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Author: martybl Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8  
Subject: Re: Diversifying Date: 9/30/2006 2:15 AM
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at this point I would like to diversify so I can sleep better.

Don't know the rest of your portfolio, but it sounds like this one holding is the bulk of your portfolio. Agree completely about diversifying, if this holding is indeed the majority of your assets. If an unexpected scandal, or accounting fraud, or even an earnings miss or analyst downgrade hits, you're in trouble.

If my assumptions are correct, I wouldn't spend a second thinking about tax minimization. Fifteen percent is cheap by historical standards, and leaves you with enough to live VERY nicely on, while passing on a significant estate to your heirs, or your favorite charity. $8.5M is still a LOT of money - a lot more than if something were to cause eBay to tank.

A guy at Edward Jones laid out a plan that would give that would generate about 3-4% in cash returns, and 8-9% in equity value increase.

They make it sound so certain, but the market isn't that certain. If a bear market hits, you may get that 8-9% over thirty years, but who of us is certain that we'll be around that length of time? In the short term, you may well be down a significant amount. I would be very reluctant to let Edwards Jones manage my money because of their costs. It sounds very suspicious to me that they're planning on 11-14% annualized return - sounds too good to be true, unless they're going to take significant risks.

If I had an extra $8.5M lying around, I'd probably put $100K for immediate expenses into my local bank, and link to an ING account for another $100K. I'd then probably open up a brokerage account with a low-cost broker - I use Schwab, no worse than anybody else. I'd probably put another million or so into money market funds, then the remainder into investments. For ease of investing, you can't beat the Life-Cycle Fund of Funds approach, something like SWBRX.

While your money is safely diversified, you can research investing at your leisure, but I wouldn't leave my money tied up in a single dominant stock while I considered my options. It looks like you're new here. I'd also head on over to "Millionaire Fools" http://boards.fool.com/Messages.asp?bid=113485 A lot of us over there manage seven figure portfolios, and some manage eight figures. You're likely to get a lot more responses over there.

Good luck,

martybl
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