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If someone has $10 mil in cash, or if a financial adviser is given that kind of money to invest, should it be different than managing a smaller amount, if the goal is both long term growth?
Warren Buffet preaches investing in S&P500 index fund. This seems too simple for that much money... and I don't see him doing this himself -- I assume majority of his money is invested in Berkshire Hathaway. Isn't investing in BRKA one better option?
When you hit the 10 mill range you don't even need high returns on your money. So why not put it in a index fund you'll still average 10%+ and that's a lot year over year. There's no need to over complicate it unless you just like messing with it. Warren buffet Seems to have a talent many people don't that's why he doesn't put his money in a index fund. For the average person a index fund is the best way for them to make money because many people are not willing to research companies before investing.
When you hit the 10 mill range you don't even need high returns on your money. So why not put it in a index fund you'll still average 10%+ and that's a lot year over year. There's no need to over complicate it unless you just like messing with it. Warren buffet Seems to have a talent many people don't that's why he doesn't put his money in a index fund. For the average person a index fund is the best way for them to make money because many people are not willing to research companies before investing.
Absolutely true. You are no longer in the accumulation stage, so why take unnecessary risks.
If you listen to people who have already accumulated their wealth, they are very happy with lower returns in bonds which they own outright, not in a fund, and hold to maturity. Their main goal is to preserve principal and minimize their exposure to price volatility. The principal throws off enough income, there is no need for excessive risk or worry.
Individual stocks are no place for the novice. That's why mutual funds were created - and then, later, index and sector ETFs.
For many years when I was working I was invested in an index fund and did very well, until the market ran into trouble. Since then, I've been in actively managed funds, although, every now and then, I've been tempted to buy some sector ETFs.
That said, if one only had $10k and had a decent time horizon and wanted growth, all of it should be put into growth vehicles in the beginning.
Otoh, with $10M, imho, a good part of that should be invested more conservatively, with perhaps 50-60% geared to growth. There are too many variables for a one-size fits all when dealing with $10M.
Last edited by Ariadne22; 12-23-2017 at 01:55 AM..
If I had $10k, I would invest more aggresively than if I had $10 million. That’s what I did and if I had gone with just a balanced mutual fund, I’d probably have 1/50 of what I have now. If I had $10 million, I’d just open an Ally Savings Account that gives 1.3% interest.
bonds make no sense for those in their accumulation stage who are long term investors .
there would be no logic in it .
bonds only come in to play when you bump time constraints for the money or your pucker factor for dips is low .
BUT there is not one stitch of evidence that those with low pucker factor stick with balanced funds when the going gets tough .
losing money to someone with no risk tolerance is losing money and studies show they are no more inclined to stay put in balanced funds as compared to growth funds .
there is only one fund i know of that has shown good investor behavior and that is vanguards wellesly income .
it is one of the few funds where generally the fund return and investor returns are close .
but there could be a reason .wellesly is usually not in 401k's or other company plans .
it seems to have gained its loyalty through word of mouth and more sophisticated forums ,especially retirement financial forums so i believe it attracts a more sophisticated investor .it is the only explanation i can think of
Absolutely true. You are no longer in the accumulation stage, so why take unnecessary risks.
If you listen to people who have already accumulated their wealth, they are very happy with lower returns in bonds which they own outright, not in a fund, and hold to maturity. Their main goal is to preserve principal and minimize their exposure to price volatility. The principal throws off enough income, there is no need for excessive risk or worry.
Individual stocks are no place for the novice. That's why mutual funds were created - and then, later, index and sector ETFs.
For many years when I was working I was invested in an index fund and did very well, until the market ran into trouble. Since then, I've been in actively managed funds, although, every now and then, I've been tempted to buy some sector ETFs.
That said, if one only had $10k and had a decent time horizon and wanted growth, all of it should be put into growth vehicles in the beginning.
Otoh, with $10M, imho, a good part of that should be invested more conservatively, with perhaps 50-60% geared to growth. There are too many variables for a one-size fits all when dealing with $10M.
many who won the game still play for lots of reasons .
for one thing they may never have left their accumulation stage. they have pensions and ss that cover everything so for them the pay check never stopped .it is business as usual .
others are not investing for themselves , they are investing for heirs and legacy money .
still others love the thrill of the hunt and they enjoy making money more than the things money buys . they just love the art of the deal or the art of winning .
If I had $10k, I would invest more aggresively than if I had $10 million. That’s what I did and if I had gone with just a balanced mutual fund, I’d probably have 1/50 of what I have now. If I had $10 million, I’d just open an Ally Savings Account that gives 1.3% interest.
At that point, you'd should be learning how to buy bonds. We had a poster, Robyn, died recently, formerly an atty in FL with an seven/eight figure portfolio, who bought only bonds - she really knew her way around the trading desks - and was very happy with 3%. Mostly bought munis, but also bought Treasuries. I miss her. I learned a lot from her.
many who won the game still play for lots of reasons .
for one thing they may never have left their accumulation stage. they have pensions and ss that cover everything so for them the pay check never stopped .it is business as usual .
others are not investing for themselves , they are investing for heirs and legacy money .
still others love the thrill of the hunt and they enjoy making money more than the things money buys . they just love the art of the deal or the art of winning .
$10M is harder to invest at high return than 10K. I remember back in the day, all the Bitcoin in the world was worth: $10M. But could you have bought 10K worth of Bitcoin back then as a rampant speculation? Perhaps with some great difficulty, and it would be worth Billions now. But not 10M. Where to invest 10K now is anyone's guess.
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