Where to Invest 100k

nurbsenvi on 16/01/2020 - 17:28

Hi everyone,

My parents recently sold one of their investment property to start diversifying their assets.

So after everything they ended up with 100k in their bank account

I was thinking of compartmentalizing the investment to following:

-Country bond (Brazil?) return of 6.8%?
-Gold, Silver
-Vangard ETF US stock (a bit worried about crash)
-Real estate (placing deposit on Winton real estate in Victoria)
-Some handpicked US tech stocks (AMD, Lockheed Martin, Disney, Take Two Interactive)
-Cash (ING)
-Put option (just for the heck of it)

We are complete ignorant in the investment game other than real estate
but I was thinking we should start diversifying now and learn how it all works
is this a good idea?

Financial Investment

Comments

  • bossmode on 16/01/2020 - 17:32
    +8

    Such a subjective question, but let's start with how old your parents are, what their risk appetite is, as well as what other assets/starting capital they have. $100,000 is great, but if that's all they have it's probably not ideal to invest all of it.

    If it were me, I'd put it into something very conservative for the folks, they'd want to be living off the returns and preserving as much capital as possible. I'd be thinking ETFs, REITs, and definitely not growth stocks.

    • DingoBilly on 16/01/2020 - 19:19

      Probably the best advice so far. Not enough information given to otherwise understand what their needs are.

    • nurbsenvi on 16/01/2020 - 19:24

      They are 65 and 70
      Can take moderate risks as they have other real estate exclusive of PPR.

      10% growth is their target with 100k
      But I can't find anything with 10% growth

  • Typical16-bitEnjoyer on 16/01/2020 - 17:54
    +1

    How old are they? Perhaps suggest they enjoy it and travel? Can't take the money with you when you expire.

    • nurbsenvi on 16/01/2020 - 19:19

      65 and 70 so
      Still got some time

      • bossmode on 16/01/2020 - 19:50
        +7

        65 and 70 so
        Still got some time

        Absolutely not, lol.

        The challenge you have to get over for yourself is that you need to adopt their perspective: You sound like a young adult with disposable income who can take a couple of financial hurdles and still recover. The way you so loosely talk about their funds, and also some of the options you're exploring for them is extremely risky considering their ages.

        Your parents are seniors, one of which is technically in the eyes of the government retired. Given the context of their ages, they cannot, and should not bear the same level of risk as you - the consequences of a setback given their seniority would wreck them if this $100,000 is a considerable portion of their funds.

        You're going to hear this time and time again, across every forum: Put aside some funds and have a chat with a financial planner. Have them assess what their assets are worth, what their risk appetite is and realistically, how far they can stretch that $100,000 so they can enjoy the rest of their lives.

        Despite your comment of them being able to 'take moderate risks' (so dangerous if you're 'ignorant' in the investment game!) you need to look at this from their perspective, not yours.

        • nurbsenvi on 16/01/2020 - 22:41

          Every one here is saying let them spend it they are gonna die soon anyway lol

    • whooah1979 on 16/01/2020 - 22:46
      +1

      $100k cash is a good inheritance.

  • HighAndDry on 16/01/2020 - 18:10
    +1

    -Country bond

    Yeah treasury bonds are a good…

    (Brazil?) return of 6.8%?

    Wtf no. Aust or US treasury bonds only.

    -Gold, Silver

    Gold is a good hedge.

    -Vangard ETF US stock (a bit worried about crash)

    Pretty safe. A crash would wipe out everyone, and that's why you hedge.

    -Real estate (placing deposit on Winton real estate in Victoria)

    Didn't they sell real estate to diversify? What would be the point of immediately putting it back into real estate. Also, even more likely than the stock market to crash.

    -Some handpicked US tech stocks (AMD, Lockheed Martin, Disney, Take Two Interactive)

    Unless they do a lot of research, indexed funds > self picking and choosing.

    -Cash (ING)

    Part of it as an emergency fund.

    -Put option (just for the heck of it)

    Lol

  • brendanm on 16/01/2020 - 18:22
    +3

    Bitconnect

    • EightImmortals on 16/01/2020 - 18:24

      …too late?

      • brendanm on 16/01/2020 - 18:33
        +7

        No no, I've started my own. Just send the $100k to my Bitcoin address and I'll send you the dividends. You literally can't lose.

        • EightImmortals on 16/01/2020 - 19:02
          +2

          OK done! brendcoooooonnnnnnnneeeeeecccccccctttttt!

          • brendanm on 16/01/2020 - 19:55
            +1

            @EightImmortals: You are getting an extra 5% for coming up with that excellent name.

            • EightImmortals on 17/01/2020 - 07:11
              +1

              @brendanm: Sweet, I've just been down to the Lambo shop and picked out a nice colour!

  • Godric on 16/01/2020 - 18:41
    +2

    Watches

  • vegemite2008 on 16/01/2020 - 18:53
    +1

    Read https://barefootinvestor.com/

    If they can, pour it into their super.

    Hard for nonprofessionals to beat the super return (6-10% annually).

    Another good thing is, don't have to worry about being stressed.

  • Ocker on 16/01/2020 - 18:55

    All depends on what your parents are looking for - income or capital growth, and their time horizon. Once that is decided you can then you can start to look at the various investment options.

  • armdrags on 16/01/2020 - 18:56
    +1

    Peanut butter and jelly

  • profar on 16/01/2020 - 19:08

    Anyone know anything about a piggery ?

    With African swine fever virus effected large numbers around the world and Australia being free of this there is going to be a great 5-10 yrs in this industry . The bushfires will also add fuel to the prices .

  • [Deactivated] on 16/01/2020 - 19:44
    +2

    Just tell them to spend it and enjoy whats left of their short lives.

    If not, cant go wrong with crypto and VHY-Asx

  • [Deactivated] on 16/01/2020 - 20:17
    +4

    Hello my friend, I am wealthy business man from DRC and I like make you Rich! I have good deal to make you 10x your money in 3 months with many success customers. I turn your cash to diamonds and you retire early happy. Please message me yvour bank details.

    Yours, Rich DRC investor

    • nurbsenvi on 18/01/2020 - 03:08

      This is not da wae

  • gear50 on 16/01/2020 - 20:24

    Go find a good investment manager and pay them their fee. Advising people like your parents is their job. Just make sure they're not one of the dodgy ones that get a commission from hawking products.

  • whooah1979 on 16/01/2020 - 21:19
    +3

    Lockheed Martin,

    Your parents can count their money every time a drone kills a terrorist.

  • elgrande on 16/01/2020 - 21:20

    Netscape

  • Cheap Steve on 16/01/2020 - 22:09
    +4

    Your chosen investments are just awful.

    A dart a monkey and a dartboard would do much better.

  • Blue Cat on 16/01/2020 - 22:10
    +1

    Let them spend it, enjoy life, travel the world etc.

  • [Deactivated] on 17/01/2020 - 02:00
    +1

    Why would you sell an investment to keep cash in the bank. Troll.

  • Tasmaniac on 17/01/2020 - 07:27

    I think options trading is a great idea, how hard can it be ?, break out the black scholes formula and go to town.

  • wannagrababargain on 17/01/2020 - 10:55

    You admit you are completely ignorant so it would be worth talking to a financial advisor. They will likely start out with asking you/parents what are their financial goals? Then for investments you base that around goals and risk appetite. The actual choice of investment vehicle is literally the last thing you decide after going through your goals, working out current/projected expenses, appetite risk, investment horizon, tax arrangements, and for 70 year olds possibly a bit of estate planning mixed in.

    • nurbsenvi on 17/01/2020 - 14:25

      Well my parents put everything in one basket which is real estate

      I was a bit concerned as they are not liquidable

  • profar on 17/01/2020 - 11:53

    Some people have the goal of being the richest in the graveyard and we all know who benefits :)

    • nurbsenvi on 17/01/2020 - 21:25

      Rubbing my hands here mate salivating like a hungry vulture

  • ALesha77 on 17/01/2020 - 19:30

    Just my 2 cents:
    I think that almost every widely used investment vehicle is pretty much overvalued now.

    You can go with government bonds like short-term US Treasury Bonds for the safest way of preserving the capital but the yields are low.
    Country wide ETFs are overstretched and will not fully hedge against a downturn (S&P trades at 18 times forward earning and the only reasonable way is down)
    All Dividend aristocrats have been bought and bought again in anticipation of downturn
    Same with Utilities, staples and Consumer goods - the usual hedge bets
    With the puts you need to be really good at guessing the timing - something that many bright heads have failed at (many reputable stockpickers were predicting a downturn at the end of 2019). Otherwise your options will expire worthless.

    You might catch some good returns trading some extreme points like for instance shorting Tesla.
    A slightly less crazy idea - to buy Marijuana ETFs - the industry has been beaten down to the ground on a stock-market in the past year but still remains a valid concept and a potentially profitable business. I have bought some HMMJ when they were at c8.15.

    Handpicked stock is good idea if you have the talent and blessed with enough luck. I am long WORK (Slack) since the bottom at around $20 and they should have already shot to the stars (at least in my script of the universe) but the stock is still range-bound.

    Good luck.

    • nurbsenvi on 17/01/2020 - 21:22

      Thank you for the reply

      Someone said every investment vehicle went up by 20% except fiat currency

  • vegemite2008 on 17/01/2020 - 20:21

    I have been trading shares for more than 20 years.

    Usually have 10-12 different shares (companies) in my portfolio.

    Once you get the avg return, it is hard to beat the professional superannuation returns.

    Some of my shares had returns of 100-200% but also been down (down down down) on some shares.

    Hey, it is the average return that counts.

    Australian super is my preferred choice. Low fees. Do your own research.

    That's my honest opinion. With tax advantages it is a simple choice.

    https://www.canstar.com.au/compare/super-funds/?age=60%2B&su…

    • nurbsenvi on 17/01/2020 - 21:21

      Thank you.

    • ALesha77 on 17/01/2020 - 21:24
      +1

      With all due respect to your trading experience, I would not be recommending the passive all-long around blue-chip investment means that super-funds are known for. At least not in this part of the cycle. It is due to these behemoths and other straight-forward money managers that liquidity still hits the over-stretched equity markets that are long due for a correction. And they will be buying all they way while the markets are going down - not that much of a deal if you have to put 9.5% of your fortnight paycheck somewhere anyhow but a it's bit different if you invest 100K in one chunk and watch it loosing 25-30% after a modest 6% gain.

      • profar on 17/01/2020 - 21:31

        Yes it a bad time to invest in shares after a 25% return year the next year 19 out of 26 were up :)

        All the billions of government tax subsidises are intact as well thanks to the good people's voting .

      • nurbsenvi on 17/01/2020 - 21:48
        +1

        So should I wait until market corrects(crashes)?
        Where is the best place to hedge against corrections now? Gold and Silver?

        Obviously with no guarantee from you so feel free to tell us what you would do in a market now if you don't mind
        Thank you.

        • ALesha77 on 18/01/2020 - 00:53
          +1

          That's a trillion dollar question :) No jokes, it is.
          The funniest part of a current situation is that almost everything that was looking like a bargain have been bought and bought again. I have not seen in past that junk bonds and government bonds, growth and dividend stock as well as recession hedges, together with gold an oil - all these have been up from their recent lows and all in the up-trend.

          i am personally sitting on a pile of cash (like your folks) and simply don't see any long-term investment bargains. I am hunting now in the health industry - biotech and genom-research labs as these bastards have been beaten down recently but can still pull out a success story once in a while - however, these are mostly speculative trades. And marijuana ETFs that I have suggested above is also a thing that I will be willing to drop should it not meet my expectations in the next couple of months. Also I have some industry, staples and media stocks on my watchlist but have not pulled the trigger yet.

          Having said that, I do not think there is too much of a good time left for equities. There were a few times in the past the valuations were climbing that fast that high and for no obvious reason - in 1999 for techs and NASDAQ and in 2007.

          A good recession hedge would be to buy GOLD ETF with lowest fee (GLD for instance) but timing here is a big question as Gold will be grinding lower while the equities are making new highs. My personal strategy - I am monitoring the futures daily (ES, NQ, FESX, GC, CL, 6A, 6J) hoping to catch the right time to go long in GC and 6J and short the equities.

          • nurbsenvi on 18/01/2020 - 03:06

            @ALesha77: Much appreciate your time for the lengthy write up.

            As I get older I have learnt to appreciate time and other people's time even more so.

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