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Advice on investing $25grand??
Old 05-24-2020, 01:37 PM   #1
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Advice on investing $25grand??

My wife's 99 year old aunt recently passed away and was kind enough to leave us $25,000. I guess I could just put the money in our saving account, but, I was hoping to invest it in some way. I have no debt to pay off (no mortgage, auto loan, credit cards, etc) and my income streams cover our monthly expenses. I have an IRA (Fidelity) which I have not touched yet as I don't need the money. I have low to moderate risk tolerance and will not need the money for at least 2-4 years. CD rates are very low, so I was thing about mutual fund? Any suggestions? I am retired and 65 years old. Thank you for reading this.
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Old 05-24-2020, 03:00 PM   #2
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... will not need the money for at least 2-4 years. CD rates are very low, so I was thing about mutual fund? ...
If by "mutual fund" you mean a stock mutual fund, those are generally recommended for money with a 5+ year time horizon.

If you mean a bond mutual fund, you can find those with widely varying yields, corresponding to wildly varying risk. There are those here who are deeply into these tradeoffs, so I am sure that someone will be along shortly to advise.

You should probably open a taxable account with Fidelity for this money.

Good job on your personal finances BTW.
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Old 05-24-2020, 05:13 PM   #3
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Hmmm ... 92 views and no one has arrived to talk about bond funds ??!!?!

OK, so ask Fidelity to help with bond fund selection. Go for conservative, not for high yield. Maybe a government bond fund or a high-grade corporate fund. Sadly, this may not get you more than CDs though. Fido can also help you buy CDs.
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Old 05-24-2020, 08:06 PM   #4
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I would park the money in an online savings account. CapitalOne is offering a $100 bonus for each $10,000 deposited on top of their regular interest of 1.3%. So if you added in another $5k and made a $30k deposit for a year that would be 2.3% for the first year (assuming that the 1.3% holds for a full year).

https://www.capitalone.com/score500/...E&gclsrc=aw.ds

Once you clear the 90 days for the bonus, you can start keeping your eyes open for CD specials... if you find one great, if not you're still earning a competitive rate. In your area, I've found some good CD specials over the last year from GTE Financial CU, Navy Federal CU and Suncoast CU.

I would not consider brokered CDs from Fidelity, Vanguard and the like. While they are safe and convenient, the returns are pathetic.

Another alternative if you have any military ties is to put $20k in the CapitalOne online savings instead of $30k and buy his and her $3,000 3.5% 1-year Special Easy-Start CDs at Navy Federal CU.

https://www.navyfederal.org/checking...ertificate.php
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Old 05-24-2020, 08:32 PM   #5
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I'm at Fidelity. I'd recommend FZROX, their Total Market zero expense index fund for equities. I use FXNAX U.S Bond Index fund for bonds. A retirement date index fund would be a simple solution to combine stocks and bonds into something you can tolerate. The earlier the date the more bonds it will have. FIKFX Fidelity Freedom® Index Income Fund is the most conservative with about 17% stocks. Most of the big brokerages would have something very similar. Watch out that the fund you choose doesn't generate too much income since it will be in a taxable account. If your IRA RMD's will be large a Roth conversion might be useful.
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Old 05-25-2020, 04:37 AM   #6
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If you want to use the money in 4 years, how about bonds that mature then?
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Old 05-25-2020, 05:55 AM   #7
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Not what you asked, but if it were me, I'd spend it on a luxury or two. You say you don't need the money. Your aunt gave you a gift. I bet she wanted you to enjoy it. (I'm disregarding the notion that investing in a mutual fund is enjoyment).
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Old 05-25-2020, 05:55 AM   #8
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It should be invested according to your IPS. If you don't have one, create one.

If that's too much trouble, I suggest a CD or money market fund.
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Old 05-25-2020, 07:00 AM   #9
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Hmmm ... 92 views and no one has arrived to talk about bond funds ??!!?!

OK, so ask Fidelity to help with bond fund selection. Go for conservative, not for high yield. Maybe a government bond fund or a high-grade corporate fund. Sadly, this may not get you more than CDs though. Fido can also help you buy CDs.
Sorry I'm late.

IGLB with an SEC yield of 3.53%, 2378 investment grade corporate bonds. I just bought some more of this last week.

iShares Long-Term Corporate Bond ETF


You could also go intermediate, short term, or all in one. Fidelity's search tools for mutual funds and ETFs are excellent.
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Old 05-25-2020, 07:15 AM   #10
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Not what you asked, but if it were me, I'd spend it on a luxury or two. You say you don't need the money. Your aunt gave you a gift. I bet she wanted you to enjoy it. (I'm disregarding the notion that investing in a mutual fund is enjoyment).
Not a bad idea at least for some of it. What would make your life better and easier? What regular chores do you abhor doing? Hire them out using some of that money
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Old 05-25-2020, 07:33 AM   #11
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Since you are asking for suggestions I would say put it in Wellesley. It has a great track record and is low to moderate risk. This has been a great fund for my parents who inherited some money as well. They use the account for periodic splurges or extraordinary expenses. Better than a savings account as it builds back the money (so the inherited amount lasts longer or maybe even indefinitely).
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Old 05-25-2020, 08:06 AM   #12
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Put your money on Vegas - MGM stock. It's about to reopen or NCRL - Norwegian Cruise ship .. for a quick 10% or more gain.
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