INVESTMENT STRATEGIES

[poppy dinar]

How to Invest Your Mega Millions Jackpot

The next thing to be clear about is that you shouldn't invest all the money in the stock market at once.

Here's why.

You don't know whether the stock market is close to a high, in which case your precious winnings will be sadly diminished by a downturn.

Instead, you should invest only 20% of the money in the stock market, split between U.S. stocks and international stocks. An additional 5% should be invested in gold or an equivalent.

And beware of the people that suddenly show up in your life.

As a lottery winner, you will besieged by offers from hedge funds, private equity funds and other mysterious investments, suggesting that you can increase your returns by investing in their funds.

Don't be tempted. At the best, you will only get returns similar to the stock market, but will pay much higher fees to get them, giving away 20% of the profits to get them.

At the worst, you will be investing in the next Bernard Madoff or Allen Stanford. As a lottery winner who is not used to being rich, you are the absolute favorite target for such people.

If you are confident, select the stocks yourself, for at least part of the money.

If not, invest in mutual funds offered by major mutual fund management companies with low fees attached. There are several of these, but as a first pick you can't go far wrong with Vanguard funds.

Diversify between funds and investment types though - you've got the money to do so.

In any case, at least a substantial part of the stocks or funds you buy should pay substantial dividends.

The remaining 75% of your money should be invested in short-term bonds, ideally in a spread of currencies including Canadian dollars, Australian dollars, yen and euros.

Of course, in euros you should only buy the bonds of prime credits, which today means Germany, the Netherlands and Sweden.

Then each year you should invest a further 25% of your portfolio in stocks and gold, in the same way as you did initially, selling bonds to do so.

By doing this, you will have invested your money over a period of three years, which should lessen the risk of having all your money invested at the top of the market.

Three years later, you will end up with a portfolio of 40% domestic stocks, 40% international stocks and 20% gold, with your stocks overall paying dividends of at least 2-3% of their value.

(At present, dividends pay only 15% tax, so are more attractive than bond interest.)

In the long term, you may want to own some bonds, and to sell some of the gold. But you should only do so when top quality bonds yield substantially more than the inflation rate.

At present, even long-term Treasury bonds yield less than inflation, while short-term bonds yield less still.

So the bond markets should be avoided except as a place to park your money for the short-term.

But with the strategy outlined above, you'll minimize the risk of buying at the top of the market - and avoid crooks and high fees - the two biggest risks for the newly rich.

The same thing is true if you have $656,000 to invest. The only difficult factor is that you get the money all at once when you hit the jackpot.

Of course, there are a lot worse problems to have.

[tep]

What part of this exactly is the rumor?

[poppy dinar]

Rookie mistake my bad............................mods please help.

[j904]

Such a waste of good space that could have been filled with another bank story or some secret source info