Inheritance into the market?
Hi Terry,
I recently inherited (along with my 2 daughters 21, & 25) a little over 1.4 million from an Uncle who had no dependents, I cared for my uncle during the last year of his life, I had no idea that he scrounged and ended up with a 3 million dollar estate. The money is in cash (yeah)my financial planner is telling me it’s a great time to invest, I am just not feeling it. My husband and I are 60 and 61 and plan to keep in working for a while, and are good (not as great as we were a couple of months ago) and are on track. We have a low mortgage payment, one in college that will be done in December. Older daughter is “launched”. Let me know if you need any more information. Thanks for doing what you do. Stay well, J
Terry Says
This is the toughest moment in my career. Honestly, I’m just not “feeling it” for the stock market either. In fact, as I answer your question, I’m also thinking of the next piece I will post on my website. Here’s how I’m balancing my thoughts — but first you must understand that I already had a HUGE cash position coming into this event, and that’s what I was warning about in advance, wanting to get everyone “our age” into that same position. So I hope I can view it dispassionatly.
On the “buy now” side is not any analysis about a “bounce” or a “rebound” — just the simple fact that the Fed and the government have flooded the market with liquidity — and as and after people buy necessities, that money will remain in the system — and it has to go somewhere! $4 Trillion or thereabouts is a LOT of liquidity — and no surprise that much will eventually flow into the stock market.
On the “don’t buy now” side is the fact that I know there will be worse headlines and more scares — both healthwise, and financially, and maybe politically. I just don’t see it being so “easy” to get through this event.
So basically, it’s a personal judgment. I see no reason not to put up to 20 percent of your inheritance into the stock market — but not all at one time. Maybe $10,000 a month on the first of the month, into the S&P 500 stock fund, is a plan. I never know when stocks are a “bargain” except in hindsight.
And, from my personal standpoint, even though you won’t get any interest on the money in banks or by purchasing Treasury bills, I think it’s a lovely idea to have a ton of money in cash –at this stage of life. It may not make financial planners happy to hear this — but it’s YOUR money (and mine!).
