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Subject:  Re: investment stratagies Date:  2/6/1998  1:40 PM
Author:  Respectable Number:  1658 of 88543

"I am looking for an optimal strategy for investing $400 each month with the objective of long term
capital appreciation. I am 43 and my wife is 35 and we have one child who will need to start
college in 2007. We are modest wage earners, own a few stocks, have a little equity in our house
and expect an inheritance of around 300K sometime within the next 15 years.
I am finding the management of my discout brokerage stock portfolio tedious, and feel a monthy
contribution to a DRIP or no-load would more suit my lifestyle, but I somehow can't resist thinking
the inheritance allows me to take on the additional risk trying of trying to hit an occasional
Anybody got'ny ideas?"

I know Pixy already gave you a little speech on being responsible for your finances, so I'm sorry to sound like someone else giving you a lecture (people really don't lecture at others on the boards much, so I'm sorry if this is your indoctrination), BUT I do feel someone must warn you about counting a possible future inheritence into your retirement equation. My father suggested to me that he would be leaving me $300K when he died and to not bother saving for my son's college education or retirement, but I don't think it prudent to rely on someone's dying and leaving you money to finance important life events. It's like counting your chickens before they hatch. For one, people are living longer than ever, and who's to say that even if they stay healthy (not need medical care that can eat into their estate, especially if they don't have insurance to guard against this) that they won't spend most or all of the money before they die (my father is traveling all over the world and has been for the past 12 years since he retired, so I wonder how much of his estate is even left)? For two, even if there is money left for you when the person dies, it could be too late to finance what you are needing to do (send a kid to college, or even retire, as if you inherit $300K a few years before you want to retire, it won't have much time to earn compound interest and probably won't be enough to retire on, especially considering inflation). I would leave inheritance out of your equation, except perhaps for thinking of things you would like, but don't feel are truly needed (like a mansion or expensive car).
With that said, I know the Motley Fools recommend a S & P 500 Index Fund (like Vangaurd) for those who don't really like to watch their portfolio. I'm not sure how they feel about Payden and Rygel's Growth and Income Fund, but it is something I am considering plunking my $2K into this month. This fund hasthe method of having half its money trying to mimic the S&P 500 and the other half invested in the dogs of the Dow (another method the Fools seem to favor, though not as much as the well known Dow 5 method or their Dow 4 approach). It's a no load fund, but the expenses seem a tad high considering there is so little to do in managing this fund. If anyone happens to be reading this that has comments on the fund, I'd love to hear/read them. Whatever you do, good luck in your investing!

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