Jim <noreplysoccer[at]hotmail.com> wrote:

- quote -

By my math he's got 800K of 1,400K invested in stocks (I'm including the
zero as fixed income in the 1,400K) That's 57% in equities which is a
pretty good moderate mix. If he's been comfortable with that, I'd
continue to use roughly the same allocation.

I'm not sure 25% equities is actually lower risk than 50%, but it's
definitely lower return.

The range I usually see recommended for long-run investing (nothing
needed within 5-10 years) is somewhere between 50% and 80% equities.

IMO, For long-term investments, below about 50% equities, lowered risk
from avoiding stock volatility is illusory. Stocks make a great
inflation hedge, and buying up fixed income in a low rate time (like
today) risks disaster if inflation picks up. Just because we haven't
had serious inflation in 20 years doesn't mean it's lost and gone
forever. You can use cash or short-term stuff (and this is clearly
correct for *short-term* investing), but then you're going to earn next
to nothing. My Vanguard prime MM account is paying around 1.3%/year
right now. You can't really afford to have more than 20-30% cash in a
portfolio if you expect a decent amount of growth.

That said, cash could be exactly the right thing for someone who has way
more than they need already and is primarily concerned with insuring
against catastrophe. Also it could be right for an investor who wants
to make private business deals for the equity portion of their assets
and needs maximum flexibility. My parents and I (business partners)
have had a lot of cash around the last few years and have used it to buy
up a couple of small competitors during a shakeout time in our industry.



Michael

How much of your assets do you WANT in stocks? right now you are at
50%. is this too much or not enough? ($500,000 or $1,000,000 is in
stocks if my math is right, correct?). If all the 200k went to stocks
you would be 70-30 which is aggressive investing. 50% stocks is
moderate, 25% stocks is low-risk.

47 years old, you'll "need" retirement $$ in ~20 years. I think 50%
stocks-30% bonds and 20% cash is OK.

I understand with rates going up, getting bond funds may not be wise,
so I would suggest a money market fund for most of cash, and use the
cash to rebalance if 50-30-20 assett allocation moves more than 3% off
theoretical allocation.

my $.02. of course you paid less for it...


"msmap" <msmap[at]houston.rr.com> wrote in message news:<JPDGc.18405$T72.6228[at]fe2.texas.rr.com> ...
- quote -

Assumptions were close. Individual has 600k in equity MF's, 100k in bond
MF's, 200k in individual stocks and 300k in "cash"
"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:060720041153047871%john[at]johnweeks.com...
- quote -


======================================= MODERATOR'S COMMENT:
Please trim the post to which you respond.

In article <zryGc.16953$mY2.7377[at]fe1.texas.rr.com> , msmap
<msmap[at]houston.rr.com> wrote:

- quote -

What does the rest of his portfolio look like? What are his investment
goals? What are his personal goals?

If this is the only thing he has, and he plans to do the normal 65
retirement thing, then I would consider investing in a well balance
portfolio with significant exposure to the stock market. Put a 1/3
in index funds, 1/3 in bonds, and 1/3 in carefully selected mutual
funds. Look for investments that have no upfront fees, low transaction
costs, and low expense ratios. This should do pretty well over a 20
to 30 year time frame.

This is enough money to get the attention of a professional financial
planner. If the person in question has a different set of goals from
what I assumed, then perhaps this would be a case where a planner
would be of help.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

47 yr old with no debt. Have $200,000 zero maturing in August inside IRA.
Where would you recommend reinvesting this money now? This was paying 8%.

TIA