Recently, a relative asked me to manage money for himself and his father. I'm a bit hessitent, but due to his situation, I see it makes sense.
I don't like being responsible for performance, but he just read part of All About Asset Allocation and seems to agree with the philosophy, which is what I would use.
He doesn't have much to invest ~ $16k and his father about $12k.
My thoughts are to put about 35% in bonds - need to find a non-taxed sheltered bond index fund - something that doesn't produce too much current income.
Then would put the rest in:
Large cap ETF
Value large cap ETF
(emerging ETF if non alot of overlap with the other 2)
Small cap ETF
Is there a small cap value etf?
Mght put small amount in a commodities ETF
Not sure of the asset allocation percentages yet.
I'm planning on putting the accounts in a low / free trade brokerage like Zecco. One account for my relative and the other for his father.
I'll rebalance annually.
He seems comfortable with using index funds and I've set his expectations for level of return. He'll have a longer investment window.
Has anyone done this before for a relative before? How do you manage it?
PS He wants to completely forget about the money and have all dividends reinvested.