Investment Advice

[Smitty1]

Hi Guys

 

I recently came into some $ when my grandfather died - I now have 40K to invest - I don't have a mortgage - paid that off last year.

 

I currently have the $ in the bank - they want me to invest it into a 3.85% 3 year GIC - I think that is really low - I am looking to get a good return without a lot of risk - I would like to keep the principal safe.

 

Any suggestions? I know someone is going to suggest giving it to them...but serious help would be appreciated.

 

thanks

Smitty

[ch312]

your bank can stick it up their wazoo

 

with an ING savings account i believe you now earn 4% interest and you can take your money out any time you please. i had nearly $35k in my account a couple years ago and i was making around $110/month of interest. it isnt much but its 100% risk free and you can withdraw or add money any time you wish.

 

real estate? buy a triplex, put $25k down and use $15k for renovations. once its paid off you will be bringing in $2k/month at least

[ccmtcanada]

With that much to invest, why not talk to an investment advisor?

 

You'll get varying opinions here on a fishing board.

 

It'll depend on your risk aversion, how accessible do you want your cash at any given point in time, what your overall investment goals, how much work do you want to do with your investment, are you planning on investing long term for retirement or short term for a large purchase etc....

[Musky or Specks]

My advice would be to not ask for investment advice on a fishing board or better yet dont follow any investment advice you get on a fishing board

[Pachone]

Hey Smitty,

 

Right now alot people are scared to invest because everything is crashing... but you must look at it almost like everything is going on sale... buy now when things are cheap!

 

Talk to an advisor or an investor.

 

Depending on what you want from that money, or what your age is... I would put it in a mutual fund that is global, not american lol. Find a company that has been winning all the awards and has good performance. Also look for companies with fund managers, people depend on the funds doing well or they dont make money. They average around 12%

 

Maybe put a down on some property in a few months when the housing market drops here in Canada... remember, buy it when its on sale because certain things AWALYS go up. eg. property.... they dont make that stuff anymore..

 

Pm me on maybe some more advice or places/people I can direct you too.

 

Oh... and DONT put it in a GIC... inflation is almost higher than those rates!

 

Pachone

[Beans]

The big horse is running in the 10th race at Kawartha Downs on Saturday Night...

 

Trouble is...If you bet more than $200 the horse becomes odds-on favourite...

 

Oil companies seem to be doing well...

[Wild]

Smitty with market volatility right now just place the bonds into a short term GIC. Do not invest in stocks, do not invest in gold because a good rally has happened already. Mutual funds are an uncertainty right now and due to the huge accumulating USA debt with no secure backing for their bond issues I believe that they will have to increase the interest rate to secure further money as the credit rating continues to degrade.

 

Which means that interest rates will begin to rise long term so don't lock in right now.

[Dutch]

Hey Smitty,

 

Right now alot people are scared to invest because everything is crashing... but you must look at it almost like everything is going on sale... buy now when things are cheap!

 

Talk to an advisor or an investor.

 

Depending on what you want from that money, or what your age is... I would put it in a mutual fund that is global, not american lol. Find a company that has been winning all the awards and has good performance. Also look for companies with fund managers, people depend on the funds doing well or they dont make money. They average around 12%

 

Maybe put a down on some property in a few months when the housing market drops here in Canada... remember, buy it when its on sale because certain things AWALYS go up. eg. property.... they dont make that stuff anymore..

 

Pm me on maybe some more advice or places/people I can direct you too.

 

Oh... and DONT put it in a GIC... inflation is almost higher than those rates!

 

Pachone

 

Ahhhh...don't go with Primerica....enough said. Point me to any managed fund that has made 12% over the last year, please.....

 

Fund managers don't make more for the investor. Only something like 12% of managers beat the market. A good "couch potato" investing strategy will beat them most times. Don't pay high MER's on mutual funds, they just aren't worth it.

 

Look into some low-cost ETF's through TD e-funds. If you can't stand the volitility right now, go with a GIC or something like that, but not for 3 years. Shop around for the best rates. There is some "good" information at redflagdeals.com on "high" interest savings accounts.

 

Real Estate is a risky market - I would only attempt it if you know the business really, really well.

 

If you have any other debt - CC etc. consider paying that off. Instant return = 20% or so.

 

If you have kids, consider an RESP - Gov't will kick in 20% up to a max. of $400/year - that's like earning another 20%.

 

You need to seek advice from a "fee only" financial advisor. Why "fee only" they won't push mutual funds on you as they aren't earning a commission on them.

[TennesseeGuy]

Smitty, the main thing you have going for you is youth. There's plenty of time. Park it in a safe place that makes you some money and educate yourself on investing. Try to save another $10,000 or more a year while you're learning. Go with no load funds with little expense fees.

 

Learn the magic in rule of 72.

 

Start out investing a little bit at a time over a year or two. You can do it from your own computer.

 

Lots of funds are going at sale prices right now, but who knows where the bottom is?

 

Good luck with your venture.

[camillj]

Smitty with market volatility right now just place the bonds into a short term GIC. Do not invest in stocks, do not invest in gold because a good rally has happened already. Mutual funds are an uncertainty right now and due to the huge accumulating USA debt with no secure backing for their bond issues I believe that they will have to increase the interest rate to secure further money as the credit rating continues to degrade.

 

Which means that interest rates will begin to rise long term so don't lock in right now.

 

 

Well gold was up almost 10% today ...markets rebounded almost 5% .... but truth is .. there is no safe haven ...CDN$ vs US $... even GIC's could be completely toasted if the bank goes down and you are over your CDIC limit ... but it in the bigger scheme of things it really depends on your goal .... excitement or safety ... right now to be frank the matress is looking pretty good to a lot of folks... me .... I still like tulip bulbs

[ricoboxing]

Ahhhh...don't go with Primerica....enough said. Point me to any managed fund that has made 12% over the last year, please.....

 

lol, 12 % is the standard # i always hear from them!

 

in the long run, index funds will beat out 80% of managed funds.

 

if youre only in for the short run, then GIC or high % savings is the place to go

[BillM]

Right now? Grab 10K and buy some NYSE:MS(Morgan Stanley) stock. I've dropped in 10K as of this morning, and the stock has gone up $13 per share by market close..

 

Look at the previous year, there is no way MS is going to tank like some of the financials have... They had increased 3rd quarter earnings... Once John Mack held his webcast, and replied to all the nay sayers, the stock went up and up and up

 

Hold it until Jan of next year and see where you are.. I am willing to bet you'll see a HUGE return...

[canadianboy]

easy! one see a financil advisor if it was my money it would be going into the ING 4% intrest savings and then just continue to look for signs of a market upturn and invest some not all in Market Rated GIC's safe and the potential to earn alot of money

Edited September 18, 2008 by canadianboy

[drwxr]

invest in gold and silver.

Adjusted for inflation, gold and silver are currently trading at relatively low prices—especially if you take money supply into account. Given the current U.S. credit crisis, a recession could be imminent. If a recession occurs, gold and silver investments stand to benefit because the loss of faith in the dollar will likely cause many investors to seek out gold, silver and other commodities that retain value in relation to other currencies.

 

Silver has the advantage of being used in many new technologies, and there is a bigger shortage of silver when current and future forecasting of supply and demand are taken into consideration. Worldwide demand for silver has exceeded annual production every year since 1990, and "new high-tech uses for silver will further strain already-tight supplies in the future," according to Monex.com.

[Casey123]

See Beans recent Thread on Retirement Planning, Very solid advice.

[Radnine]

I would put it in an ING account until February, then buy a new baot at the boat show.

[Tarzan's Jane]

Scotia Bank also offers a 4% interest account...Money Master Account.

[mattmacewan]

Having worked in finance for a few years - the market is JUNK right now. Hold for now or consider a high interest savings acct. Any bank will give you ~4% monthly to match the ING/Presidents Choice type things on that kind of scratch.

 

Real Estate is never bad but bought today will be worse less tomorrow the way things are going.

 

If my house were paid off I'd be looking at a boat. This is the season to get a deal and the market is down overall.

 

Either way you cant take it with you....so be smart but not too smart.

[ricoboxing]

I would put it in an ING account until February, then buy a new baot at the boat show.

 

THIS IS BY FAR THE BEST ADVICE!

[OhioFisherman]

Take it from someone forced by illness to stop working before I wanted to. Keep it in a safe investment as a rainy day fund unless you can handle some risk. World economy seems to be in turmoil wait a year and see if things calm down. Better a 3 or 4 percent return right now than a loss.

[fishinggeek]

Looks of interesting perspectives. I like the low cost of ETF's as well, and other companies besides TD has some really cheap ones, like Vanguard or Barclay's. Unless you have the education, sophisticated tools, and scale (and I'm talking about many millions or billions of assets), personally I wouldn't try and beat the market with picking and choosing investments like stocks, mutual funds, or even real estate. These markets are usually zero sum games, and to make money, your counterparty has to lose money. And when you consider the counterparties are often large institutional investors like hedge funds that have expertise, I'd be afraid to ante up. That's just my personal opinion though.

 

But I agree with Cliff. Read all the posts here, and take everything with a grain of salt. Find an advisor you trust and take their advice with a grain of salt too. Keep in mind how they are compensated. Some charge a flat fee, which may be high, but then there's no incentive for them to steer you in the wrong direction to increase their profits, like over-churning the portfolio, choosing investments with higher trailers for them, etc. Some might charge no fee, but keep pressuring you to buy expensive products like wrap funds, or pressure you to churn your portolio with short-term fixed incomes, or the latest stock tip. Everyone's an expert and your friend when you have money, so just be careful.

[bigugli]

Take it from someone forced by illness to stop working before I wanted to. Keep it in a safe investment as a rainy day fund unless you can handle some risk. World economy seems to be in turmoil wait a year and see if things calm down. Better a 3 or 4 percent return right now than a loss.

Here is some real sense. If you already have a decent salary, try and keep it as a nest egg for now. Life can and does throw some wicked curve balls. Illness and disability bring about radical lifestyle changes and that nest egg can suddenly be a big blessing.

[Smitty1]

Thanks for all the input guys - I am going to see an advisor today.

 

Smitty

[ch312]

ive heard financial advisors do nothing but keep using up your money until nothing is left....

 

a few years ago when gold was less than $500/oz my aunt told me to buy $25k worth of gold or roughly 50ozs. if i would have done that and cashed out today at $866/oz i would have made a profit of over $18k, or a new boat. i sure am kickin myself for not listening :wallbash: