All eggs in one basket - General investment advice

[Carrera911]

Hey guys,

So usually I don't like talking about my finances but the way things are going at the moment I have a large sum of money to invest and I'm looking for ideas.
The budget is around the low 7 figures and I'm looking for low risk investments.

I am thinking of buying a house which I will live in for the next couple of years and afterwards expect it to make me about 10% annual ROI.
I've also thought about buying mutual funds with most of the money, hopefully to create a portfolio that can make me 10% annual ROI as well. I've seen these: http://www.marketwatch.com/lazyportfolio and thought they might work.

I know that with my budget many would recommend a wealth management service but I just don't trust these. I prefer a hands-on approach for my investments.

I'd be happy to hear about more ideas I can maintain my wealth.

PS: I hope I didn't portray myself as a douche, I have a bit of a language barrier me being a non american.

[Etschell]

where are you planning on buying a house?

your portfolio could have a mix of a lot of assets. steer clear of private equity.

[Carrera911]

I plan to purchase the house near my current work place which will be my work place for the next couple of years (in FL).

[Etschell]

depends on where in florida. south florida most areas yes. other parts of florida hell no (if you are banking on 10% annual appreciation - still big gluts).

honest opinion buy on the intercoastal waterway it always goes up.

[Carrera911]

The property value is about 10% of the total portfolio so I wouldn't give it too much attention. I'm thinking about what to do with the rest of the money.

Mutual index following funds no bueno ?

[Etschell]

mutual funds are fine just dont put it all in at the same time. stagger it.

[Carrera911]

While I keep it in the bank it's not making any returns.

Originally Posted by Etschell

mutual funds are fine just dont put it all in at the same time. stagger it.

[Etschell]

Originally Posted by Carrera911

While I keep it in the bank it's not making any returns.

uh i make 2%. not sure where you bank. and it makes zero sense to plunk all your money into the stock market at 1 time. even less so when the market is at an all time high.

[.brian.]

Originally Posted by Etschell

uh i make 2%. not sure where you bank.

What bank (or credit union) is this?

[Tony64]

Originally Posted by .brian.

What bank (or credit union) is this?

Yes, if there's a bank currently that's paying 2% I'd like that info as well.

[HorologyK]

Real estate is not a great investment. You'd better hold it for at least 7-10 years for any sizable return and even that is no guarantee.


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[Heff]

Index funds are fine. You'll never outperform the market, but you'll never underperform either.


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[_speedmaster_]

If you want low risk, diversify/hedge with low cost ETFs. You can get exposure to the S&P500 (growth and/or blue chips), EM, EAFE, etc.

Also, studies have shown that passive management does very well when stacked against actively managed portfolios.

I'm not much into real estate, but I agree with the previous poster that, unless its the Miami area, I don't think Florida real-estate is a wise choice.

[FSUGeoff]

Originally Posted by _speedmaster_

If you want low risk, diversify/hedge with low cost ETFs. You can get exposure to the S&P500 (growth and/or blue chips), EM, EAFE, etc.

Also, studies have shown that passive management does very well when stacked against actively managed portfolios.

I'm not much into real estate, but I agree with the previous poster that, unless its the Miami area, I don't think Florida real-estate is a wise choice.

I live in Miami area and worked for the banking institutions, cleaning up the last residential bubble. This is literally horrible advice, condo projects are shutting down left and right because they can't pre-sell... and the skyline is full of cranes...its all foreign money and nobody lives in the units...something has to give soon

Ft. Lauderdale is a safer market and way less per/sqft

[Etschell]

Originally Posted by FSUGeoff

I live in Miami area and worked for the banking institutions, cleaning up the last residential bubble. This is literally horrible advice, condo projects are shutting down left and right because they can't pre-sell... and the skyline is full of cranes...its all foreign money and nobody lives in the units...something has to give soon

Ft. Lauderdale is a safer market and way less per/sqft

sawgrass is nutty. the metropica part. they want 600k plus but the chinese are buying.

[_speedmaster_]

Originally Posted by Etschell

sawgrass is nutty. the metropica part. they want 600k plus but the chinese are buying.

Ha. This is why I stay out of real estate.

[KDS777]

My two cents........perhaps not a popular view, but it worked for me.

Stay away from "anything" to do with the stock market. It is an outright fraud and a scam. Hasn't been straight up for 30 years IMHO. If you have the "stones" and the resources to sit at the table in the Grand Casino in Monaco and play against the bank for $100K a hand fill your boots, but otherwise........

Real estate is a below average place to park money at present, but honestly, it too has been bastardized by extensive government intervention, jurisdictions turning a blind eye to foreign money laundering, and therefore the market is distorted in many areas. Tread carefully and you'll be fine. I doubt any significant value appreciation will occur however. You might get lucky, but that ship left port years ago. You do need a place to live though......so compare renting versus buying, look at your personal circumstances, timelines, etc, and act accordingly. I own properties, but nothing is for sale as I live in them and plan to until I expire. One has had a 500% capital appreciation, the other is flat lining......so what......I don't care.

I trade forex and buy/hold government high yield bonds to maturity. Why do you do all of the aforementioned things ? To make more cash, right ? Why not bypass all the riff raff who are rigging the tables, and holding their hands out for a piece of your pie and trade cash to make cash, or buy a cash yield with cash. Selling both is just a mouse click. Governments are always the last thing to fail, but often the first to send out signals that all is not well. The rest are a mixed bag.

I averaged an 11% return over the last 10 years on bonds alone. The forex trading was just a kiss, and something to keep me occupied mentally as I have properties and assets in two continents. It is a good way to learn how to understand and manage international risk.

We have these discussions on Ferrarichat.com all the time in the private forums section so you are not coming across as a douche, nor is this a banned topic here per say. Asking how much money one has, or how much you make is though.

[_speedmaster_]

Originally Posted by KDS777

My two cents........perhaps not a popular view, but it worked for me.

Stay away from "anything" to do with the stock market. It is an outright fraud and a scam. Hasn't been straight up for 30 years IMHO. If you have the "stones" and the resources to sit at the table in the Grand Casino in Monaco and play against the bank for $100K a hand fill your boots, but otherwise........

Real estate is a below average place to park money at present, but honestly, it too has been bastardized by extensive government intervention, and the market is distorted in many areas. Tread carefully and you'll be fine. I doubt any significant value appreciation will occur however. That ship left port years ago.

I trade forex and buy/hold government high yield bonds to maturity. Why do you do all of the aforementioned things ? To make more cash, right ? Why not bypass all the riff raff who are rigging the tables, anad holding their hands out for a piece of your pie and trade cash to make cash. or buy cash with cash. Governments are always the last thing to fail, but often the first to send out signals that all is not well.

I averaged an 11% return over the last 10 years.

Forex is a very dangerous game to be playing. Especially if you don't know what you are doing. Not saying you don't, but I don't think the OP does.
Also, 11% return over the last 10 years isn't great. If you put money into even a S&P 500 value ETF you would have made well over 25%. For instance, my S&P 500 CORE gained 72% since my purchase around 2008. Mind you, this is core. This isn't even volatile.

[KDS777]

Originally Posted by speedmaster

Forex is a very dangerous game to be playing. Especially if you don't know what you are doing. Not saying you don't, but I don't think the OP does. Also, 11% return over the last 10 years isn't great. If you put money into even a S&P 500 value ETF you would have made well over 25%. For instance, my S&P 500 CORE gained 72% since my purchase around 2008. Mind you, this is core. This isn't even volatile.

I'm not trying to be great. Just good, which is 1-2 notches below.

What would have been the return if measured from 2007 before the crash ?

Originally Posted by speedmaster

Also, studies have shown that passive management does very well when stacked against actively managed portfolios.

Very, very, true.

[Etschell]

Originally Posted by KDS777

I'm not trying to be great. Just good, which is 1-2 notches below.

What would have been the ETF return if measured from 2007 before the crash ?

5% roughly on spy.

no one and i mean no one jammed the indices at their march 09 lows with all their money.

[_speedmaster_]

Originally Posted by KDS777

I'm not trying to be great. Just good, which is 1-2 notches below.

What would have been the return if measured from 2007 before the crash ?



Very, very, true.

As an example : IVV (S&P 500 Core)
Px (height pre-crash) = ~$155 on Oct 1, 2007
Px (now) = ~240
That's a return of almost 55%

Domestic markets have rebounded to the nth degree since pre-crash levels.
This makes them expensive, so hedging is key (like it always is).

I'm not trying to put anyone down, and apologies if I'm coming off rude or arrogant. I'm just trying to preach about investing diversely.

[FSUGeoff]

Originally Posted by _speedmaster_

As an example : IVV (S&P 500 Core)
Px (height pre-crash) = ~$155 on Oct 1, 2007
Px (now) = ~240
That's a return of almost 55%

Domestic markets have rebounded to the nth degree since pre-crash levels.
This makes them expensive, so hedging is key (like it always is).

I'm not trying to put anyone down, and apologies if I'm coming off rude or arrogant. I'm just trying to preach about investing diversely.

always solid advice, you have to hedge, but still take some mild risks if you want to beat the index. invest in great companies you love...the warren buffett way

[jhilly8982]

Take a look at https://www.bogleheads.org/

Join, ask questions. You can use specifics for amounts, what you currently have etc.

This is a forum dedicated to a hands on investment approach.

I agree with a few other posters, low fee index ETF's should prove to be great long term placement. Allocate what you are comfortable with, ie 33% US stocks, 33% In't stocks, 33% total bond fund or you can tilt stocks for not just large cap, but value or growth. Re-balancing your portfolio a couple times a year isn't rocket science either.

Either way, kudos to you for wanting to get involved. I wish more people took an active role in their financial future.

[corn18]

Originally Posted by jhilly8982

Take a look at https://www.bogleheads.org/

Join, ask questions. You can use specifics for amounts, what you currently have etc.

This is a forum dedicated to a hands on investment approach.

I agree with a few other posters, low fee index ETF's should prove to be great long term placement. Allocate what you are comfortable with, ie 33% US stocks, 33% In't stocks, 33% total bond fund or you can tilt stocks for not just large cap, but value or growth. Re-balancing your portfolio a couple times a year isn't rocket science either.

Either way, kudos to you for wanting to get involved. I wish more people took an active role in their financial future.

In case this got lost in the noise, please visit this site. If you don't know, it is based on John Bogle's approach to low cost investing. He is the founder of Vanguard and has over $4T AUM. It's more than just passive, low cost investing. It also involves picking an asset allocation that suits your risk tolerance and rebalancing when the markets move. Very easy to execute and as high or low risk as you choose.

You'll get all kinds of single data points that do well with most any approach. But this one suits me because I suck at picking stocks. If you want to know whether to buy a stock, find out if I own it and then short it. You will be rich. Now I own all of them, so I am hoping to be dead nuts average.

[KDS777]

The "one" building in Miami I would buy into (and I can't afford it) and it's truly the only one......is the "Porsche Design" tower.

Having said that, I would never put all my eggs in one basket, let alone a RE one.

[FSUGeoff]

Originally Posted by KDS777

The "one" building in Miami I would buy into (and I can't afford it) and it's truly the only one......is the "Porsche Design" tower.

Having said that, I would never put all my eggs in one basket, let alone a RE one.

The car elevator is sick....penthouse broke records when it sold.

[rr-nyc]

I wouldn't buy in Miami right now. And expect 10% a year. There's just too much inventory and prices are flat.

[FSUGeoff]

Originally Posted by rr-nyc

I wouldn't buy in Miami right now. And expect 10% a year. There's just too much inventory and prices are flat.

This is why condos are converting to rental projects, miami bubble is gonna pop. luckily the whole world won't be holding the bag this time, just foreign investors and real estate developers. That metrotopia thing is redic, but the new parking garage in sawgrass mall is nice. I have a townhouse in Flagler village, i smile everytime a new development is planned. I'd like to tell you i was a genius, but i got lucky, i just wanted something as close to the city center as i could a couple years ago, now its the hottest neighborhood in the county.

[roaddog359]

Are you better off investing money now while the market is high, or wait who knows how long until we have another market crash or correction? Thats my question!

[FSUGeoff]

Originally Posted by roaddog359

Are you better off investing money now while the market is high, or wait who knows how long until we have another market crash or correction? Thats my question!

nobody ever made money buying high.....that said if your in it for the long game (which you should be) timing matter less