A church ponders where to put new assets
Q Our church has been bequeathed money for investment. Half of it is in a money market account, yielding 3.3 percent. Half is in stocks. We wonder if putting a substantial amount of the money market funds into bonds, CDs, or like investments would be safe and provide a higher rate of return. We have no foreseeable use for the funds, except as interest, but we want to be prepared, should some of the money be needed. What kinds of stocks would you advise if we wished to shift into more solid equity investments? Finally, do you have any advice on safely storing the records of these accounts?
J.H., Hemet, Calif.
A "Remember that as you move into investments providing higher returns, you will face greater market risk," says David Bendix, who heads up Bendix Financial Group in Garden City, N.Y.
He suggests the money be divided into three components: long-term investments, which could go into blue-chip stocks, perhaps through a mutual fund; intermediate-term investments of two to five years, which could go into intermediate-term bonds or a bond fund; and short-term investments under two years, such as money market accounts, US Treasury bonds, or bank CDs.
For safe record-keeping, Mr. Bendix suggests setting up a brokerage account.
Q I recently inherited enough money to live on for three years. I want to invest the money so I can take the time to pursue a new career. Any suggestions?
S.D., Natick, Mass.
A "If you are investing for three years or less, avoid putting it all in stocks," says Bendix. He suggests putting one year's worth of money in a money market account or CD. Then put the rest in an intermediate bond fund and a balanced fund, which gives you a modest stock exposure, he says.
If you are using the money for current expenses, prorate it out over at least 36 months, he says.
Q Where can I get information on loans available to minorities seeking to start a small business? Would being a single Hispanic mother of three constitute being a minority?
G.K., Century, Fla.
A Contact the US Small Business Administration at 904-443-1900, in Jacksonville, Fla., or 305-536-5521, in Miami. They provide small business loans, both to minorities - yes, you qualify - and nonminorities.
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