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Richard
Richard, Attorney
Category: Estate Law
Satisfied Customers: 54020
Experience:  29 years of experience practicing law, including tax and estate planning.
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I have $50,000. to invest & no nothing about stocks, bonds,

Customer Question

I have $50,000. to invest & no nothing about stocks, bonds, annuities. Can you tell me what is best to invest in, I am 69 yrs. old & live off social security.
Thank you
Submitted: 9 months ago.
Category: Estate Law
Expert:  Richard replied 9 months ago.

Hi Jeanie. My name is ***** ***** I look forward to helping you.

Given your age and the fact that you are living off social security, the most important thing for you is protection of your principal rather than taking a lot of risk to increase your rate of return on the principal. So, you do want to weight your portfolio toward bonds and income producing stocks...i.e., those with solid history of dividends. Although you want to weight your portfolio in that direction, it would be good to have some exposure to the stock market. Because of the amount you have available and your inexperience in investing, you would not want to invest in individual stocks because you can't properly diversity. Rather, I would suggest you invest your $50,000 in no-load index mutual funds that track certain groups of stock. Vanguard, Fidelity, etc. have no load, very low management fee, indexed mutual funds. I would recommend about 50% in bond funds, 25% in an income-stock indexed fund, and 15% in a S&P 500 index fund; and 10% in an international fund. If you call either Vanguard or Fidelity, they can direct you into the applicable funds at no additional cost to you.

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

Expert:  Richard replied 9 months ago.

Given your age and the fact that you are living off social security, the most important thing for you is protection of your principal rather than taking a lot of risk to increase your rate of return on the principal. So, you do want to weight your portfolio toward bonds and income producing stocks...i.e., those with solid history of dividends. Although you want to weight your portfolio in that direction, it would be good to have some exposure to the stock market. Because of the amount you have available and your inexperience in investing, you would not want to invest in individual stocks because you can't properly diversity. Rather, I would suggest you invest your $50,000 in no-load index mutual funds that track certain groups of stock. Vanguard, Fidelity, etc. have no load, very low management fee, indexed mutual funds. I would recommend about 50% in bond funds, 25% in an income-stock indexed fund, and 15% in a S&P 500 index fund; and 10% in an international fund. If you call either Vanguard or Fidelity, they can direct you into the applicable funds at no additional cost to you.

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!