Paging any members in financial industry

[LoneRanger]

I recently came into sum of money reference an insurance settlement. I don't want to put it at risk but would like to get better than the std 1% that most money mkt accts seem to be paying, and on top of that I need a bank or financial institution with a five star stability rating. It currently sits in an immediate benefit account administered by the insurance company, earning 0.55%. Looking for some ideas. I will not go to any financial service co that works off commission or pushes their own agenda/products. I would rather pay an upfront fee to an independent who is beholden to no particular products to push.

 

[Donald]

Vanguard Index Mutual Fund based upon the S&P 500. Lowest fees anywhere (because its an index fund and has no real manager) and a good rate over the long term. Vanguard is huge and you do not need any middleman.

 

[Michael_P]

I have an NASD Series 7 and a finance degree but do not practice. I do however make my own finance decisions. Personally I keep it simple. If the market goes steadily up go long. If it goes down go short. However, the market is quivering, not either going up or down a bunch. This makes investing difficult. Many full service firms like Edward Jones will tell you to stay the course even when you are losing money. If you know you will have a sustained bear market, why invest in funds which go long. Mainly because these types of firms make most of their money doing this. The way this market is going, the best way to make money is to pay off any outstanding debt including your house. Many people say you will lose your tax write off, but to me I'd rather pay the IRS an extra $4000 a year in taxes than pay the bank an extra $15,000 a year in interest and possibly PMI. Not to mention the money you will save over the life of the loan. Oh.....Stay away from any thing mortgage backed such as some annuities or bonds. If the economy tanks mortgage defaults will rise. I see the market (over simplified) going down before it goes up because of all the debt out there that is not being paid by governments, business and individuals. Gold is gradually going down.
Due to the screwed up markets and not knowing your total financial situation, it is very difficult to recommend any plan. I like to keep my IRA's self directed. I invest ETF's and mutual funds quite a bit which are good if you do not feel confident buying stocks. During 08-09 when we had the bear market, I bought into bear market ETF's which netted me over 60% while most of the country was losing half of the retirement nest egg. You can do your own homework without subscribing to those expensive forecasting firms too. Due diligence and no debt can be the key to financial security.

 

[Billy_D]

Originally Posted By: Michael_P
...Due diligence and no debt can be the key to financial security.


+1

Don't pay more than 0.04% ($0.40 per $1000) in management fees. I usually invest in Index funds with management fees ranging from 0.01% to 0.04%.

 

[Michael_P]

So true. High fees can erase your annual yield.

 

[Rock_Hudstone]

Originally Posted By: LoneRanger
I recently came into sum of money reference an insurance settlement. I don't want to put it at risk but would like to get better than the std 1% that most money mkt accts seem to be paying, and on top of that I need a bank or financial institution with a five star stability rating.

I'd take advantage of the recent pullback in precious metal prices and put 10-20% percent into physical gold and silver bullion, i.e. American Eagles or Canadian Silver Maple Leafs. Put them in a safe deposit box or private vault and forgot about it, until a mania occurs.

If you have enough left over I'd be looking for a deal in residential rental real estate; income properties. Something in good condition in a nice area.

The stock market is a casino these days, about the only people making money are the insiders. Computer driven High Frequency trading and the recent Facebook IPO are good examples.

Also, keeping some cash on hand, even with the paltry intrest rates, is a good idea to take advantage of any deals or emergency that may come along

 

[friendly_jacek]

+1

 

[Drew99GT]

I could give some advice as a schmuck working for a CPA with an accounting degree, but no one listens to me...

Don't go LONG right now. OR better stated, stay defensive.

 

[Pablo]

I've never paid a dime for financial advice. And it shows. I'm up year over year better than most all the clowns and commission driven hucksters who come calling. Not saying there aren't some inside guys or talented market readers out there - because there probably are. But I don't know them and this is the interweb.

The first question is: How soon do you need the money?
What are your goals?

Pick a low cost company. Brokerage or mutual fund company. You see the names. I happen to use Fidelity for most of my stuff. Their funds as a whole suck in performance, but they have a few winners. But who cares? I can buy pretty much any fund or stock or other investment vehicle. They are stable and super easy to deal with.

I will shy away from any investment recommendations because I'm not a "member in financial industry"

If you post up your goals and timeline we can vomit up some recommendations - could be diversification, could be stay parked.

 

[Turk]

Well said, Pablo.

 

[frank2009]

I am not in the finance industry but have done OK with my investments. First off, pay any credit card debt you may have. You also may decide to pay off your mortgage if your apr is high, I'd say more than 4% or so. Also you may want to keep about 1-2 years net pay in a money market fund for emergencies. After that, read as much as you can and try to do it yourself. Its not that hard. Remember you will pay for advice if you need it. I like Vanguard index funds. Head to Bogleheads.org for probably the best advice around. Read their wikki. If doing it yourself is not for you, maybe someone here or a friend or family member can reccomend a fee only financial planner.

Don't rush to get your money invested. If you keep the money where it is for 6 months to a year while you learn, it would not be a bad thing.

 

[LoneRanger]

I have $28,000 sitting in a no fee (and no interest) checking acct for bill paying, with a local bank. $58,000 in a money market acct with a top five yield in the nation guarantee (that tag line may give away which bank it is) currently just under 1% I think. I have about $150,000 in a 457K at work.

The settlement was life insurance on my wife, if you remember back in March I posted about her passing. Both policies paid and it totals $375,000 between the two. That's earning about 0.55% now in money mkt type accounts administered by each insurer.

Owe $33,000 on a 10 yr note at 3.62% on the house after a re-fi in October 2011, we put a huge chunk down on it when bought back in 2006 for $177K (midwest farm belt real estate prices)

No card debt, no auto loans.

My retirement plan is a defined benefits pension plan administered by state public employee pension fund. For now. Defined benefit pensions are honeypots which keep getting raided or axed by whatever entity runs them lately. However, ours is solidly in the black for the foreseeable future I'm told.

I'm 49. Not sure of my timeline or goals, at this stage of still being in the grieving process, thinking about retiring is painful because she won't be there with me. I can draw a 27 yr pension at age 52, that would be about $37K/yr in today's dollars. My current salary is approx $65K/yr.

I'm mainly looking for a better yield for the insurance money but I'm quite risk averse.

 

[Rock_Hudstone]

Originally Posted By: LoneRanger
I have $28,000 sitting in a no fee (and no interest) checking acct for bill paying, with a local bank. $58,000 in a money market acct with a top five yield in the nation guarantee currently just under 1% I think.
Both policies paid and it totals $375,000 between the two. That's earning about 0.55% now in money mkt type accounts.

Owe $33,000 on a 10 yr note at 3.62% on the house after a re-fi in October 2011,

I'm mainly looking for a better yield for the insurance money but I'm quite risk averse.

Your money market is earning .55-1%, checking account is earning 0%. Pay off the $33,000 mortgage and you'll be ahead a net 2.6% on that $33,000. There is nothing like the feeling of owning property free and clear.

The bank owns the house until the last dollar is paid off, the mortgage burned, and you have the deed in your hot little hands.

As for being risk adverse I don't blame you. The name of the game these days is wealth preservation, so the last place you want to be is the stock market right now. There may be some stocks worth a gamble, but thats another subject.

On the other hand, holding lots of dollars is losing game as well. With intrest rates at 1% and inflation 6-8%, thats a 5-7% per year loss on your money right there.

Again, I'd allocate 10-20% of your total investable cash into physical gold and silver bullion.

The real estate bubble has already popped, so there is no big crash ahead, although prices could go down some more or bounce along the bottom, depending on the locale.

Nevertheless, I'd be looking for an income property/s with positive cash flow at a bargain price, which shouldn't be too hard to find in the midwest.

 

[Indydriver]

Don't be in a big hurry to invest it. Right now, cash is king. There is significant evidence mounting that we are entering a major deflationary spiral which is a very bad economic cycle our investment generation has never seen. Europe is crashing--just watch the markets go crazy next week--and 10,000 baby boomers are retiring daily in the US putting a long term hurt on consumer demand which is 70% of our economy. As those retirees and governments worldwide divert future resources toward paying down their debt bubbles, there will be even fewer resources available for consumption. This means that there will be another leg down in the housing market as more and more mortgages go into foreclosure which will take many businesses down with it. Things will get cheaper (that's deflation) which means your cash will appreciate in value, not depreciate from inflation.

I'd study up on various options and perhaps interview some financial planners to get some ideas. Then, maybe in 6-12 months slowly start putting small pieces of your nest egg to work. But be very careful right now.

 

[Rock_Hudstone]

Originally Posted By: Indydriver
Don't be in a big hurry to invest it. Right now, cash is king. There is significant evidence mounting that we are entering a major deflationary spiral . Things will get cheaper (that's deflation) which means your cash will appreciate in value, not depreciate from inflation.

If only it were true, unfortunatly we haven't seen real deflation since the great depression and I wouldn't hold my breath waiting for it. Deflation to central bankers is like the cross to Dracula.

If any signs of real deflation were to appear Central Banks worldwide would crank up the printing presses pronto. They much prefer inflation as it allows them to purchase govt debt with newly created money and pass the inflation onto the public.

Hence the need to hold some hard assets and not paper dollars.

Here is a good article on the subject and the BLS inflation calculator for the U.S. dollar.

http://lewrockwell.com/north/north1031.html

http://www.bls.gov/data/inflation_calculator.htm

 

[buster]

Originally Posted By: Pablo
I've never paid a dime for financial advice. And it shows. I'm up year over year better than most all the clowns and commission driven hucksters who come calling. Not saying there aren't some inside guys or talented market readers out there - because there probably are. But I don't know them and this is the interweb.

The first question is: How soon do you need the money?
What are your goals?

Pick a low cost company. Brokerage or mutual fund company. You see the names. I happen to use Fidelity for most of my stuff. Their funds as a whole suck in performance, but they have a few winners. But who cares? I can buy pretty much any fund or stock or other investment vehicle. They are stable and super easy to deal with.

I will shy away from any investment recommendations because I'm not a "member in financial industry"

If you post up your goals and timeline we can vomit up some recommendations - could be diversification, could be stay parked.


+1. So true. I worked in the industry. Most of the people don't know what they are talking about. LOL

 

[Turk]

Yea and I'm in process of getting out of a "place".

Can't wait.

 

[Drew99GT]

Most people I've found that work the retail/customer service/sales part of the financial industry, don't know diddly squat about finance or trading, for the most part. No offense intended to anyone who reads that!

As an accountant who works for a CPA who is also a registered representative, I see it day in and day out. Most of the guys who come in touting their products, funds, investment products etc. are there for one purpose: to get a sales commission (my boss included). I watch him regularly put clients in long term mutual funds with a "set it and forget it" mentality and they've all been taken to the cleaners. Mostly Fidelity and American Funds.

When clients end up losing 20% during the past several drops since 2009, come in screaming, he points to a chart he has up in the office of the dow over the last 100 years and it looks like a straight line. He uses that to calm them down.

Of course, for his wealthier clients who do more business, he puts them into a company that actively manages their portfolios!

I'm afraid that with all the high frequency trading computer systems that the "pros" (or criminals, depending on your view point) use on wall street, and with the market and economy in general, the days of being able to park your money and get a return in an index fund, bond fund, money market fund, or even most decent managed funds, are over.

 

[Mr Nice]

I opened a TD Waterhouse account a few years back with $60,000 and was always hounded by salesmen offering to 'help' me invest my money. I just hate when commissioned people try and offer [censored] just for a quick buck.

 

[hattaresguy]

If your risk adverse 5 year CD's or bonds.