Actually it wasn't me, but I came across this dilemma on Quora and wish I had this guy's problems.
"Investment Strategies: I inherited around $10m, and am looking at investment possibilities with a long time frame (15+ years). Taking into account commissions/fees, and that no fund consistently beats the market, it seems to make sense to just buy 3 or 4 Vanguard funds and sit on them. Is this a wise investment strategy?
The proposed solutions are interesting for anyone in or nearing retirement, despite not having $10M to invest. Various insights into index funds/ETF's will be useful in constructing a retirement income stream.
In the response by Dan Kanivas he states Warren Buffett opts for fewer funds with this advice on investing in index funds: "...My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers."
I like the strategy of "buy 3 or 4 Vanguard funds and sit on them" but would probably go for 5 or 6 and a few direct shares a bit like the response by Scott Hess: "I spent the 90's and early part of the aughts intensely focussed on all things relating to financial planning and investing. During that time I made pretty good money and saved a lot percentage-wise, so I was on course for an excellent retirement........ I was putting in a lot of effort to merely match the market, but I wasn't brave enough to make choices which would materially beat the market.
I then decided to shift to more of a Three-fund portfolio approach, which is kind of what you're talking about. I don't manage to be quite that simple, I have six or seven funds, but that is my model. At the time one of my primary motivations was that I no longer could justify spending so much effort for so little return, because now all I had to do was not make mistakes and my retirement was taken care of (along with my kids' education, housing, plenty of travel, etc)."
Also interesting to read in the comments about new tech driven automated investment services in USA - Personal Capital & Wealthfront. I wonder how soon before we see these low cost services available in Australia?
I've had difficulty finding an investment adviser in the Gold Coast region that will work on an hourly basis, without wanting to steer you into their own platforms.
