What investments would you choose?

Question

If u had a portfolio worth one million dollars, how would you manage the portfolio to make sure you continue to be a millionaire, regardless of what happens in the financial markets?

Answer 1

Wow......it's real easy to answer this question.

Fixed Index Annuities for 75% of your money! Only put 25% of your money directly at risk in the stock market. When and if the 25% grows to 50% of the total, take profits on 25% pay taxes and move the remainder into Fixed Index Annuities. Repeat the process over and over. (Before you do this you should have a 100% liquid cash reserve (mony market account) for emergencies or for major purchases you expect to make in the next 5 year).

Do Not Use Variable Annuities: Total fees in Variable Annuities are 2.00% to 3.50%. Plus all the Investment Risk is Yours and Not the Insurance Company.

Safe Money Places with Tax Advantages for non-qualified money.

Safe Money Places for Qualified Dollars: IRA's, Pension Plan Rollovers, etc.

Only place where you can make Dollars and NOT Lose Dollars trying!

ONLY Annuities are The Best SAFE MONEY places! The three best are the following:

1. Fixed Index Annuities ------Where your account does NOT Decline in Value. -----Where the Interest you earn along the way does NOT Decline in Value. -------Where the interest you earn each year is based ONLY on the Upside of a Stock Index (You would accept a limit on the Upside of say 50% participation in exchange for not having your account decline in value at any point in time, wouldn't you???? I know I would!!!!). Example: S&P 500 Index goes up 30% you Earn Interest at 15% that year. S&P 500 Index goes down 30% you Earn interest at 0% that year and your new index Start Point RESETS at the S&P 500 depressed level. Multiple Indexes and other interest crediting methods are also available. Various Time Periods are Available from 4 Years to 14 Years (The longer you allow this to compound and grow, the higher the Rate of Annualized Return, this is true for any instrument only here you have No Risk of Loss.). To Learn more Visit: http://www.jdsannuities.com/index_annuities


2. Fixed Rate Deferred Annuities - Where you have a wide selections of multi-year guaranteed rates or for 2 years, 3 years or 5 years, most are 5 to 10 year products. To Learn more and see most of the rates for yourself visit: http://www.jdsannuities.com/annuity_rates


3. Immediate Annuities / Income Annuities - For Guaranteed Monthly Income for Life, Joint Life or for a Period of Time: Go here to learn more - http://www.jdsannuities.com/immediate_annuities


Joe The Expert

Answer 2

You don't specify a time frame.
If the time to invest is very short I would look at cd's, money market accounts, treasury bills and such.You would always have the million but over time inflation would render it worth less than a million in buying power.
Puting your investments in bonds that cover a longer term bring you at risk when interest rates rise. Putting money into stock puts you at risk when the markets fall. Foryunately these market move inverse to each other.
Given that I would look to invest a percentage in the stock market and part in fixed income.
Diversify each part of the portfolio so that you spread the risk amoung many localities and industries so that no one investment would hurt your overall portfolio. In this way you can have the rate of return on your investment stay even with or ahead of inflation and have the million of buying power over time.
Good Luck!

Answer 3

Government bonds would keep your money nominally safe, but after tax you will be making less than inflation, so you will be moving backwards slowly but surely.

So, while you have a goal, and it is easily achievable, I would like to suggest that you need a more ambitious goal, so that your money increases in value after you have taken inflation into account. You also don't mention how much the investment should provide in living expenses - it is one thing to keep an investment at USD 1M, it is another to do that while also using the investment to cover living expenses.

Answer 4

I would go to a professional investment broker and get his opinion on how to invest the money and why. I would then go to another investment broker and ask him the same question.
I would then decide which one sounded the most reasonable and invest with him.

Answer 5

government bonds

Answer 6

Hi,

First of all, stay away from "professional brokers".

Remember this, they are just sales people trying to sell you what their firm is pushing. They are not security analysts or financial planners, not even financial advisers. Trust me, I know from experience that they cannot be trusted especially with a million dollars. You risk losing it all. A million dollar account is known as a "whale" and they would love to get their greedy little paws on it and suck it dry. They just want to make commissions on what they buy and sell for the suckers, err...clients..

Risk avoidance is the name of the game.

Remember, the harder I work, the luckier I get.

Penny stocks are great and speculative, but I would avoid the ones under a dollar a share. For example, Best Buy started at less than $5. So there are some good companies, but it takes a lot of digging to find the good ones. You are looking for companies with good earnings, little debt, low capitalization, and good P/Es. For stocks under $5, very few will meet these requirements.

Stay away from the pharms unless they have patented drugs - do not invest in generic pharms, no growth there.

Check out which business sectors are the most popular and invest in the companies in those sectors. The number one, two and three are: technology, health care, and cyclicals (retail). These change every few months.

Watch CNBC, but don't pay too much attention to the talking heads, except for Jim Cramer, the wild man - but he tries to teach you how to invest and has some great advice.

Get Jim Cramer's Real Money: Sane Investing in an Insane World by James J. Cramer

Listen to Jim Cramer on CNBC.com

Go to Clearstation for quotes and tutorials on investing at (http://clearstation.etrade.com/). Sign up is free.

Get this book: Value Investing: From Graham to Buffett and Beyond (Wiley Finance) by Bruce C. N. Greenwald, Judd Kahn, Paul D. Sonkin, and Michael van Biema.

Another good book: The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of (Motley Fool) by David Gardner, Tom Gardner, and Selena Maranjian

Jim Cramer's Mad Money: Watch TV, Get Rich by James J. Cramer and Cliff Mason

I Want to Make Money in the Stock Market: Learn to Begin Investing Without Losing Your Life Savings! by Chris M. Hart\

Sensible Stock Investing: How to Pick, Value, and Manage Stocks by David P. Van Knapp

Stock Investing For Dummies (For Dummies (Business & Personal Finance)) by Paul Mladjenovic

All About Stock Market Strategies : The Easy Way To Get Started by David Brown and Kassandra Bentley

The Motley Fool Investment Guide and their Web site (http://www.fool.com/).

The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks by Dan Holtzclaw

How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition by William J. O'Neil

Trading for a Living: Psychology, Trading Tactics, Money Management by Alexander Elder

Big Trends in Trading: Strategies to Master Major Market Moves (A Marketplace Book) by Price Headley

Extraordinary Popular Delusions & the Madness of Crowds (Paperback)
by Charles Mackay (Author), Andrew Tobias (Foreword) This book talks about the Tulip craze in Holland where people would mortgage their homes to buy Tulip bulbs. Same thing happened in 2001 - 2002 with the Internet bubble that brought the stock market to its knees. The dot com companies were the Tulip bulbs.

Buy Investors Business Daily. It has lots of tutorials and I like it better than the stodgy Wall St Journal.

Money Game by Adam Smith

Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics) (Hardcover)
by Philip A. Fisher. Recommended by Warren Buffet who took $100,000 and grew it to $34 billion!

Value Investing with the Masters by Kirk Kazanjian

Valuegrowth Investing by Glen Arnold

The 5 Keys to Value Investing by J. Dennis Jean-Jacques

The Intelligent Investor Rev Ed. (Collins Business Essentials) by Benjamin Graham. Warren Buffet was his student at Columbia.

The Money Masters by John Train

The Bogleheads' Guide to Investing by Taylor Larimore

Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor by John C. Bogle

Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics by Gary Belsky

Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week! by Phil Town . See his Web site at (http://www.ruleoneinvestor.com/). Free sign-up. I got the book at the library.

Listen. You don't have to spend a lot of money on these books - most can be found at your library and those that your library doesn't have they can usually get from other libraries in your state.

Most of these books talk about stock and mutual fund investing, but for a good introduction to other forms of investing Gerald Appel has a great book called Opportunity Investing - How to Profit When Stock Advance, Stocks decline, Inflation Run Rampant, Prices fall, Oil Prices Hit the Roof and Every Time In Between.

First, Break All the Rules: What the World's Greatest Managers Do Differently by Marcus Buckingham and Curt Coffman Not a book on investing, but it's a nice segue into the next book.

Now, Discover Your Strengths by Marcus Buckingham and Donald O. Clifton

Go Put Your Strengths to Work: 6 Powerful Steps to Achieve Outstanding Performance by Marcus Buckingham

Finding your strengths is important when investing. These books teach you to build on your strengths, what you a good at. Everyone is good or passionate about something. Why not get better at what you are good at?

Another good book is: Opportunity Investing: How To Profit When Stocks Advance, Stocks Decline, Inflation Runs Rampant, Prices Fall, Oil Prices Hit the Roof, ... and Every Time in Between (Hardcover)
by Gerald Appel

Most mutual funds do not even keep up the the return on the S&P. That's like 99% of them.

Vanguard Index funds are a no brainer.

A CD is better than a savings account. They range from six months to several years. You cannot touch your money tho until the time limit is up.

Check out this Web site on Direct Investment Plans where you can buy shares directly from companies: (http://www.fool.com/School/DRIPs.htm). Usually no fees and you can buy one share at a time.

Bonds are probably the safest. You might try a bond fund. They might return 5 or 6 percent. At 5% a million would return $50,000 a year - not a bad income. Remember, you have to pay taxes on the $50,000.

There are also municipal bonds and the income from them is taxfree especially if you buy them in a state that offers them, but they only pay about 3%, but it's mostly taxfree.

Kindest Personal Regards,

Walt Brown
Site Build It Certified Webmaster
[e-mail]

P.S. This is a life-long learning process. Reading these books and applying the rules to analyzing stocks that may be good It takes time. Be patient and keep reading and listening.

P.P.S. Internet has lots of good stuff, for example (http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_average_conve
Stockcharts.com is very good and their discussion of MACD is one of the best, barring its originator, Gerald Apple, but now we are getting into Technical Analysis and that is not for beginners.