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I have $500,000 coming to me soon from a property sale and am looking for the best fixed-income product to invest in. I have no immediate use for these funds but I’m hoping it can be tax efficient too. Any suggestions?
I believe that both risk tolerance and eventual purpose of the windfall were addressed in the article but only ever so lightly. I'm also unsure of what a MIC is but I'm not going there.
You may be getting confused because this is a Canadian column. I paused at the Canada Deposit Insurance Corp.
Say "Jim" (if that really is your name), have you considered insurance products? Here in the US, they're often tax sheltered. Not that I've even looked at these things, but since you asked for suggestions.
John, you've been a member of both FundAlarm and MFO for well over ten years now, and in that time you have been exposed to innumerable "how to invest" posts.
You know, or should know, that such a question without a considerable amount of information on the investor's background is totally useless.
Among the factors necessary to give any sort of useful answer to a question like this would be the investor's age, risk tolerance, investment goals, ability, knowledge and desire to spend the time necessary to personally monitor investments, years to retirement, other sources of retirement income, etc.
Without a fairly detailed knowledge of those factors this sort of question is a complete waste of time.
@Charles- Are those rates on CD's issued by Schwab Bank, or from another bank through their BondSource portal? I'm guessing the latter, since your post shows the BondSource logo. The reason I ask is that I was checking the BondSource portal a few weeks ago, and it seemed to me that I could do just about as well locally at First Republic Bank, and I rather like being able to walk two blocks and talk to our money.
- Article title is seeking “safest” way while the questioner specifies “best way.” Hate to quibble, but those could be quite different.
- Paying down debt is always a good idea, but again, that’s not what the questioner is asking. He clearly wishes to invest the money in something. One difference here is that the funds, if invested, are likely be be liquid and at the disposal of the investor. Paying off debt is fine, but you sacrifice some liquidity.
- At least the author understands that fixed income is a tough call with rates still near historic lows and seemingly on the way up.
@OldJoe is correct that not enough information is provided about the investor and his purpose. I’ll add that a lot will depend on the future path of rates and the health of the economy during the period the money is invested. So, IMHO, there is no right answer. Conventional wisdom is saying to stick to shorter duration bonds. But conventional wisdom is just that. Nothing more. Often wrong.
Note that if (as the article title suggests) the question is “What is the safest investment?”, than it seems to me it would be hard to beat short term T-Bills.
Personally, I own a few diversified income funds - but it would be absurd of me to suggest that mine represent the very best of whatever is available. Fixed income constitutes a very wide universe.
John, you've been a member of both FundAlarm and MFO for well over ten years now, and in that time you have been exposed to innumerable "how to invest" posts.
You know, or should know, that such a question without a considerable amount of information on the investor's background is totally useless.
Among the factors necessary to give any sort of useful answer to a question like this would be the investor's age, risk tolerance, investment goals, ability, knowledge and desire to spend the time necessary to personally monitor investments, years to retirement, other sources of retirement income, etc.
Without a fairly detailed knowledge of those factors this sort of question is a complete waste of time.
With the limited information provided I'll go, as some others have, with a cd ladder split among a couple of banks also making sure they are FDIC insured. The quicker the money might be needed to shorter the maturity.
Comments
Regards,
Ted
Derf
Say "Jim" (if that really is your name), have you considered insurance products? Here in the US, they're often tax sheltered. Not that I've even looked at these things, but since you asked for suggestions.
https://www.google.com/search?q=Life+insurance+helps+with+retirement+planning,+but+beware+of+the+pitfalls&ie=utf-8&oe=utf-8&client=firefox-b-1
John, you've been a member of both FundAlarm and MFO for well over ten years now, and in that time you have been exposed to innumerable "how to invest" posts.
You know, or should know, that such a question without a considerable amount of information on the investor's background is totally useless.
Among the factors necessary to give any sort of useful answer to a question like this would be the investor's age, risk tolerance, investment goals, ability, knowledge and desire to spend the time necessary to personally monitor investments, years to retirement, other sources of retirement income, etc.
Without a fairly detailed knowledge of those factors this sort of question is a complete waste of time.
Thanks-
OJ
- Paying down debt is always a good idea, but again, that’s not what the questioner is asking. He clearly wishes to invest the money in something. One difference here is that the funds, if invested, are likely be be liquid and at the disposal of the investor. Paying off debt is fine, but you sacrifice some liquidity.
- At least the author understands that fixed income is a tough call with rates still near historic lows and seemingly on the way up.
@OldJoe is correct that not enough information is provided about the investor and his purpose. I’ll add that a lot will depend on the future path of rates and the health of the economy during the period the money is invested. So, IMHO, there is no right answer. Conventional wisdom is saying to stick to shorter duration bonds. But conventional wisdom is just that. Nothing more. Often wrong.
Note that if (as the article title suggests) the question is “What is the safest investment?”, than it seems to me it would be hard to beat short term T-Bills.
Personally, I own a few diversified income funds - but it would be absurd of me to suggest that mine represent the very best of whatever is available. Fixed income constitutes a very wide universe.