On Sunday, 18 September 2016 at 01:04:16 UTC, dewitt wrote:
If you are actively trading I like Interactive Brokers. I know
u mentioned before about doing some day trading so they are
also good for that. If you looking for a more buy and hold
strategy for the Foundation then I would just choose which one
has lower cost ETFs and trade commissions.
https://www.interactivebrokers.com
I would have my accounts with them if my company allowed it, but
really just for trading purposes. I'm not sure it would be the
best thing for a non-profit that does not plan on trading much.
I would recommend they think first about their goals and what
kind of portfolio they will have and then think about the
brokerage that fits with their goals best. For instance, I have
some accounts with Fidelity because they offer free ETF trading
on a number of iShares accounts.
A commenter made a point about the amount of interest earned in
banks. Indeed, bank deposits in the U.S. earn basically nothing.
Of course, in other countries, short-term rates are below zero,
potentially offering you even less. The key point I would
emphasize is that you cannot earn a greater return without taking
more risks. Online banks offering you a nice interest rate are
investing in riskier debt.
I would again advise you to think about your investment
objectives seriously. The reason why an organization like the
Harvard endowment invests the way it does is because it basically
has an infinite horizon. I don't think the D foundation is in
that sort of place. If you have a shorter time horizon, then that
has implications on how much risk you should be willing to take.
That implies little to no exposure to equities/high yield
bonds/etc.
Another commenter questioned putting all the money in a single US
bank. Of course, there is a difference between having money in
deposits vs. invested in mutual funds. Anyway, even if you keep
the cash in deposits, the limit is $250,000 for FDIC insurance,
so I wouldn't think about splitting things up between several
banks until then. It might make sense to split up the money to a
foreign bank if you could possibly have liabilities there.
