Portfolio Review. 25 MILLION windfall; help me not lose it

[Taylor Larimore]

Longview:

You have received many suggestions including one of my own. Nevertheless, anyone with a twenty-five million dollar windfall will be very foolish to rely on the advice of anonymous internet posters over the advice of qualified professional advisers with fudiciary responsibility.

Happy Holidays!
Taylor

[stemikger]

Longview:

You have received many suggestions including one of my own. Nevertheless, anyone with a twenty-five million dollar windfall will be very foolish to rely on the advice of anonymous internet posters over the advice of qualified professional advisers with fudiciary responsibility.

Happy Holidays!
Taylor

+1

[sjelen]

With a portfolio of $25 or $35M there's no reason you need to stick with non state specific muni funds or an untailored portfolio. You can and should find a professional firm who will build a custom portfolio of individual securities for 20-30 bps. In addition, and much more important that portfolio design, you need appropriate tax, insurance, and estate planning. It's penny wise to design a portfolio for that size on an internet board.

[abuss368]

Longview:

You will probably be besieged by family, friends and purveyors of "can't lose" investments. They will all offer a good reason for their recommendation. If it were me, I would invest in the simple Three-Fund Portfolio and spend my time helping others and enjoying life.

The Three Fund Portfolio

Best wishes.
Taylor

Hi Taylor,

As I wrote earlier, I liked your recommendation for the Three Fund Portfolio.

I was a little surprised that you did not recommend the Inflation Protected Bond fund considering you split your bond allocation 50%/50% between this fund and Total Bond Market.

[Taylor Larimore]

Abuss:

I was a little surprised that you did not recommend the Inflation Protected Bond fund considering you split your bond allocation 50%/50% between this fund and Total Bond Market.

It is dangerous to blindly mimic another's portfolio. I took a chance back in 2000, based largely on Mel's recommendation, to invest in Vanguard's then new TIPS fund. Our TIPS fund has enjoyed a higher return (with more volatility) than our Total Bond Market Fund, and together, they have made a nice combination. Nevertheless, I have no idea if TIPS will continue to do so. Frankly, I doubt if it will make much difference.

Small portfolios cannot afford two bond funds. Once TBM obtains Admiral status, a TIPS fund may make sense. I attempted to show this in the "Addendum" in my Three Fund Portfolio post when I wrote:

* Larger portfolios may benefit from adding TIPS, REIT, or a small-cap value fund in tax-deferred accounts.

There is more than one road to Dublin.

Happy Holiday!
Taylor

[longview]

Longview:

You have received many suggestions including one of my own. Nevertheless, anyone with a twenty-five million dollar windfall will be very foolish to rely on the advice of anonymous internet posters over the advice of qualified professional advisers with fudiciary responsibility.

Happy Holidays!
Taylor

I understand what you're saying. I think I mentioned before though that this board is a great sanity check. I know several wealthy people who have a "qualified professional" advising them and they wind up chasing returns. IMO the theory/rationale scales very well, there are just some breaks you can get as your portfolio size grows. I wouldn't think to get more tricky/aggressive with a larger portfolio, but exactly the opposite.

And I do admit to being paranoid about giving people access to my accounts for investing, buying individual bonds, etc. I'd have to invest enough time to watch them closely to be able to sleep at night.

[Grt2bOutdoors]

I understand what you're saying. I think I mentioned before though that this board is a great sanity check. I know several wealthy people who have a "qualified professional" advising them and they wind up chasing returns. IMO the theory/rationale scales very well, there are just some breaks you can get as your portfolio size grows. I wouldn't think to get more tricky/aggressive with a larger portfolio, but exactly the opposite.

And I do admit to being paranoid about giving people access to my accounts for investing, buying individual bonds, etc. I'd have to invest enough time to watch them closely to be able to sleep at night.

If you used a fund in place of a separate managed account for your fixed income selection, would you second guess (watching them closely) their bond selection then? I believe the Vanguard muni bond funds are actively managed - they are buying and selling individual bonds on a daily basis.
The benefit of holding individual bonds to maturity - you have the option of what and when to sell or buy. If you are paying someone a management fee - let them earn it.

[longview]

And I do admit to being paranoid about giving people access to my accounts for investing, buying individual bonds, etc. I'd have to invest enough time to watch them closely to be able to sleep at night.

On this note, if anyone has a larger portfolio with a well-priced adviser they love/trust and have been using for a long time please DM me. References help.