Advice on Investing $400,000 Dollars

[KingOfJericho]

I doubled my money in FAS in 08 but again - that fast money party is pretty much done.

[Feyd]

Originally Posted by persian54

Why not look into commodities?

Fuck yeah.

[Augenbrauezug]

Originally Posted by bmwmthree

OP doesn't really have 400k, he's an e-baller playing a stock market game. Plus, someone who has 400k and earns it isn't going to be asking the OT section of a BMW forum for advice.

This thread is very weird to me. Like how do you save up $400k and not know to talk to a financial adviser over posting the question on an internet car forum, unless of course it was inherited. Seems even then family and friends would be screaming to see a FA. Also seems weird to post the exact amount, people I know with hefty amounts of money don't usually talk about the figures except with their banks. Seems very weird to me, but who am I to judge. Congrats.

[Freakazoid]

Originally Posted by Augenbrauezug

This thread is very weird to me. Like how do you save up $400k and not know to talk to a financial adviser over posting the question on an internet car forum, unless of course it was inherited. Seems even then family and friends would be screaming to see a FA. Also seems weird to post the exact amount, people I know with hefty amounts of money don't usually talk about the figures except with their banks. Seems very weird to me, but who am I to judge. Congrats.

[gonzo]

Originally Posted by bmwmthree

OP doesn't really have 400k, he's an e-baller playing a stock market game. Plus, someone who has 400k and earns it isn't going to be asking the OT section of a BMW forum for advice.

Just play along. Look at the manure in this section. Plenty of room for more.

[Vanity]

Lol...

I'm in University. I have not a friggin clue about this stock market world. The money is not the exact amount, but a ball-park of what I'm willing to invest with.

And yes, it was inherited.

Where can I find a good financial advisor? My thoughts are if I go to the bank, they'll tell me to invest in THEIR products.

[slapmyfro]

all canadian funds

sprott gold and precious metals
front street special opportunities B
rbc precious metals

wake up in 20 years ans laugh at everyone else

[Artmasterx]

Originally Posted by Vanity

Hrmm, I'm not too sure. I mean, I've been looking at some of the top-ranked mutual funds in both Canada/US (really hesitant about investing in China) and some of the high-risk ones have anywhere from 50% - 110% return in 3 months. Not saying that's where I'd feel safe putting my money, but there's also the more conservative mutual funds that net in around 10% - 25% annually.

Anything that returned 50-100% in 3 months must be crazy risky and have very little diversification. A 1-5yr time horizon to too broad and a 1yr strategy would be very different than a 5yr. There is a lot of uncertainty in the world/markets today and stocks are trading at a relatively high PE compared to the historical norm.

Originally Posted by KingOfJericho

You can find some really great high yield bond funds that make 8% on coupon income alone.

True, but you have be wary of bond right now with a medium term time horizon because of the risk of inflation. If interest rates rise then it will take down bond prices, so even though you may be making 8%/yr, when you sell out in 1-5yrs you could be looking at a loss in principle due to decreased bond prices. I just read that PIMCO dumped all of its US Treasury bonds because they didn't like the inflation risk.


Bottom line, there is no low-risk way of making 100% return in even 5 years in the normal market. You could probably invest to get a 50% return in 5 years with a low-risk of losing the principle, but there is still a high probability that you wouldn't hit the 50% target.

With the low interest rates and the equity run-up over the past two years, there are not many good investment options right now for low risk returns over a 1-5yr time frame. I am sure there are some good options, especially with that kind of money, but you would certainly need to talk to a good professional about your options.

[gonzo]

Read and click on my other post then.

[bmwmthree]

Well then, you should have said you inherited the money in the OP if you want to be taken seriously. Still pretty weird to inherit that much unless it's from your parents (but I would guess not since you're still in university)?

[greycrx87]

build a portfolio of high dividend stocks ( combinations of mortgage REITS, energy companies, etc ) and collect dividends every 3 months...mine have been averaging around 11% for the past 2 years plus capital gains...

[Vanity]

Originally Posted by gonzo

Read and click on my other post then.

Yeap, I checked out Deutsche Bank link that you posted.

If I gave them a call would they know relevant information in NA or just Europe?

Clueless about this, as I've said above, but how does this FA exactly work? How much would I be paying them...?

Where are other places to get really good FAs?

[Augenbrauezug]

Originally Posted by Vanity

Lol...

I'm in University. I have not a friggin clue about this stock market world. The money is not the exact amount, but a ball-park of what I'm willing to invest with.

And yes, it was inherited.

Where can I find a good financial advisor? My thoughts are if I go to the bank, they'll tell me to invest in THEIR products.

Makes much more sense.

Do some research into finding an FA, or ask your family for help. If you inherited so much money someone in your family is good with money, or died after winning the lottery. Seems to me someone would know what to do with it.

[Vanity]

Originally Posted by greycrx87

build a portfolio of high dividend stocks ( combinations of mortgage REITS, energy companies, etc ) and collect dividends every 3 months...mine have been averaging around 11% for the past 2 years plus capital gains...

11% every 3 months?????

How risky is your investment?

And as you guys have mentioned, a 1 or 5 year investment strategy is pretty different. My end plan is to make enough money, however way, so that in about 5 years I'll be in a much more financially liberated position -- instead of leaving the 400k in the bank and watching it collect dust. I'm hoping for a double return, but if it means getting into risky situations (where I'm at an age/position in which I would be going into that market blind-folded) then it's obviously out of the window.

What is the likelihood of making 50% on 400k within 5 years? What's the risk like and is it measurable (like a percentage of what I'd potentially risk losing from my 400k?).

[Vanity]

Originally Posted by Augenbrauezug

Makes much more sense.

Do some research into finding an FA, or ask your family for help. If you inherited so much money someone in your family is good with money, or died after winning the lottery. Seems to me someone would know what to do with it.

Parents come from a Medical profession lineage (on one side) and building a company from scratch (on the other). No one has any sort of investment information because none of them have needed to/have invested in anything.

[greycrx87]

11% annually

I was lucky to catch a lot of these stocks when they bottomed in '09 ( one of them being LINE which I got at around 15-16 bucks and CIM at 3.55 )

[dogears]

Look at MLPs. Master Limited Partnerships. These are midstream energy companies that are involved in oil, gas, and coal transportation, storage, processing, etc. The Alerian index has made a 15%+ return since the mid 90s. They pay fat increasing distributions too.

The largest name in the sector is Enterprise Products Partners LP. EPD on the NYSE exchange. It has returned over 20% annually since 1999.

Best asset class over the long haul. You can corroborate with some googling. Great projections going forward as it is a domestic energy infrastructure play. No Arab oil involvement.

For you Canucks, Enbridge Energy has an MLP subsidiary. Enbridge is a Canadian company....

Feel free to PM me for more info.

Originally Posted by Vanity

1) Where would be the best place to get an all-around idea of what the investment market is like?

2) What is the best way to make the make the highest returns on $400k with a balance in risk? Obviously I don't want to be making 110% returns since the risk is most likely astronomical.

3) Looking at a 1-5 year period of investment. Hoping to at least double my money.

4) Mutual Funds are the common thing I hear about, what else do you guys think? Only reason why I'm posting on OT is because I know some of you here know what you're doing.

5) Any financial forums worth looking at?

[bolinp78]

Originally Posted by Vanity

(where I'm at an age/position in which I would be going into that market blind-folded) then it's obviously out of the window.

You'll be going in worse than blind-folded if you listen to most of the people on here tell you where to put your money, i can promise you that. Do some of your own research to learn about what is out there and then go get an advisor (and do not let them push you around and force anything on you).

I do not personally use an advisor, but I have concentrated my money in dividend yielding stocks, MLP's, a few bonds a while back, and mixed in some covered calls every so often. I look really good right about now because I bought a ton during the big downturn, knowing that at the (low) point I bought it at, if it went any lower it didn't matter because I wouldn't be in a position to be forced to sell any of it. So now I'm up 100+% on my total cost basis on a lot of positions, but that isn't normal. You can't expect and plan for something like that.

Dividend stocks are good, but you don't just buy them purely because the dividend looks sexy. You have to believe in the company as well. If you plan to keep the stock long term, the dividend will help you mitigate any unrealized losses, though.

[ghosthi32]

Originally Posted by bmwmthree

Well then, you should have said you inherited the money in the OP if you want to be taken seriously. Still pretty weird to inherit that much unless it's from your parents (but I would guess not since you're still in university)?

alright mr PI

[dogears]

Doubters will be doubters. LINE is one of the MLPs I mentioned.

AMAZING returns for over 15 years and low volatility. Beta is .35 for 10 years. 1/3 the SP downside.

Originally Posted by greycrx87

11% annually

I was lucky to catch a lot of these stocks when they bottomed in '09 ( one of them being LINE which I got at around 15-16 bucks and CIM at 3.55 )

[bolinp78]

Originally Posted by dogears

The largest name in the sector is Enterprise Products Partners LP. EPD on the NYSE exchange. It has returned over 20% annually since 1999.

I love me some EPD. I'm up like 130% on it I think, and I've owned it for almost two years I think. The distributions are pretty sweet.

edit: man, I love me some LINE, too. You're right up my alley. LINE is a great company with a lot of potential.

[BTM]

Or real estate