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Exactly. So stick to what you know while reading and learning about other investment vehicles.
Everyone here has an opinion and suggestions. But in the end it's you and your money. Invest in something you don't fully understand and you could lose it all if you don't understand the nuances of that investment.
So one thing you could do:
Put the money in a 1 year CD. Use that 1 year to educate yourself in investments and their risks/rewards. When that CD comes due you will be in a much better position to make a decision.
Low risk and high return...........and tax free. On top of explaining it to you like you're 6.
Even if I knew, why would I share it with anyone?
$100,000 is not even enough to be a low end accredited investor. I think if anyone knew of an investment like that, they'd have more important things to do with their time than hang out on CD.
I guess you don't have better things to do either since you are here... gee I wonder why???
dont go by what happened with this fund in 2008 .. they loaded up on the fidelity central core fund thinking it was a conservative investment and it ended up contining toxic paper. it caused the fund to take a hit which was far and away from the risk level it was designed for and now runs at. for all purposes its a different fund than the 2008 version.
I still wouldn't trust it. Just my opinion. The Fidelity floating rate fund did better than most in its category that year and it still lost 16%.
I'm not saying it's a bad fund, but if you have a 3 year time frame, wouldn't do it (but maybe for a 5 year).
But if I was going to invest for 5 years, I'd have a preference for a broader based fund like Fidelity Strategic Income....or my favorit for the multisector category, Loomis Sayles Bond.
Maybe I should just go to USAA and talk to a financial planner and let them do the investing but the author does not recommend using this avenue.
We also have USAA and set up an appointment with their financial advisor. He wasn't particularly savvy and recommended basically USAA investments that didn't do well in the year following (as we expected), and would be catastrophic if/when the effects of QE outpace the banks restriction of credit and inflation accelerates (already starting to happen).
You'll do much better researching everything on boards like these and other internet resources, then deciding what will probably happen with the US economy and making your decisions from there. It's going to be tough for everyone: we're in uncharted territory here, as the US government and the Fed push us past the point of return, but with the mechanisms of the collapse very hard to predict.
If I were you, I'd buy and take possession of gold/silver (hide it well!) and ride out the next 3 to 5 years. Even if prices drop, you'll have saved the inflation and dollar devaluation that would have reduced your savings/investment by 20% or so every year. You simply won't get any investment returns in dollar-denominated assets that could match that, not without a 90% risk of losing it all.
I still wouldn't trust it. Just my opinion. The Fidelity floating rate fund did better than most in its category that year and it still lost 16%.
I'm not saying it's a bad fund, but if you have a 3 year time frame, wouldn't do it (but maybe for a 5 year).
But if I was going to invest for 5 years, I'd have a preference for a broader based fund like Fidelity Strategic Income....or my favorit for the multisector category, Loomis Sayles Bond.
by the same token i lost money in a money market that year too.. same story, the money market loaded up on lehman paper,something money markets will never do again .mine actually folded and is being dispersed by a court.
did you see fidelity ultra short bond fund for that year too? man did that get creamed as well. for the same reason. they loaded up on what was believed safe paper from central core.
for those who dont know how the big firms like fidelity operate ,they maintain a group of internal mutual funds for their mutual fund managers to buy from if they want to. they are mutual funds availablee to fund managers.
the fidelity central core funds as they are called allow fund managers to invest large chunks of money that comes in easily and quickly when they may not have any stocks they like.
they also held what amounted to a kicker fund for their fixed income funds to buy from. the fund held what it thought was a relatively safe mix of higher yielding paper, no where near junk status.
if a money market or conservative bond fund wanted to juice up its yield it could buy some of this internal fund and veer from whatever it they were supposed to be buying and get a little better return.
well that back fired when that supposed safe paper ended up being toxic and to beat out the competition funds loaded up big time on this and took amazing hits when things collapsed.
ultra short bond fund and floating rate loan got hit the worst for supposed conservative funds.
those days are gone and both funds resumed their normal investment paths and are a whole lot safer than they were prior to the collapse.
non the less there is still risk and you have to decide for yourself if you want to take the chance.
personally i love floating rate high yield but not as my only fund. its only a portion of a well balanced portfolio in my case. i dont recommend any one fund as your only choice. there is more risk in the asset class itself if you pick only one fund then there is in that particular fund.
its rare that whats good or bad for bonds wont sink or make them rise across the board.
Last edited by mathjak107; 05-20-2011 at 02:23 AM..
We also have USAA and set up an appointment with their financial advisor. He wasn't particularly savvy and recommended basically USAA investments that didn't do well in the year following (as we expected), and would be catastrophic if/when the effects of QE outpace the banks restriction of credit and inflation accelerates (already starting to happen).
You'll do much better researching everything on boards like these and other internet resources, then deciding what will probably happen with the US economy and making your decisions from there. It's going to be tough for everyone: we're in uncharted territory here, as the US government and the Fed push us past the point of return, but with the mechanisms of the collapse very hard to predict.
If I were you, I'd buy and take possession of gold/silver (hide it well!) and ride out the next 3 to 5 years. Even if prices drop, you'll have saved the inflation and dollar devaluation that would have reduced your savings/investment by 20% or so every year. You simply won't get any investment returns in dollar-denominated assets that could match that, not without a 90% risk of losing it all.
100k? put it 100% into mlps/reits/high dividend equity.
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