Asked by Jessica  |  Submitted September 26, 2013

What is the best way to increase my high income, large cap growth and risk allocation stocks?

My grandfather created a large cap growth, risk allocation and a high income fund stock accounts for me. I am looking to do something with the stocks to increase the amount but I am very hesitant since it is all I have.

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  Answers  |  5

October 01, 2013

Hi Jessica! Sounds like you have a great family - what a gift! As I read your question, I hear two concerns. One - I want to grow this money as much as possible. Two - I don't want to lose it. This is a classic risk/reward trade off. Your best bet is to sit down with a financial planner for an hour or two and discuss your current financial situation and your goals for this money. Then you can better determine its use and the right asset allocation for it. Don't feel bad if you need to change the investments from what your grandfather created. Gifts should come with no strings attached, so it should be yours to do with as you need. If that means making some changes, then do so. Good luck!

$commenter.renderDisplayableName() | 02.23.17 @ 12:04

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October 14, 2013

Jessica,

You have several options to focus on increasing your income without giving up some growth. Before you make a move, consideration regarding the taxability of a move should be considered. A gifted portfolio may have retained the original tax basis of any transferred securities into it.

Assuming you are ready to make a move your age will have an impact on some tools to consider, such as a guaranteed income rider that can be attached to a modern variable annuity contract. The amount of liquidity you need for emergencies and opportunities is also important.

The potential for rising interest rates creates a problem for the traditional income solution which is bonds (the value of bonds decrease when interest rates rise). Alternatives such as senior notes or REITS may be viable depending on your risk and time horizon.

Bottom line, this is not as easy as just buying a CD to create higher income.

$commenter.renderDisplayableName() | 02.23.17 @ 12:04

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October 25, 2013

Jessica,

I would recommend sitting down with a fee-only advisor locally and having them review your investments.

One thing that is important is ensuring you have a good level of diversification and that it is based on your personal risk tolerance. I know this sounds very generic, but believe me it is one of the most essential things to understand when investing.

A local fee-only advisor should be able to help you identify what your risk tolerance is, map out your financial goals and help you also determine the optimal diversified investment mix in your portfolio.

$commenter.renderDisplayableName() | 02.23.17 @ 12:04

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October 25, 2013

Thanks everyone. I'm taking your advice and feel pretty good about it.

$commenter.renderDisplayableName() | 02.23.17 @ 12:04

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July 17, 2014

This is great advice! Just what I needed!

$commenter.renderDisplayableName() | 02.23.17 @ 12:04

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