I have a question for anyone. I am 56 years old. Will soon get $50000.00 to invest. Have annuity, deferred comp, mutual funds and stocks. What to do with $50,000.00?
That really isn't enought information to begin to guess. If you don't have a clue to where to start you might get the book, "The Bogleheads' Guide to Investing".http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0471730335/ref=sr_11_1/103-9229411-0993419?ie=UTF8Greg
Welcome martanzana. Glad you could join us.Do you have a retirement date in mind? Have you worked out how much income you will need in retirement? And where it will come from?This will help a lot in deciding where to invest the new funds. Fools usually recommend equities, and especially total market index funds or S&P 500 index funds, if you have any doubt. That is because, the S&P tends to grow steadily over time and gives you better returns than you get from bonds. So you are more likely to be able to make your funds last for the 30 or more years most of us expect to be retired.Motley Fool used to have a retirement planning workbook, and occasionally there is a seminar on the subject. I think it is now available to subscribers to Rule Your Retirement. It walks you through the process for getting the numbers together to see how much you need to retire on and then how much investment you need to fund that retirement. There are also sections on how to close the gap if your costs exceed your funding capacity. Certainly there are other sources out there, but Motley Fool's is nicely done and easy to understand.
Asking what to do with 50K on a internet message board is dangerous.Put it in a MMF, power down your computer and read some books.Four Pillars of InvestingWinning the Losers Gamebuzman
Hello martanzana,I am just an occasional visitor to this board and pretty new to serious self-education about investing. Apart from agreeing generally with the responses already posted--especially the value in reading Four Pillars of Investing while leaving your $50K parked somewhere--I'll suggest that before or after pouring the $50K into an MMA you check the rates available at Treasury Direct (13 week and 26 week flavors) and for that matter on I bonds. The Fool's Bonds board may already have reasonably recent threads on the pluses and minuses of TD and Ibonds rates, for you to look at.hirundo
While I like I bonds, they carry a 3mo interest penalty if redeemed within 5 years of purchase.buzman
buzman writes,While I like I bonds, they carry a 3mo interest penalty if redeemed within 5 years of purchase.Assuming that one has room in their IRA/401k to buy a 2-year TIPS with a about a 2.5% coupon currently, why would one buy an I-bond with a only a 1.4% coupon?intercst
>> Assuming that one has room in their IRA/401k to buy a 2-year TIPS with a about a 2.5% coupon currently, why would one buy an I-bond with a only a 1.4% coupon? <<Well, in an IRA or 401K that's certainly true. But in a taxable account, maybe someone would prefer the tax deferral and state income tax exemption that savings bonds provide. Still, with a 1.4% "fixed" return component, it's still not very compelling. My regret is that I didn't buy more I bonds in early 2000 when they had a 3.4% fixed rate. I bought about $4,000 worth and now I'm wishing I backed up the truck on 'em.#29
My regret is that I didn't buy more I bonds in early 2000 when they had a 3.4% fixed rate. I bought about $4,000 worth and now I'm wishing I backed up the truck on 'em.They would be getting at most 4.62%, be careful what you wish for.http://www.savingsbonds.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htmGreg
I'm pretty sure that rate listing is the current rate those bonds are earning.The best piece of evidence is that the semi-annual inflation is 0.5%, and the previous set of bonds, with the 1.0% fixed rate, are listed with a 'composite rate' 2.0%. But for their first six months they were earning nearly 7%. So that rate must be current, and not a long term average.
>> They would be getting at most 4.62%, be careful what you wish for. <<That's not a bad "sure thing" guaranteed return when inflation was 1.2% annualized over the preceding six month period.This assumes you think inflation will continue to be 1.2% per year. I wouldn't ever see these as a replacement for any of my equity allocation, but for cash equivalents and as part of an emergency fund, yes.#29
buzman writes,While I like I bonds, they carry a 3mo interest penalty if redeemed within 5 years of purchase.Assuming that one has room in their IRA/401k to buy a 2-year TIPS with a about a 2.5% coupon currently, why would one buy an I-bond with a only a 1.4% coupon?intercst ------------------------------------------------------------------------As mentioned by another poster, I bonds work a bit better in taxable account.I like Ibonds but I mainly use TIPs simply because I believe a well balanced portfolio needs an allocation to that asset class.Rarely do any of my clients use Ibonds-unless you count my nieces and nephews who get them in their stockings at Christmas each year.buzman
Hi MartanzanaHere's an option.........This sounds like a windfall (i.e. not a planned retirement income source). Why not invest it in some high growth small cap companies? These are more volatile and risky but the reward can be much higher. If this interests you, I recommend you try a Hidden Gems trial subscription....it's dedicated to making some good gains in small caps.MW
Send it to me, and I'll invest it for ya! ;)
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