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Any knowledgeable investment members? #3034130
04/16/22 02:03 PM
04/16/22 02:03 PM
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TJP Offline OP
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Coming to point where we have to rollover some non IRA type investments. We're not much on the gambling side not am I knowledgeable in this area. A few people I have spoken with are pushing annuities with a fixed rate or indexed
The indexed is a 10+ year deal with a guarantee on the principal only but has shown substantially higher return's.
the fixed rate is a guaranteed return and can be had for a much shorter period 3-5 years at ~ 3% which isn't much but way better than banks, C/d's etc.
With the economy in a flux I'm hesittant to lock it down for much more that 3 years but that could be the wrong move as well ?

Any thoughts / wisdom out there ?
TIA
Tim

Re: Any knowledgeable investment members? [Re: TJP] #3034139
04/16/22 03:24 PM
04/16/22 03:24 PM
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Annuities are held in very low esteem by the finance pros I've spoken with.
I put some $$ in one - Guggenheim - a few years ago after a really attractive high-return sales pitch.
Not only has it not performed all that well, the customer service from that outfit is the worst I've seen from any business.
I'm going to either roll it into my Fidelity account, or cash out & take the initial beating, then buy an appreciating hard asset with that money.
FWIW, financial advisors in my area aren't interested in anyone with under $100K to play with.
Given the current economic & geopolitical situation, folks I know with money are buying hard assets like cars & property.

Re: Any knowledgeable investment members? [Re: TJP] #3034142
04/16/22 03:38 PM
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Too complex of a subject to answer on a forum since you really need to understand the context of the decision. For example, if you have any high priced debt such as credit cards then pay those off before investing. If not high interest debt then perhaps think about paying off low interest debt such a mortgage. If zero debt then you look at retirement assets vs retirement requirements and then you look at the portfolio of retirement assets. Social Security is an inflation protected annuity so most people don't need more annuities but it all depends.

Re: Any knowledgeable investment members? [Re: AndyF] #3034222
04/16/22 07:47 PM
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I just found out about an interesting safe investment.
I-bonds are treasury bonds based on the inflation rate.
right now they are at 7 percent, in may they change to over 9 percent.
if you buy before may you get 7 percent for 6 months, then in 6 months they go to 9 percent for 6 months.
there are a few catches.
that interest rate changes every 6 months. but it doesn't change for you till after your 6 months are up.
you can't withdraw it for a year. And if you do it before 5 years you lose 3 months of interest.

you can only put 10k per person and 5k of your tax return in.
but if you have that kind of change lying around not doing any work for you, and you are very risk adverse, this is the way to go.
otherwise I found, unless I am willing to take some serious risks, I make more just putting it into the s&p 500 index funds.

Re: Any knowledgeable investment members? [Re: Andrewh] #3034249
04/16/22 09:16 PM
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Thank you all for the reply's especially Andrew which has my head spinning but very interesting information. I do wish there was just a way to say here's 25 -100K, tell me what to do with it to get the most return with the least risk
Anyone else ??? Thanks again

confused shruggy beer

Re: Any knowledgeable investment members? [Re: TJP] #3034255
04/16/22 09:40 PM
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https://www.investopedia.com/articles/investing/092215/top-5-tips-etfs.asp#:~:text=Exchange%2Dtraded%20funds%20(ETFs)%20that%20invest%20in%20TIPS%20and,purchasing%20power%20due%20to%20inflation.

Exchange-traded funds (ETFs) that invest in U.S. Treasury inflation-protected securities (TIPS) present a convenient way for investors to gain exposure to these government-guaranteed fixed-income instruments. TIPS are Treasury securities indexed to inflation, meaning that when inflation rises, so does the principal amount of the security and the associated interest payments.

Last edited by BDW; 04/16/22 09:41 PM.
Re: Any knowledgeable investment members? [Re: TJP] #3034258
04/16/22 09:45 PM
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Like AndyF said it is a bit more complex than that.
how soon do you need the money if ever.
how much risk are you willing to take?
how well adjusted are you to the fact that the stock market goes down a lot sometimes, but it eventually comes back.
can you sit on a -75 percent loss and wait it out or do you have to jump ship.

I have been investing a long time. lost big, and won big, to learn some very painful lessons.
I try to follow my rules, but even I get lost in the moment sometimes.
but you really have to be aware this is a long game, not overnight thing.
some people get lucky, the guy that won big on gamestop.
the people that got into crypto early and some of the ipos that hit big.
for the rest of us, we just try to creep along, to get where we need to be.

I gamble with my retirement money. no mincing words about it.
But I don't gamble big.
I bet on a few things that returned over 140000 percent. I didn't miss any decimals. 10 bucks into 14k. but note I only bet 10 bucks.
some things like google, apple and Ferrari did 400 percent gains. but again I only bet like 2 to 5k
I even did gamestop and doubled my money.

because of that I don't get huge jumps. I am trying to find a better balance vs the time I take now.
The index funds for the s&p 500 do quite well. averaging 6 to 8 percent at any given point. right now they are in a bit of a slump. and depending on how the war goes, it could go down further.
but generally speaking in any 5 year period it is up from the start.of that period.
it is the set it and forget it of funds.

but that ibond is a sure thing, and I don't mind betting what I can on stuff like that.

ibonds and cd's are for rainy day funds. stuff I don't need right now and hopefully for the foreseeable future. but I can get out if I need to.
Roth ira's are for rainy day funds too, but the interest is free.

Re: Any knowledgeable investment members? [Re: TJP] #3034259
04/16/22 09:47 PM
04/16/22 09:47 PM
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There is a guy who calls himself Stan the Annuity man who has a lot of online resources to learn about annuities.

https://www.stantheannuityman.com/annuity-scams-beware-of-perfect-answers

As previously mentioned, annuities are not very well regarded by financial experts. A lot of smoke and mirrors, and snake oil in their marketing. Salesmen get high commissions and bonuses for selling them, including perks like cruises. Somebody’s coming out ahead with these and it’s probably not the customer!
This is too bad, as the idea of exchanging money for a guaranteed income stream is appealing, that is what a pension is after all.
I’m am working with a financial planner to get myself ready for retirement, this winter at age 60 is my plan now. I’ve been investing since college and reading financial articles and literature for 40 years, so consider myself pretty financially savvy. What I’m finding from working with the advisor is that I’m pretty ignorant about taxes. Saving a lot during one’s working life is only part of the battle, tax strategy is the other. Taking distributions from your 401K and IRA can kick your butt tax wise, not just taxes on the distributions but on your social security. No one tells you that during your working career when employers and “experts” tell you to save as much as possible in your 401K.
A YouTube financial advisor I like is Josh at Heritage Wealth Planners. He’s a no BS type guy with interesting viewpoints.


Re: Any knowledgeable investment members? [Re: Mastershake340] #3034270
04/16/22 11:04 PM
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Depends on how much and the key you mention is low/no risk.

Only a few things to do with that particular requirement.

The amount makes a big difference. I like to buy stock and write calls against it. If it goes up, great, goes down the calls cover some of the drawdown.

Only thing risk free is buying US treasuries which suck for return and will get killed by inflation.

Annuities = Barf... Salesman get a huge front end commission and the returns are crap. When the market goes up 25% and you get your 6-7%... not so great. Even the downside in some is not limited.

Last edited by crackedback; 04/16/22 11:11 PM.
Re: Any knowledgeable investment members? [Re: TJP] #3034283
04/16/22 11:40 PM
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Originally Posted by TJP
Thank you all for the reply's especially Andrew which has my head spinning but very interesting information. I do wish there was just a way to say here's 25 -100K, tell me what to do with it to get the most return with the least risk
Anyone else ??? Thanks again

confused shruggy beer


The best return with no risk is to pay off debt. If you have zero debt (house, cars, credit cards all paid for) then the next safest place to invest 25 to 100K would be some sort of bond fund. An I bond fund or a T bond fund. But investing in bonds right now is going to suck since you'll lose money every time the Fed raises rates and they'll be raising rates for the next year or two. So you'll really get sick of opening up the mail and seeing your bond funds getting killed.

Stock market right now is a crap shoot. Lots of really weird stuff going around the world and nobody can figure out where the market is going. Not really a lot of reason for the market to go up right now and a lot of reasons for it to go down. Good chance of a recession within the next year given the odds that the Fed is going to be raising rates a fair amount.

If you don't have any debts then nothing wrong with sitting on your cash at the moment. If you really feel like you need to be invested then put a little into an S&P index fund and a little into an I bond fund and let it ride. If you want to get bold then you could make a targeted bet on who is going to win from inflation. There are some businesses that do really well during inflation so do some research and invest in that target group.

Last edited by AndyF; 04/16/22 11:42 PM.
Re: Any knowledgeable investment members? [Re: AndyF] #3034320
04/17/22 09:03 AM
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There are no I bond funds. They aren’t sold on the secondary market so you can only buy and sell them through the Feds.
TIPs can be bought in the secondary market through mutual funds and ETFs. Sadly they end up being like any other bonds when in funds and are getting beaten up this year with interest rates going up. frown

Re: Any knowledgeable investment members? [Re: topside] #3034355
04/17/22 11:13 AM
04/17/22 11:13 AM
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Originally Posted by topside
Annuities are held in very low esteem by the finance pros I've spoken with.


My experience as well.

Re: Any knowledgeable investment members? [Re: Mastershake340] #3034357
04/17/22 11:29 AM
04/17/22 11:29 AM
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Originally Posted by Mastershake340
There are no I bond funds. They aren’t sold on the secondary market so you can only buy and sell them through the Feds.
TIPs can be bought in the secondary market through mutual funds and ETFs. Sadly they end up being like any other bonds when in funds and are getting beaten up this year with interest rates going up. frown


True, but there are bond funds designed to mimic stuff that you can't buy. The various inflation proof bond funds did great when interest rates were dropping but now that real inflation is here (and interest rates are going up) the inflation proof bond funds are dropping. There is no "safe" investment that protects from inflation and raising interest rates at the same time. Some sort of commodity play can make money but those aren't considered to be "safe". Real estate might work out okay or gold, but those all have risks too. REITs are fairly safe when the economy is good, but raising interest rates and a looming recession are bad news.

Re: Any knowledgeable investment members? [Re: 340Cuda] #3034360
04/17/22 11:35 AM
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Originally Posted by 340Cuda
Originally Posted by topside
Annuities are held in very low esteem by the finance pros I've spoken with.


My experience as well.


kind of the timeshares of the investment world. “I have an annuity but I need cash now”

Re: Any knowledgeable investment members? [Re: AndyF] #3034374
04/17/22 12:40 PM
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Not a fan of bond funds.

if you want safe, buy the actual bonds you want, hold to maturity and don't sweat the price fluctuations/movement in between.

Last edited by crackedback; 04/17/22 12:42 PM.
Re: Any knowledgeable investment members? [Re: crackedback] #3034387
04/17/22 01:16 PM
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while I agree paying your debts is a "sure" thing, I disagree on doing it.
I hate to be cash poor but asset rich.
if you are buying now it is a problem, but when interest rates were 3 percent and under, I would rather invest the cash than pay off a debt.
It is a risk but I would rather make 3 percent over the 3 percent I owe.
or if a great need for cash arises I have it on hand instead of not owing on my home or car.

Re: Any knowledgeable investment members? [Re: crackedback] #3034388
04/17/22 01:22 PM
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I really appreciate all the feedback / comments. This is not money that we anticipate needing anytime soon and is actually there more to make sure the wife is Ok should something happen to me. It is at this time 100% tax free and we have ZERO debt. There are additional accounts if immediate $$ are needed.

The comments regarding the current state of the economy/ interest rates, political issues are what is concerning me. With c/d's and savings paying .05% at best, that's a may as well put it in a mason jar. The annuities came about as I am not financially savvy and there are a few 3 year plans paying 3% which obviously is way more attractive than .5%. My thought was hopefully in 3 years things will have settled down a bit and there may be better choices /options.
I'm not overly familiar with the bonds but if my understanding is correct they sound more appealing than the annuity. I did a little looking and saw that some are limited to 10 k per person per year but it's possible I wasn't looking in the right place shruggy
My accountant said put it in vanguard but the potential for loss is a bit unnerving blush confused
So with the above added information is there additional input on what might be best ?
Thank you again all for your inputs upbeer

Re: Any knowledgeable investment members? [Re: TJP] #3034422
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Re: Any knowledgeable investment members? [Re: massdaytona] #3034427
04/17/22 02:56 PM
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If it is in an IRA based account now, DO NOT withdraw the money even if to send it to a different institution. Let the financial houses do the transfer to a new IRA/retirement based account. Is taking possession allowed to transfer yes, can you get hammered if something happens, yes.

Look at places like Schwab or other full service brokers. You can buy bonds through Schwab online for something like Free to $1 per bond.

I agree, nobody knows where any of the markets are headed. Other than historically, the drift is up, there are periods where it has taken a long time to recover from a drawdown.

I'm not a mutual fund fan. Most don't outperform the index they are compared to over the long term. You pay someone to underperform? Yeah makes sense.

Last edited by crackedback; 04/17/22 03:11 PM.
Re: Any knowledgeable investment members? [Re: TJP] #3034439
04/17/22 04:09 PM
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Originally Posted by TJP
Thank you all for the reply's especially Andrew which has my head spinning but very interesting information. I do wish there was just a way to say here's 25 -100K, tell me what to do with it to get the most return with the least risk
Anyone else ??? Thanks again confused shruggy beer


I suggest you go to the Fidelity website and do some reading. Some research requires you to have an account, but you can create one without having any money there. They also have investment managers that you can call if you need/want assistance. There are likely other investment sites you can use, but I use Fidelity so it's the only one that I'm familiar with. ....and you're right. Your money should be earning you more than what your savings account is paying.

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