On Mar 31, 5:02 am, raylopez99 <raylope...@[EMAIL PROTECTED]
> wrote:
> An investor I know wants to have income, capital preservation (very
> im****tant) and some small capital gains for $500k to be invested with
> a term of 3 years from today. Capital preservation is im****tant, much
> more so than capital gains. In fact, the investor has the entire $500k
> in jumbo CDs. Ironically, after three years the investor intends to
> speculate in commercial real estate. Go figure.
>
> I suggested that in lieu of CDs, there's probably an ETF/mutual fund
> that has short-term bond and/or conservative stock allocations that
> should outperform CDs--is this true?
>
> Please recommend which ETF/mutual funds (preferred over individual
> issues) they should invest in.
>
> RL
My guideline is 10% equities per year.
Meaning if money is needed in 3 years (more than 36 months), a maximum
exposure of 30% equities. At 24 months ****ft this to a maximum of 20%
equities and at 1 year ****ft to a maximum of 10% equities.
I would keep remainder in cash based assets and bonds.
There is principal risk associated with this technique.
Another different idea is a moderate mutual fund, such as PRPFX, which
is diversified enough to generally go up with returns greater than
cash accounts (I expect a 6%+ return from it). It invests in gold,
silver, growth stocks, swiss francs and US bonds and money markets.
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