Replies to post #11388 on A.I.M. Users Bulletin Board (AIMUSERS)

[The Grabber]

Hi Scott:

If One were to suddenly have $100,000 to invest, how would you handle it today? One stock? mutual funds? wait for a buy?

Well I certainly would not throw it at any single fund or stock. That's a big roll of the dice.

One alternative might be to build an investment pyramid based on a 40, 30 , 20 and 10% set of levels which respectively move from the most conservative high quality (40%) to the speculative (10%). All of which would be a diversified as possible.

I'm sure you'll get lots of responses besides mine. Good! It's been a little quiet the last few days.

Regards, Steve

[OldAIMGuy]

Hi Scott, There's plenty of full service brokers out there who would be happy to help you with such a problem!!

You should probably start with a goal. If it's taxable $$$ you might pick one direction compared to a retirement account. If this is the only money you have to invest, then you'd probably want to structure it one way. If it represents only 10% of your current Equity Warehouse, then you would have more options.

So, I guess what I'm saying is that the $100K should be integrated into your existing financial plan so that the overall plan isn't messed up.

About a year ago I rolled my IRA over to start a new strategy with the funds. It was worth about the same as your hypothetical windfall. I invested it in a group of six Exchange Traded Funds with 60% of the total and the remaining 40% went to a high yield long term bond fund. All are set up as separate AIM accounts. The bond fund is there to create new cash for future additions. The six ETFs I chose based upon my feelings toward long term macroeconomic trends. You can read more about it at:
http://www.aim-users.com/etfunds.htm

Hope this helps,
Tom

[Toofuzzy]

Hi Scott Re what to buy

As far as I am concerned, you have the absolute minimum to buy individual stocks.

AIMing takes care of the MARKET risks (is the market up or down, should I sell some now or should I wait for it to go higher), but you still have the individual company risks (goes broke, deep diver, fraud, etc)

For a smaller account than yours I would say start with a mutual fund because there are no TRADING costs to add additional money but you have enough to start with a few EXCHANGE TRADED FUNDS.

You can diversify in ETF's either by industry or by style (large, small, value , growth, forien, reit, bond).
If you diversifying by style, a small cap and value tilt is SUPPOSED to be better.

For investing by style you may end up with
IVV s+p 500
IVE s+p 500 value
IWM Russel 2000
IWN Russel 2000 value
EFA Morgan Stanly Europe Asia Far East
ICF REITS (real estate)
SHY a short term bond fund or a MM fund

I would wait to invest in a long term bond fund as interest rates are at a 40 year low.

Heck if you are really lazy or want to be you could rebalance the above ONCE PER YEAR instead of AIMing them monthly.

Tom's post covered investing by industry and those are some good picks if you choose to go that way.

Pete's advise to do 10 accounts woulod create accounts that are too small in my opinion unless you LD- AIMed them. The minimum trade is likely to be 5% of $6,700 or $335. Unless invested in a mutual fund the trading costs would be a rather high %. My own feeling is that a minimum AIM account size should be $10,000 in STOCK to start or maybe $15,000 total (stock and cash).

Check out the Exchange Traded Fund Board and
www.Ishares.com (I like their ETF's best)

Toofuzzy

[jibes]

Scott.

If quite young I would AIM a batch of low priced stocks.
If older I would AIM a batch of low priced stocks.
If very old I would go out and have a good time!

Jibes
TrendSeekers at:
http://homepage.mac.com/bondiblueone/trendseeker/index.html