How to invest 1.2 Million for ER?

[unclemick]

AET Aetna, BWA Borg Warner, EMR Emerson Electric, NUE Nuccor, UNP Union Pacific.

Will they grow or blow - only the Norwegian widow knows and she ain't telling - she used her 'casino money' she keeps in a special old coffee can!

Just kidding. Plus I plan to shop a little more before the end of the month - see 'forever stock' thread.

heh heh heh - some things can't be cured - just endured.

 

[EddieG]

Firecalc

Based on this statement, I think you would get some clarification by going to FIRECALC, entering your scenario and observing the ending portfolio value graph. Vary your AA inputs and resubmit a few times and note how the graph changes in terms of both average ending value and range of ending values.
!

Firecalc:
This was entered at 40% Stocks or mutual funds. .20 expense ratio. For 45 years:

FIRECalc Results

Your plan is to spend $40,000 a year, or 3.33% of your starting portfolio.

FIRECalc looked at the 91 possible 45 year periods in the available data, starting with a portfolio of $1,200,000 and taking out $40,000 the first year of your retirement, and the same amount after adjustments for inflation each year thereafter.

(FIRECalc assumed your retirement portfolio is in investments that perform about like the US stock market as a whole. Mutual funds report each year how well they have performed relative to the stock market as a whole. Such information can help you see how relevant this information might be to your situation.)
The key result: a 94.5% Success Rate

For our purposes, failure means the portfolio was depleted before the end of the 45 years. FIRECalc found that 5 cycles failed, for a success rate of 94.5%.

 

[EddieG]

Norwegian widow stocks

I may be older but the 'hormones' never die - if football and wild women don't fix the problem - those pesky hobby stocks will always sneak in there.

15% Norwegian widow stocks - for the dividends - Riiiight!

heh heh heh - one fund out of the can is all it takes with auto rebalance/auto deposit to MM or checking. No advisors, no thinking, just have faith - and for Heaven's sake - do not read any stupid books!

Pssst - I forgot to mention the kayaks - and no there's no secret initiation - but some training is recommended.

Simple is extremely tough to do - but it does work. Target Retirement 2015 at 5% variable = 60% of income(the variable part) non cola pension plus early SS the other 40%. The Norwegian widow is lagniappe.

I may regret asking this, but what are "Norwegian widow stocks"?

Eddie

 

[brewer12345]

I may regret asking this, but what are "Norwegian widow stocks"?

Eddie

UM translator sez: steady payors of growing dividends.

 

[unclemick]

UM translator sez: steady payors of growing dividends.

Yep That's it.

heh heh heh - back in the old days(1990's) used Moody's then Mergent's handbook of Dividend Achiever's - now(in recent yrs) they have been franchising their research on dividnd payers out - Blackrock comes to mind.

heh heh heh - plus others

 

[pedorrero]

You might consider [-]dead lunatic investment advisor and Libertarian party candidate[/-] the late respected investment writer Harry Browne's "Permanent Portfolio" strategy (ca. 1988 : he'd have you put 25% (each) into T-bills, T-bonds, gold (bullion), and volatile common stocks; you re-balance annually. He claims you could get 5% a year real return on such a portfolio. (I don't know if the past two decades have borne this out -- I'd bet it has though.) The advantage (?) of this stategy is you're only 25% in equities. To me, having 50% in government paper is bad long-term inflation wise, but that was, to my knowledge, the final teaching of this old-line guru of the "hard money" movement of the 1970s. There is also a family of "Permanent Portfolio" funds you can research, although these differ significantly from what Browne advocated. Anybody who advocated buying gold or German Marks back about 1970 couldn't have been all wrong Nobody told me to buy Wal-mart either ... but I was only 7 years old then.

 

[unclemick]

1980's - my version(don't forget my Boglesque 500index is DCA'ing away in my 401k while I'm putzing) in IRA/taxable - Physical gold/silver/platinum coins, Putnam CEF foreign bonds, Vanguard Trustee's co-mingled International, Intermediate US Treasury, Vanguard 500Index, plus some timberland and a 10% joint venture in a Colorado gold mine and a rental duplex. Dumped the freeze dryed food in the 70's and we used the guns at the gravel pit for plinking - don't laugh I can name five off the top of my head who were avid collectors - a lugar guy, an old shotgun guy, and one you collected those various 'collector edition' gift boxed pistols. Don't forget the stocks are dead article came out circa 1982 - so 'collectors of various types' were viable investment strategies - wine and single malt scotch anyone?

Long story short(condensed version) - sold and ate the duplex proceeds/1 yr temp jobs while my 401k rollover in Vanguard compounded to fund about 80-90% of ER. All my other 1966 - 1992 investment brilliance was entertainment.

Thus I are a hard core Boglehead - mostly - except for hormones and I think the Norwegian widow is an absolute sweetie!

85% Target Retirement, 15% Norwegian widow stocks.

Your mileage may - AND I may change my mind.

heh heh heh

 

[wcv56]

hedge funds

I am not sure about others but many years of
using the basic stuff and doing my own investing
I found something for me to be on more or less cruise
control ( of course watching at least monthly).

As I have plans to retire soon at 52 with a bit more than
than 1.2 mil but not much, I found 3 managers I like.
I have my longer term bank/broker who manages 40%
which is also my money market cash living account
they watch it like a hawk and easy to travel around the world using ATM's.
Capitalistpig hedge fund 30%
Modern Capital Hedge fund 25%
IGNAX 5% that I have had for years ( PSPFX would be as good if not better without the front load).

I got in the Modern capital for less than the 500K
that is required adding more is 50K.
Cap Pig fund is 100K intial and adding is 10K minimum.

I figure that I done enough of working to get here and will concentrate on having fun and being a bit wise on spending.

No debt, help the parents and kids out a little.
27 years working in foreign countries out of last 32 years.
Owned 3bdrm house in Thailand but sold recently
bored with the place. Too Many Key-now ( cheap charlies flooding the place like a ghetto anymore with the locals having poor attitudes to foreigners also).

1st post

 

[wcv56]

tired to edit last post but learning the site still.
Single 3rd time ( 10 years now and counting).
Just bought house in East Tennessee for a home base!

 

[brewer12345]

wcv, how did you decide to invest in these specific hedge funds? How did you determine that they would offer good risk/reward and that they were not run by crooks?

 

[wcv56]

Modern Capital, the manager was on a investment forum I joined
so I/we use to talk. Was not hard after a few years to see the guy was
first class and the fund he started in 2004 which he talk to us about was really first class. He had great verifiable credintals also.

Capitalsitpig fund you can watch it on fox news every week.
Jonathan Hoenig is the manager. Both have certified accounting firms that will supply any info you need to verify the fund.

It is a bit hard unless you want to pay to get info on hedge funds
but there is alot of info out there.

 

[brewer12345]

I guess I am just not that trusting.

 

[wcv56]

don't blame you most of my mistakes have been with wives, friends and family concerning money.
Whatever makes you happy I guess.
I know what I like and like what I know now!.
Investing is not simple and just like everything is else not free
to do it well.

Cap pig
Historical Returns:

Fund
Dow
S&P 500
Nasdaq
Bonds
Hedge
2000
56.65%
-4.72%
-9.12%
-39.26%
13.37%
4.73%
2001
10.29%
-5.41%
-11.82%
-20.71%
6.74%
4.32%
2002
27.66%
-15.01%
-22.10%
-31.23%
11.56%
3.00%
2003
58.90%
28.28%
28.68%
50.77%
2.25%
14.36%
2004
6.39%
5.31%
10.88%
9.15%
3.50%
9.20%
2005
15.55%
1.71%
4.91%
2.12%
2.65%
5.90%
2006
8.12%
19.04%
15.79%
10.39%
3.49%
11.81%
2007
4.37%
13.30%
9.12%
12.46%
4.80%
7.03%
LOF:
384.62%
53.79%
20.38%
-25.40%
50.16%
83.84%​

 

[wcv56]

(Fund ) is the cap pig returns! ( I bought it as he seems to be a great down market investor).

The list is in order of the returns top to bottom

 

[haha]

Single 3rd time ( 10 years now and counting).

Seems like you could be a board guru on love, marriage and money and the interactions among same.

How about some cautionary tales from the trenches?

Ha

 

[haha]

tired to edit last post but learning the site still.
Single 3rd time ( 10 years now and counting).
Just bought house in East Tennessee for a home base!

Seems like you might be highly qualified to offer us your hard-won ideas on the interactions of love, marriage, and money.

Care to try?

Ha

 

[brewer12345]

wcv, I work in the industry at a fund that has an excellent track record and appears to be reputable (I certainly haven't seen anything shady going on). But I know that its OK because I work here. Institutional investors have staffs of very sophisticated people doing due diligence on the hedge funds they invest in. I don't know what individual investors do to get comfy with handing a pile of cash to a manager of a lightly regulated offshore fund.

 

[wcv56]

Well as I am being paid while I post and work for myself
I spend more time reading about investing and other peoples
opinions on stuff. Be a good listener I would say and if you take care of work everything else will be easier and what it ends up being will be. The road down was harder than the road up and faster. Those that say money is not everything most likely never had any they had to work for. Smart can be simple too!

 

[wcv56]

Brewer
I don't have any offshore funds but all my funds do invesnt a considerable amount overseas. I would agree with you on most hedge funds are on the straight and narrow as they also have their
money in the fund also. I cannot say that is so for the billion dollar ones but know the ones I am in, the manager has the majority of his wealth at risk in the fund also.

There is many things in life that would be considered as used car salesmen type dealings. We all ahve to be careful.
I have never had the aspirations to travel the world on the cheap
would rather be at work than being a sdlave to living on the cheap.

 

[wcv56]

Not sure if investment info is allowed but the administrator info I included
if others may be interested. Requires one to be an accredited investor.
Minimum 500K may be negotiable, it was for me but I had showed interest
on the fund before started ( would of if I had the cash at the time).
Good Luck!

For September 2007, the Modern Capital Fund, LLC returned 5.5% (net of fees), and the Modern Capital Fund, Ltd. (offshore) returned 5.4%,while the S&P 500 index was 3.7% and the Russell 2000 index was 1.7%.

For the year to date, the Modern Capital Fund, LLC’s performance is 25.4% (net) while the S&P 500 index is 9.1% and the Russell 2000 index is 3.2%. Cumulative return of the Modern Capital Fund, LLC since inception on April 1, 2004 is 103.5% (net) compared to the S&P 500 index at 44.6% and the Russell 2000 index at 42.2%. [FONT=tahoma,arial,helvetica,sans-serif]Month-end assets of the Modern Capital Fund, LLC were $81.0 million.

Since inception on July 1, 2007, the Modern Capital Fund, Ltd. (offshore) has returned 6.6%, net, compared to 2.0% for the S&P 500 index and -3.1% for the Russell 2000 index. Month-end assets of the Modern Capital Fund, Ltd. were $13.3 million.

[/FONT](Note: preliminary and subject to change)

The estimated performance figures [FONT=tahoma,arial,helvetica,sans-serif]presented above are net of all fees and expenses and represent the performance for a hypothetical investor who invested at the respective Fund’s inception and who participates in any new issue investments. The performance figures reflect a management fee of 1% from inception through October 2006, and a management fee of 2% from November 2006 to the present. An investor’s actual performance might be higher or lower based upon how that individual’s investment differs from that presented here. Past performance may not be indicative of future results.
Please find attached your monthly investor statement for Modern Capital
Fund, LLC for the period from 09/01/2007 to 09/30/2007.

Kind regards,

Pinnacle Fund Administration LLC
8008 Corporate Center Drive, Suite 310
Charlotte, NC 28226
Tel: 704-752-8996
Fax: 704-752-8997
Pinnacle Fund Administration LLC

[/FONT]

 

[chinaco]

Not sure if investment info is allowed but the administrator info I included
if others may be interested. Requires one to be an accredited investor.
Minimum 500K may be negotiable, it was for me but I had showed interest
on the fund before started ( would of if I had the cash at the time).
Good Luck!

Not sure if you are legit or a troll. The post kinda smells like you are fishing for a reaction.

Just on the outside chance you are a naive fool being taken for your savings...

IMHO - Hedge funds in your financial situation... Run. Look into a conventional investment strategy with a low cost mutual fund company like VG. If you do not know anything about investing... Pick one of their all-in-one funds or a couple that seem to fit your risk tolerance.

 

[wcv56]

Not sure if you are legit or a troll. The post kinda smells like you are fishing for a reaction.

Just on the outside chance you are a naive fool being taken for your savings...

IMHO - Hedge funds in your financial situation... Run. Look into a conventional investment strategy with a low cost mutual fund company like VG. If you do not know anything about investing... Pick one of their all-in-one funds or a couple that seem to fit your risk tolerance.

I am not a troll, just found this site.
I completely disagree with you and your investing experience seems to be lacking at best. I spend several hours a week reading on investing and have learned through years of experience that there is professionals that are much better than myself or the common person who thinks they know something on these message boards.

Did you know there has been more investors money lost
in the common mutual fund business than hedge funds by a long way ( $100 to 1. For every good mutual fund there is many poor performance ones and few mutual funds out perform their bench mark. So why don't we all just buy the indexs and go on auto pilot. Yes that is right lets all keep our money fully invested (which most mutual funds have to) during bad times.

I cannot believe people on a early retirement board does not have more knowledge than what I am seeing so far.
Oh I know lets all travel to cheap foreign countries, take some pics and tell stories of how cheap we can live in timbuktoo and where is the next frontier.

I want my managers to be as good in bad markets as
good markets and minimize risk with options, shorts
and other tools available in todays markets.

You are not showing yourself to be a very competent
investor and wouldn't know if anyone else was either.
Best you just buy Berkshire (BRK-B). Thinking that anything other than what granny would do be naive and a fool is just showing your ignorance

Look at Capitalistpig fund that I posted returns 2000 thru 2002. The fund opened in Aug of 2000.

I also like to get monthly performance reports.
Maybe hedge funds are not for all but if you are the average person that wants to retire quite a bit before
social security ( which I may not see) better wise up
I would suggest.

Good Luck either way.
A loss takes twice as much to make up for it.

 

[chinaco]

I am not a troll, just found this site.

Well, OK. If that is so... apologies for the troll remark.

Just to make sure I have this correct. You have $1.2 M of which

• 40% in in CD or very short-term funds
• 55% in 2 hedge funds (with low entry minimums)... not regulated well.
• and 5% in a global natural resource fund.

If this is true. You need to study some different material than the marketing lit or propaganda that has been fed to you. https://www.bernstein.com/CmsObjectPC/pdfs/BJ_Fall05_FindingRightAllocation.pdf

HF can improve performance of an overall diversified portfolio strategy (if you get the right manager)... and perhaps reduce some risk through low-correlation (according to academics). If it were my money and I would not allocate more than 10% Max. I absolutely would not allocate more than I could stand to lose.

Since most top notch hedge funds (i.e., Managers) are targeted at the wealthy with very large entry minimums... I can not afford to play in that arena. The small fringe hedge funds... I will pass on them.


But, everyone has their risk profile and investment strategy. It is your money. Good Luck!

 

[wcv56]

I have more than 1.2 mil ( this last month, Sept I was up $50K
NAV)
I do not have 40% in CD's, but have it in ETF fund, which has cash, bonds and equities with a full service broker whom I have banked with for 10 years and have 11% average returns over the 10 year time frame.
Presently he is 25% cash ( which is 5% MM cash) 60% index
equities ( basic materials, gold, silver, commodites, international
equity) 15% bond ETF's ( short, mid and long). The bond fund
is sold when he thinks time for a run in a sector as well as the cash MM ( actively managed in other words).

The hedge funds are much safer than the average mutual fund
and make money in down markets or lose much less.

Modern Capital manager has done well shorting different
MBS reits the last 1 1/2 years. Non Leveraged not like the loose
big guys or wild bunch.

If it is about regulated why do mutual funds lose many times
and thousands have been sold off or out of business
and are more likely to perform poorly because of restrictions
of how the fund has to be invested and what it has to be invested
in.

Many of the best mutual fund managers of past are running hedge funds now days. Not all but many do both.

If hedge funds were not good then the big investors would not be in them. Many hedge funds are limited to how many investors they as they are set up as partnerships and the managers have most all of their wealth in the fund.

Do some research and I am sure you will see hedge funds can
be great investments. Took me many years to be qualified to be in hedge funds and I prefer them. Hedge of hedge funds is the newest trend and has very little investment required to join them
( 25K, 50K or so).

 

[kcowan]

I was in a hedge fund for 2 years. Got out of it last December.

I wonder why Bear Sterns is having trouble with their hedge funds?