On 9/18/16 7:16 AM, Mark wrote:
On Saturday, 17 September 2016 at 14:22:03 UTC, Andrei Alexandrescu wrote:
The Foundation's cash os currently sitting in a checking account at
Bank of America. I've googled for things like "brokerage accounts for
non-profit" and figured that most or all deep discount brokers
(Fidelity, Merrill, Etrade etc) allow opening accounts for non-profit
organizations. Bank of America has a partnership with Merrill Edge,
which I hadn't heard of before (likely a subsidiary of Merrill Lynch).
So, any suggestions on which brokerage would work best for the
Foundation? TD Ameritrade would be the familiar choice for me. On the
other hand, I'd be interested in trying something new. Thanks in
advance for any insights! -- Andrei


As jmh530 pointed out, the time horizon is probably the most important
parameter in an investment. If you can put the money aside for at least
one year, I think you can make 1-2% a year without taking a lot of risk,
e.g. by investing in investment-grade corporate bonds with short maturity.

Thanks all for answering! Well there is a relatively low-risk option to make some 5%-7% annually by investing in marketplace lending, see https://lendingclub.com/. (Individuals may do the same, too, btw - look into it!) I've been using them since 2013 with moderate amounts. Right now the portfolio's return rate is 5.06% - not to sneeze at. The issue is liquidity, i.e. your principal and interest are returned on a monthly basis over 3-5 years. The monthly schedule is actually nice for the Foundation because it matches the way operations are paid for.

One remaining issue is large rare expenses, e.g. DConf. For that case we need some buffer, or count on sponsorship.

Regarding the stock market, IB is quite attractive, and has an incredibly low margin rate. It does seem to be aimed at frenetic traders though :o). The lowest-resistance option is to just go with Merrill Edge (good reviews including on this forum, and works with our bank from the get go).

One differentiating factor may be special offers for non-profits - if you catch wind of anything like that, please let me know. Thanks!


Andrei

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