A friend's father asked me to offer ideas on investing $140k that they received from an asset sale. Preservation of capital is important, but so is at least meeting inflation in returns. Their only income is social security, so basically no income taxes are being paid. I'm thinking of a small portfolio of mutual funds that include short term corporate and government bonds combined with a REIT fund and a blue chip fund. I considered long-term bond funds, but the only way they seem to make sense to me is if you think there won't be any inflation, which seems improbable. Among things I've looked at are SCHJ, BAGIX, FBCG, and PPTY. Not attached to any of these at all, but interested to hear thoughts for this situation. Very much appreciate your thoughts.
I would suggest you consider a single managed Vanguard Fund. Wellington.If you put $10,000 into Wellington on June 30, 2008 your lowest month value would be February 28, 2009 with $7280.29 -- pretty darn frightening drop - more than 25%! Our last pay check was dated May 2009 and our future did not include pensions.As of June 30, 2013 the Wellington account would have had $14,230.65.The 5 year compound return through the "Great Recession" was was 7.31%The 4 year and 3 month return from the early 2009 low until June 2013 was 17.08%To minimize market risk for withdraws, we direct all our distributions from Wellington and other Vanguard Funds to a money market.
Over time, its tough to beat an S&P 500 index fund (such as Vanguard 500 Index fund, ticker VFINX) or the equivalent etf, ticker SPY.Some managed funds can beat the indexes but over time, the index funds usually win.
Interesting idea. Fidelity (my broker) says that they're closed to new investors, unfortunately. I'll have to see if Fidelity has any similar funds.Thanks!
Yep, but definitely don't want a heavy stock component at the stage of life. Can't afford to lose much principal in case of a "health event."
I still say SOME stocks are good investments. We've enjoyed the steady quarterly dividends of AT&T (T) for example, and I also like B&G Foods (BGS). However, for nice steady returns, those index funds are probably good bets.Vermonter (We exist happily on our SS income plus some meager returns from things like AT&T, which has paid quarterly for many years.)
... meager returns from things like AT&T, which has paid quarterly for many years.That's what I thought about GE when I owned it.
That's what I thought about GE when I owned it.Man, unfortunately I still own a boatload of GE and it just won't hit my sell price. I've had it for years and was stupid enough to add to it.Live and learn but what an expensive learning experience.
Live and learn but what an expensive learning experience. My dad (The old NoCount) said, "The school of hard knocks is a good school, but the tuition is high."CNC
I think I may have misled folks with my observation about "meager returns from AT&T". Actually, we're pretty happy with the quarterly checks that we get from them, and suspect those will keep coming."Meager" is relative. AT&T beats the heck out of most funds -- and certainly any savings account interest!Vermonter
I hope you are aware that AT&T has made statement that the dividend will be cut. Estimates are a cut of 40%https://www.fool.com/investing/2021/05/19/an-att-dividend-cu...
Ma Bell must be rolling over in her grave. :(
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