Ross812 Posted January 28, 2014 Share Posted January 28, 2014 I am not a financial planner or RIA, I only manage money for family members. One of my inlaws recently had a stroke and is not capable of managing their money. He has a Scottrade account and was a daytrader who managed to lag the market the last few years but hasn't lost any money. His wife met with a financial planner who was more than willing to stick them in some low cost bond funds for a nice commission. The inlaw asked me to look over the accounts and put them in income producing assets that need minimal management. The couple wants to be able to cash a check every quarter for $5000 to supplement their SSI and small pension. The couple's SSI+Pension income is ~40k. They have no debt. I have never worked with someone who is aiming for capital preservation and income. My general answer to people who are in 15+ years out and have no inclination to learn how to invest their own money is to buy a low cost index fund and those closer to retirement to start blending in bond funds. Six years ago I would have put my inlaws nest egg (500k) into AAA bonds, Government bonds, and an online money market paying >5%. The extra 25-30k in income without touching the premium in addition to their SSI and pension would have made for a nice retirement. Today, money markets are paying <1% and bonds are yielding next to nothing, which leaves dividend paying stocks, mutual funds, and CEFs as potential candidates. Do you all have any advice on any longterm securities paying a decent yield without going too far down the quality curve? What about allocation between bonds and equities considering the environment we are in right now? So far I'm considering equity: KMI, MKC, PEP, IBM, BP, CHRW, LRE.L, CHRW, BAH, KO, WMT; Bond fund/etf: DODIX, FOCIX, BOND, HYS; Closed end fund: INF, PCEF My goal is a 4% yield with long term capital preservation. Link to comment Share on other sites More sharing options...
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