opportunities for the patient.
