Help me take ownership over my inheritance.
September 9, 2011 7:22 PM Subscribe
I am a noob when it comes to money matters, and need advice on how to take ownership of my inheritance.
About a decade ago, I received an decently sized inheritance, think around ~$100k. It's gone up and down, paid for a few major items, and is currently hovering around half its initial value.
The only way I interface with this money is through a Merrill Lynch financial advisor. He lives about 8 hours away, and because I despise talking on the phone (and he doesn't do business over e-mail) I rarely am in touch with him. I know right now my money is sitting in a decent performing fund, and it's been sitting there a while. When I initially got it, it'd been in a well performing actively managed fund. This is all I know. The only time I ever really talk with him is when I want to pull out money, which is maybe once a year.
I'm so out of touch that in order to write this post, I had to go into my online account to even see what kind of fees I'm being charged. It looks like I'm only being charged $125 a year, and additionally when money is moved around. Right now, my money is just sitting in one spot, so it's just the $125 a year.
My partner and I also just had a child, so we are thinking more about getting ourselves in better financial shape. We need to start a 529 for him, open Roth IRAs, etc. And I'd like to start actually contributing to my account, rather than just taking money away from it.
My first idea was to just find a Merrill Lynch advisor locally. I assume I can switch up who I deal with. This may help, because I vastly prefer to face-to-face meetings than phone calls. But then I didn't know - do I even really need a financial advisor? And should I stick with Merrill Lynch, or find someone new? If I change from Merrill Lynch, how would I even go about doing that? Is Merrill Lynch like a bank, where I'd have to actively take my money out of it? Or is it like an interface to another entity where I can just switch out to a new interface? Or can I have no middle man at all, and just deal with the fund myself?
When I have something like this, I like to research and know what I'm doing from first principles, but here, I was just given this account, and this advisor attached to it, and I really have no clue how it works. I think that's why I've avoided dealing with it for so long. Thanks for any help you can give, feel free to talk to me like I'm five. I'm completely lost.
About a decade ago, I received an decently sized inheritance, think around ~$100k. It's gone up and down, paid for a few major items, and is currently hovering around half its initial value.
The only way I interface with this money is through a Merrill Lynch financial advisor. He lives about 8 hours away, and because I despise talking on the phone (and he doesn't do business over e-mail) I rarely am in touch with him. I know right now my money is sitting in a decent performing fund, and it's been sitting there a while. When I initially got it, it'd been in a well performing actively managed fund. This is all I know. The only time I ever really talk with him is when I want to pull out money, which is maybe once a year.
I'm so out of touch that in order to write this post, I had to go into my online account to even see what kind of fees I'm being charged. It looks like I'm only being charged $125 a year, and additionally when money is moved around. Right now, my money is just sitting in one spot, so it's just the $125 a year.
My partner and I also just had a child, so we are thinking more about getting ourselves in better financial shape. We need to start a 529 for him, open Roth IRAs, etc. And I'd like to start actually contributing to my account, rather than just taking money away from it.
My first idea was to just find a Merrill Lynch advisor locally. I assume I can switch up who I deal with. This may help, because I vastly prefer to face-to-face meetings than phone calls. But then I didn't know - do I even really need a financial advisor? And should I stick with Merrill Lynch, or find someone new? If I change from Merrill Lynch, how would I even go about doing that? Is Merrill Lynch like a bank, where I'd have to actively take my money out of it? Or is it like an interface to another entity where I can just switch out to a new interface? Or can I have no middle man at all, and just deal with the fund myself?
When I have something like this, I like to research and know what I'm doing from first principles, but here, I was just given this account, and this advisor attached to it, and I really have no clue how it works. I think that's why I've avoided dealing with it for so long. Thanks for any help you can give, feel free to talk to me like I'm five. I'm completely lost.
Gird yourself for a phone call, and tell your current Merrill Lynch guy what the deal is. Get a guy near where you are. I don't really know performance between one managed fund or another, but I do know that lots of people would be happy to work with 50K. Don't go with a flat-fee; that gives them no incentive to do anything. Instead, find someone who will make a profit when you make a profit.
Once that's in place, set up a meeting with your new investment advisor. Tell them what your goals are, and ask them how it would be best to proceed.
posted by Gilbert at 7:38 PM on September 9, 2011
Once that's in place, set up a meeting with your new investment advisor. Tell them what your goals are, and ask them how it would be best to proceed.
posted by Gilbert at 7:38 PM on September 9, 2011
Sorry, I initially missed the part where you were actually *spending* the money, so take my remark about its very poor performance with a grain of salt!
posted by treehorn+bunny at 7:39 PM on September 9, 2011
posted by treehorn+bunny at 7:39 PM on September 9, 2011
I am posting again to disagree with Gilbert. Do NOT go with someone who makes a profit when you make a profit - flat fee is much better. I won't go into a rant about why but search Get Rich Slowly and you will see what I mean.
posted by treehorn+bunny at 7:40 PM on September 9, 2011 [3 favorites]
posted by treehorn+bunny at 7:40 PM on September 9, 2011 [3 favorites]
Response by poster: That's right treehorn+bunny, one of the few things I have done has been to make sure that the money is actually growing. It's performed well given the market. And yes, it's paid for things like a house, a car, etc.
posted by Tooty McTootsalot at 7:42 PM on September 9, 2011
posted by Tooty McTootsalot at 7:42 PM on September 9, 2011
Best answer: You have a right to expect that your Merrill Lynch advisor work with you on your terms. If you want to use email, either he communicates with you by email, or you get another advisor. He's a service provider, he should serve; what a jerk. When I was a boy, I received a court settlement that was, at the court's direction, managed for me at ML. I rarely saw my advisor and hardly ever heard from him. I asked for a new person to manage my money when I became older, and he was OK--but then he moved a few hours away, and I never saw him again.
I moved my money to Schwab.
Moving accounts between brokers will need to be initiated by the transferee broker (e.g., Schwab). It can take a little time (I think Merrill drags its metaphorical feet). The ML broker isn't a "front end" on an account of yours somewhere--all of your securities are held in "street name" in a master ML account at something called DTC. Those securities need to be transferred to the master account of your new broker (Schwab, etc.). However, with some independent advisors, you might just have an account with a Schwab, you give them an authorization to trade for you.
Or you could just get a financial advisor/planner that gives you recommendations and you execute the trades yourself.
I agree with the posters above--you probably could use someone's help now, but you may find that you just want to park and hold your money in some sort of diversified account and not touch it for 20 years. There are a number of AskMe threads on picking a good advisor.
This is not investment advice, and I am not your investment advisor. Good luck!
posted by Admiral Haddock at 7:59 PM on September 9, 2011
I moved my money to Schwab.
Moving accounts between brokers will need to be initiated by the transferee broker (e.g., Schwab). It can take a little time (I think Merrill drags its metaphorical feet). The ML broker isn't a "front end" on an account of yours somewhere--all of your securities are held in "street name" in a master ML account at something called DTC. Those securities need to be transferred to the master account of your new broker (Schwab, etc.). However, with some independent advisors, you might just have an account with a Schwab, you give them an authorization to trade for you.
Or you could just get a financial advisor/planner that gives you recommendations and you execute the trades yourself.
I agree with the posters above--you probably could use someone's help now, but you may find that you just want to park and hold your money in some sort of diversified account and not touch it for 20 years. There are a number of AskMe threads on picking a good advisor.
This is not investment advice, and I am not your investment advisor. Good luck!
posted by Admiral Haddock at 7:59 PM on September 9, 2011
1) 100k doesn't buy what it used to. Use it as a downpayment on a house, if you can afford one and don't already have one. Otherwise, roll it into a Roth.
2) ML now belongs to BoA. Jus' Sayin'.
3) If you need to use the phone to direct your broker, you need a new broker. See point #2.
4) You already have this money post-tax. Skip the scammy college funds and leave your options open.
5) I seriously don't mean any of this sarcastically (including this sentence).
posted by pla at 8:11 PM on September 9, 2011
2) ML now belongs to BoA. Jus' Sayin'.
3) If you need to use the phone to direct your broker, you need a new broker. See point #2.
4) You already have this money post-tax. Skip the scammy college funds and leave your options open.
5) I seriously don't mean any of this sarcastically (including this sentence).
posted by pla at 8:11 PM on September 9, 2011
6) You actually PAY them to hold on to 50k for you? Seriously, move to a real broker, pick half a dozen sector-specific dividend ETFs, and forget about it for 20 years.
posted by pla at 8:13 PM on September 9, 2011 [1 favorite]
posted by pla at 8:13 PM on September 9, 2011 [1 favorite]
I came to repeat "get a new broker". You want a financial advisor. You admit you don't know about money, and you're asking mefi for advice. You can afford (and can definitely use) a professional who knows about these things. One of the criteria you should have when it comes to choosing which professional to use is whether your communication styles line up.
Think about that. It doesn't much matter what sort of relationship you're talking about. You need to be able to communicate.
posted by cardioid at 8:24 PM on September 9, 2011 [1 favorite]
Think about that. It doesn't much matter what sort of relationship you're talking about. You need to be able to communicate.
posted by cardioid at 8:24 PM on September 9, 2011 [1 favorite]
Don't hate o me for saying this but what about gold? I don't mean he Glenn Beck B.S. but rather a reputable house where you actually get the gold (not a certificate) for 4 to 5 % over market cost and you keep it in a safety deposit box. Looking at the charts I see gold had quadrupled since '01 which is a better performance than any stock or fund that I am aware of. I am thinking of something like this. I am also curious what others think of this?
posted by Poet_Lariat at 9:24 PM on September 9, 2011
posted by Poet_Lariat at 9:24 PM on September 9, 2011
Also look into exploring holding it in a basket of currencies.
posted by infini at 9:52 PM on September 9, 2011
posted by infini at 9:52 PM on September 9, 2011
First thing I would do is call your broker and tell him, I'm closing my account, please send me a check. Even if he's the best at what he does, you don't need a financial planner for $50k, you don't need to be paying someone $125 to hold onto your money, and you sound like someone who wants to be in control of his own money. You should be able to get a check in the mail within a few days, which you can deposit into your savings account.
While you're waiting, I would get a Personal Finance for Dummies book or somesuch, and read it cover to cover.
You and your partner will want to look at your overall financial situation. First make sure you have an emergency fund to cover at least 6 months of expenses. Beyond that, if you don't have any retirement accounts (401k, IRA), it's a good time to start one. This is post-tax money, so a Roth IRA is your main option. Any of the low-fee brokerages like Fidelity or Scottrade can handle this for you. (Someone above mentioned rolling over the money into a Roth, but don't be confused.. "rollover" is a term that applies to pre-tax accounts like 401k's and Traditional IRA's.)
There's a cap on how much you can put into a Roth each year, so you'll probably have some money left over. This can go into a regular (non-tax-advantaged) brokerage account, at the same broker you use for your IRA.
Now you'll want to figure out an asset allocation for your overall investment portfolio (looking at your retirement accounts plus your regular brokerage account as one big bucket). A typical rule of thumb is your age in bonds, so if you're 30, 30% in bonds, and 70% in stocks. Don't pick individual stocks, you want index funds; you can't beat the market, so invest in the whole market. VTIV is a total market (US + foreign) stock fund, GTIP is a total market bond fund. You don't need any more than that to diversify.
Stocks are tax-favorable investments (dividend and capital gain taxes are low), so they should preferably go into your non-tax-advantaged account, while bonds preferably go to your IRA.
Once or twice a year, you'll want to reallocate your investments. If stocks have outperformed bonds, then stocks might have grown to 40% of your portfolio, so you'll need to sell some of them and buy more bonds (or, preferably, add more money to your portfolio, buying more bonds than stocks). "Buy low, sell high" sounds like a truism, but this is how you do it.
All this is assuming you have a long-term investing horizon. If you have big expenses planned within the next 10 years, like buying a house or sending a kid to college, you'll want a higher allocation to more conservative investments (bonds).
Forget about gold and foreign currencies, those are for speculators, aka gamblers.
posted by Sxyzzx at 10:43 PM on September 9, 2011
While you're waiting, I would get a Personal Finance for Dummies book or somesuch, and read it cover to cover.
You and your partner will want to look at your overall financial situation. First make sure you have an emergency fund to cover at least 6 months of expenses. Beyond that, if you don't have any retirement accounts (401k, IRA), it's a good time to start one. This is post-tax money, so a Roth IRA is your main option. Any of the low-fee brokerages like Fidelity or Scottrade can handle this for you. (Someone above mentioned rolling over the money into a Roth, but don't be confused.. "rollover" is a term that applies to pre-tax accounts like 401k's and Traditional IRA's.)
There's a cap on how much you can put into a Roth each year, so you'll probably have some money left over. This can go into a regular (non-tax-advantaged) brokerage account, at the same broker you use for your IRA.
Now you'll want to figure out an asset allocation for your overall investment portfolio (looking at your retirement accounts plus your regular brokerage account as one big bucket). A typical rule of thumb is your age in bonds, so if you're 30, 30% in bonds, and 70% in stocks. Don't pick individual stocks, you want index funds; you can't beat the market, so invest in the whole market. VTIV is a total market (US + foreign) stock fund, GTIP is a total market bond fund. You don't need any more than that to diversify.
Stocks are tax-favorable investments (dividend and capital gain taxes are low), so they should preferably go into your non-tax-advantaged account, while bonds preferably go to your IRA.
Once or twice a year, you'll want to reallocate your investments. If stocks have outperformed bonds, then stocks might have grown to 40% of your portfolio, so you'll need to sell some of them and buy more bonds (or, preferably, add more money to your portfolio, buying more bonds than stocks). "Buy low, sell high" sounds like a truism, but this is how you do it.
All this is assuming you have a long-term investing horizon. If you have big expenses planned within the next 10 years, like buying a house or sending a kid to college, you'll want a higher allocation to more conservative investments (bonds).
Forget about gold and foreign currencies, those are for speculators, aka gamblers.
posted by Sxyzzx at 10:43 PM on September 9, 2011
Perhaps get yourself an independent consultation first with someone who charges hourly, and can translate your personal requirements over the short, mid and long term into specific investment vehicles.
However, you might want to think about keeping one element of the existing arrangement: the relative difficulty of tinkering with it. $50k is a rounding error for a money management company, but it's a decent chunk of money for you, and having it sitting in a metaphorical cupboard bringing in decentish returns may work better for you than having it on a metaphorical shelf to look at every day.
posted by holgate at 10:56 PM on September 9, 2011
However, you might want to think about keeping one element of the existing arrangement: the relative difficulty of tinkering with it. $50k is a rounding error for a money management company, but it's a decent chunk of money for you, and having it sitting in a metaphorical cupboard bringing in decentish returns may work better for you than having it on a metaphorical shelf to look at every day.
posted by holgate at 10:56 PM on September 9, 2011
Unless you're already maxing out your IRAs (or will be budgeting to do so), one idea might be to use that money for Roth IRAs -- $5K/year for you, or $10K/year for you and your partner. But consider the benefits of the current account structure first. (Is it protected in a bankruptcy or divorce? Does it come with tax benefits? The type of account is unclear from your post, although I'm guessing it's some sort of trust rather than an inherited IRA. Inherited IRAs have some strings about disbursements, mostly in the form of tax penalties.)
I'd suggest starting with The Bogelhead's Guide To Investment, which is a readable, reliable book that should get you up to speed on different types of investments, the types of accounts you use to make investments, and how to figure out where to go from there. (If you could only read one book, that's the one I'd recommend.) Once you're up to speed, you can work from there.
posted by pie ninja at 6:18 AM on September 10, 2011
I'd suggest starting with The Bogelhead's Guide To Investment, which is a readable, reliable book that should get you up to speed on different types of investments, the types of accounts you use to make investments, and how to figure out where to go from there. (If you could only read one book, that's the one I'd recommend.) Once you're up to speed, you can work from there.
posted by pie ninja at 6:18 AM on September 10, 2011
Sxyzzx : Someone above mentioned rolling over the money into a Roth, but don't be confused.. "rollover" is a term that applies to pre-tax accounts like 401k's and Traditional IRA's.
Sorry, good catch, I should not have used that word. I just meant it in the sense of "keep the account in a post-tax, tax-sheltered account", but as you point out, she still couldn't do a Roth because of annual contribution limits.
posted by pla at 6:35 AM on September 10, 2011
Sorry, good catch, I should not have used that word. I just meant it in the sense of "keep the account in a post-tax, tax-sheltered account", but as you point out, she still couldn't do a Roth because of annual contribution limits.
posted by pla at 6:35 AM on September 10, 2011
The following charts may interest you:
This chart (expand it out to the zoom level of "all") shows that you had invested 50,000 in an average preforming fund in the the stock market 20 year ago (in 1991) you would have 98,000 today. If you had invested it 10 years ago in 2001 , you would have all of 54,000 today and had you invested it 5 years ago in 2006 you would have all of 48,000 today.
This chart shows that if you had bought 50,000 of actual gold bullion in 1991 you would have 246,000 today. If you had invested it 10 years ago in 2001 you would have 330,000 today and had you invested in it 5 years ago in 2006 you would have 142,000 today.
I don't think it takes a specialized financial analyst to look at 20 year performance charts of a commodity such as gold or a game such as the stock market and make the appropriate decisions. Remember all those people who put their money into sensible stock market 401K plans and got half (or more ) of their retirement completely wiped out i the crash of 2008? I have a friend who has to work another 8 years instead of retiring next year because of that. Look at that stock market chart. When the Repubs crash the economy (and they will) what do you think will happen to all your stock market funds? Sure, gold will crash as well but the charts show that over a long period (10 to 20 years) it recovers and out preforms the market each and every time.
Things like Roth IRAs and 401K plans are worthless to you because both those things are tax sheltering plans for that give you tax benefits later on in life. You DO NOT NEED tax sheltering plans because you are paying ZERO taxes on an estate. Putting your money into something like a Roth not only unnecessarily ties up your capital and gives you zero tax benefits but possibly (?) exposes you to penalties should you take your money out of such plans. You do not need to tax shelter anything because you are paying zero taxes on that estate (save from possibly a small one time state estate tax ). Banks are paying 1% interest or less on your 50K which is worthless. 401K plans and various mutual funds are paying perhaps 2 to 5 (if you're lucky) and you will lose all of that and much more in the next big crash in a year or two.
Will the Treasury Dept actually have funding to pay back everyone when BOA crashes and burns? Or will they have to wait a few years ... or pay everyone back only a percentage? They are supposed to have solid funding but then again the Fed refuses an independent audit. I come from a time when Social Security and Medicare were immutable and had solid funding. Nothing's certain.
Good luck there.... I am currently making similar decisions.
posted by Poet_Lariat at 12:09 PM on September 10, 2011
This chart (expand it out to the zoom level of "all") shows that you had invested 50,000 in an average preforming fund in the the stock market 20 year ago (in 1991) you would have 98,000 today. If you had invested it 10 years ago in 2001 , you would have all of 54,000 today and had you invested it 5 years ago in 2006 you would have all of 48,000 today.
This chart shows that if you had bought 50,000 of actual gold bullion in 1991 you would have 246,000 today. If you had invested it 10 years ago in 2001 you would have 330,000 today and had you invested in it 5 years ago in 2006 you would have 142,000 today.
I don't think it takes a specialized financial analyst to look at 20 year performance charts of a commodity such as gold or a game such as the stock market and make the appropriate decisions. Remember all those people who put their money into sensible stock market 401K plans and got half (or more ) of their retirement completely wiped out i the crash of 2008? I have a friend who has to work another 8 years instead of retiring next year because of that. Look at that stock market chart. When the Repubs crash the economy (and they will) what do you think will happen to all your stock market funds? Sure, gold will crash as well but the charts show that over a long period (10 to 20 years) it recovers and out preforms the market each and every time.
Things like Roth IRAs and 401K plans are worthless to you because both those things are tax sheltering plans for that give you tax benefits later on in life. You DO NOT NEED tax sheltering plans because you are paying ZERO taxes on an estate. Putting your money into something like a Roth not only unnecessarily ties up your capital and gives you zero tax benefits but possibly (?) exposes you to penalties should you take your money out of such plans. You do not need to tax shelter anything because you are paying zero taxes on that estate (save from possibly a small one time state estate tax ). Banks are paying 1% interest or less on your 50K which is worthless. 401K plans and various mutual funds are paying perhaps 2 to 5 (if you're lucky) and you will lose all of that and much more in the next big crash in a year or two.
Will the Treasury Dept actually have funding to pay back everyone when BOA crashes and burns? Or will they have to wait a few years ... or pay everyone back only a percentage? They are supposed to have solid funding but then again the Fed refuses an independent audit. I come from a time when Social Security and Medicare were immutable and had solid funding. Nothing's certain.
Good luck there.... I am currently making similar decisions.
posted by Poet_Lariat at 12:09 PM on September 10, 2011
Poet_Lariat : Things like Roth IRAs and 401K plans are worthless to you because both those things are tax sheltering plans for that give you tax benefits later on in life. You DO NOT NEED tax sheltering plans because you are paying ZERO taxes on an estate.
I won't argue with you about gold, because if you believe it can somehow keep growing at a rate far exceeding the world economy in general, hey, invest where you want.
I have to correct you regarding a Roth IRA, however. Correct, Tooty doesn't need to worry about taxes on the inherited money itself. At this point, she can treat it exactly the same as having a pile of hundreds under the mattress, all existing tax implications have already settled.
Anyone investing post-tax dollars does need to worry about paying capital gains tax on their investments, however. If someone doesn't need the liquid cash at this point in their lives, they would do much better to quietly let their investments grow for retirement in such a way that they never need to pay taxes on the gains... ie, a Roth IRA. Unfortunately, yearly contribution limits make it rather annoying to dump a large lump sum into one (as Sxyzzx pointed out), but if planned carefully, Tooty could open a traditional brokerage account with a firm that also handles IRA (most of them do), and shift $5k per year into the Roth.
One final point, you can invest in gold - Whether you want to actually physically hold it, or just invest in precious metals securities - In an IRA. The IRA itself exists solely as a vehicle to optimize the tax implications for you, depending on when you expect to need the money available.
posted by pla at 12:31 PM on September 10, 2011
I won't argue with you about gold, because if you believe it can somehow keep growing at a rate far exceeding the world economy in general, hey, invest where you want.
I have to correct you regarding a Roth IRA, however. Correct, Tooty doesn't need to worry about taxes on the inherited money itself. At this point, she can treat it exactly the same as having a pile of hundreds under the mattress, all existing tax implications have already settled.
Anyone investing post-tax dollars does need to worry about paying capital gains tax on their investments, however. If someone doesn't need the liquid cash at this point in their lives, they would do much better to quietly let their investments grow for retirement in such a way that they never need to pay taxes on the gains... ie, a Roth IRA. Unfortunately, yearly contribution limits make it rather annoying to dump a large lump sum into one (as Sxyzzx pointed out), but if planned carefully, Tooty could open a traditional brokerage account with a firm that also handles IRA (most of them do), and shift $5k per year into the Roth.
One final point, you can invest in gold - Whether you want to actually physically hold it, or just invest in precious metals securities - In an IRA. The IRA itself exists solely as a vehicle to optimize the tax implications for you, depending on when you expect to need the money available.
posted by pla at 12:31 PM on September 10, 2011
Sorry, on reloading, I see that MoonOrb covered most of my point already. :I
posted by pla at 12:33 PM on September 10, 2011
posted by pla at 12:33 PM on September 10, 2011
You do pay taxes on inheirited money.
No, you do not. You do not pay Federal taxes on any estate worth less than , I believe, 5 million. Zero None. In many states you may have to pay a one-time small state tax.
You are taking about something entirely different, MoonOrb. You are talking about capital gains on money the estate makes. That is apples and oranges. But when it comes to the estate itself you pay ZERO federal taxes on it so putting money into tax sheltering plans like a Roth is useless - absolutely useless - because there are no federal taxes to pay on an estate valued at 50K.
ANd by the way - apparently if the estate is still in probate and it is earning money via CDs then that money - when it comes out of probate is also TAX FREE from federal taxes (if it's below the 5 million limit) . I know this with an absolute certainty born of very recent experience.
posted by Poet_Lariat at 12:36 PM on September 10, 2011
No, you do not. You do not pay Federal taxes on any estate worth less than , I believe, 5 million. Zero None. In many states you may have to pay a one-time small state tax.
You are taking about something entirely different, MoonOrb. You are talking about capital gains on money the estate makes. That is apples and oranges. But when it comes to the estate itself you pay ZERO federal taxes on it so putting money into tax sheltering plans like a Roth is useless - absolutely useless - because there are no federal taxes to pay on an estate valued at 50K.
ANd by the way - apparently if the estate is still in probate and it is earning money via CDs then that money - when it comes out of probate is also TAX FREE from federal taxes (if it's below the 5 million limit) . I know this with an absolute certainty born of very recent experience.
posted by Poet_Lariat at 12:36 PM on September 10, 2011
I won't argue with you about gold, because if you believe it can somehow keep growing at a rate far exceeding the world economy in general, hey, invest where you want.
Good point , partially. I expect gold to crash . It can not keep rising exponentially the way that it is doing now. It's doing that because investors are losing faith in the economy and the market, the dollar and Euro and putting their money in a commodity. Probably the best time to buy would be when the price does crash within a year or two. If you buy gold now it will likely be worth a lot less in a year or two - but the charts show that it will likely be worth a LOT more in 10 years - or 20.
However the 20 year charts are right there in front of your eyes. Even if you discount the last 2 year rise in gold prices (and you should) it out preforms the market by a factor of 2 or 3 over a 20 year period. This isn't gambling - it's mathematics. The figure speak for themselves. Gold is a commodity - one in which the charts show has consistently risen in considerable value in any given 10 year period. The stock market (and it's variations like mutual finds) is not a commodity - it is a game and if you had anything invested in an IRA or pension plan prior to 2008 then you should understand what kind of a game it is.
posted by Poet_Lariat at 12:46 PM on September 10, 2011
Good point , partially. I expect gold to crash . It can not keep rising exponentially the way that it is doing now. It's doing that because investors are losing faith in the economy and the market, the dollar and Euro and putting their money in a commodity. Probably the best time to buy would be when the price does crash within a year or two. If you buy gold now it will likely be worth a lot less in a year or two - but the charts show that it will likely be worth a LOT more in 10 years - or 20.
However the 20 year charts are right there in front of your eyes. Even if you discount the last 2 year rise in gold prices (and you should) it out preforms the market by a factor of 2 or 3 over a 20 year period. This isn't gambling - it's mathematics. The figure speak for themselves. Gold is a commodity - one in which the charts show has consistently risen in considerable value in any given 10 year period. The stock market (and it's variations like mutual finds) is not a commodity - it is a game and if you had anything invested in an IRA or pension plan prior to 2008 then you should understand what kind of a game it is.
posted by Poet_Lariat at 12:46 PM on September 10, 2011
Buying specific items, whether it's specific stocks, or gold, requires a solid understanding of that investment item. I personally would not buy gold at its current all-time high. You may have access to competent investment advisors if you have a 401(k) at work. Interview several before you give someone your money to manage. Here's a recent thread that is quite similar, and may be helpful.
posted by theora55 at 1:12 PM on September 10, 2011
posted by theora55 at 1:12 PM on September 10, 2011
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The clear problem I see is that you are losing money. You've had this money for 10 years and it's lost half its value. That's a Bad Thing. That would not be an expected performance from a good mutual fund over the past 10 years.
What I would recommend is that you speak to an advisor at Merrill Lynch tomorrow, and just say that you want the money transferred into a very conservative investment option, such as a money market account or bonds. Make sure (by asking!) that you will not incur any particular fees by moving the money into the chosen place. Then once your money is safe, you will have time to read some great websites like Get Rich Slowly (there are specific posts you can search for on how to deal with inheritances and windfalls) and learn about how to invest your money better and take control of your finances. Good for you for deciding to take action! Good luck.
posted by treehorn+bunny at 7:37 PM on September 9, 2011