update....
I met with my dad last week. Although we have not made any firm decisions, I did give him a couple risk tolerance quizzes, turns out he's in a moderate risk category. Still, given his age of 74, we're going to keep him pretty conservatively invested.
In looking at his "other" investments, which I had never before seen, it seems most of his portfolio was in bonds. While this seems at first glance to be "moderate" risk, many of these are junk bonds or ones that have underlying derivatives, thus quite risky. Also some of them were long-term bonds, which have moved a lot. As we all know, the S&P was down about 55% at it's worst....my dad's portfolio was down about 30%. Obviously not as bad as 100% equities, but he's losing sleep at night.
Fortunately, since March 9th, things have recovered somewhat, so he's only down about 19% now, and he's mentally ready to make a shift to safer investments.
The universe of potential products at this point is:
TIPS
laddered CDs
money markets (not funds, but accounts)
Bonds or bond funds (possibly laddered), although shorter term and higher quality than what he's in
Fortunately he's saved quite a bit, and has a low annual budget. As a result, if we can get him 4%/year, he'll be thrilled. While this may not be easy in the short-term, I think it's doable in the medium term once yields pick up a bit.
For now we wait on his 2009 tax return...and I nail down detailed funds and optimal mix of the above.
Current investments before any changes
60% bonds - his "advisor" has him in 41 different accounts (ouch)
40% cash - This is the money from the real estate sale
Future investments
Who knows...but I'm guessing something like
10% stock funds (slight bit of growth potential)
10-20% Short to intermediate term high quality bonds or bond fund
40% laddered CDs (stick with short maturities for now)
30% TIPS
Oh and lastly...he's paying his current advisor $6,000/year in management fees alone. We may pull the advisor, manage it ourselves, and thus save that amount/year.