Buffalo Bill you have a new hobby, and unlike most hobbies this will make you money.
it would be a good idea to spend and hour or two every week to manage the portfolio, and look at investment ideas.
some basics points
1. sit down and decide how much you want to use in the short term 1-3 years. so if you want to buy real estate, go on trip, buy a vehicle, ect.
keep this money in CDs, or T-bills, which are starting to offer some good rates.
2. pay off all high interest debts. one time a friend told me he had 10,000 to invest. however he also he had a long term student loan for 9,000 at 9.5%. that is a great rate. so pay off high debt.
3. decide how much money you want in cash this portfolio to generate for you.
4. divide your asset mix, cash, fixed income, and equities.
5. for bonds you should look at tax free munis.
however also consider sometimes you will get a lower rate than on a bond you pay tax on;
so do a rough calculation on the tax savings and higher rates.
would besides tax free munis buy bonds 1-5yrs. mostly. some 10yr. long term bonds will be great buys, in about 6 months........ :shrug:
6. slowly build the equity side of the portfolio, may want to start with mutual funds and etf/ishares.
may want to try DRIP/SPP just a few shares and slowly build up a portfolio, most discounts allow you to reinvest divs. or can use sharebuilder or buyandhold ect.
be carefull of Large US cap. companies. Remember one analyst when asked about GE breaking up, like CP did (cdn. company), said GE was world class and you could not compare the two.
completely agree. CP made me over 400% by splitting up into Fording coal, CP rail, fairmont, Pan canadian merged to form Encana, CP ships.
GE made me 6.5% in 18 months. he is correct no comparison.
also Berkshire has not performed well over 10yrs. Buffet is still a great investor however it is hard generate the same returns as the company needs to look at multi billion dollar takeovers instead of smaller caps,.
the equity market is weak currently so start slowly and also
never never never dollar cost average on a losing investment; you can become poor very quick.
thanks
selkirk
