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Hi, this is my first post in the stock talk but I am in a situation and I need non-bias advice.

I inherited a trust fund on Jan 15 of 2006 for a substantial amt of cash; however, a trustee was placed in charge of the funds until I am 35. I am currently 23. from the initial investment date to mid-07, I gained about a 15% return only to see that dwindle away in the past few months. Now, I am down 4% from my initial investment date of Jan 15 of 2006. In 2.5 years, I have lost 5% of my portfolio. The funds are being managed by a Edward Jones broker who is as smart as a brick. Some of my stocks include Microsoft, Home Depot, Citigroup, and Bank of America. Enough said. I have made several attempts to request a withdrawal from the market because of the volatility; however, the trustee and the broker are not willing to listen or change. I would like to invest in precious metals, foreign stocks and currency, and leave some in CDs and money markets. The trustee is a relative so the situation is sticky. It is a really frustrating situation.

Am I screwed?

Is there anything I can do to not watch my money dwindle away?

Do you think the trust fund will be back and kicking in 12 years?

trends45 · Answer

Hi, this is my first post in the stock talk but I am in a situation and I need non-bias advice.

I inherited a trust fund on Jan 15 of 2006 for a substantial amt of cash; however, a trustee was placed in charge of the funds until I am 35. I am currently 23. from the initial investment date to mid-07, I gained about a 15% return only to see that dwindle away in the past few months. Now, I am down 4% from my initial investment date of Jan 15 of 2006. In 2.5 years, I have lost 5% of my portfolio. The funds are being managed by a Edward Jones broker who is as smart as a brick. Some of my stocks include Microsoft, Home Depot, Citigroup, and Bank of America. Enough said. I have made several attempts to request a withdrawal from the market because of the volatility; however, the trustee and the broker are not willing to listen or change. I would like to invest in precious metals, foreign stocks and currency, and leave some in CDs and money markets. The trustee is a relative so the situation is sticky. It is a really frustrating situation.

Am I screwed?

Is there anything I can do to not watch my money dwindle away?

Do you think the trust fund will be back and kicking in 12 years?

KOAJ · Answer

Microsoft, Home Depot, Citigroup, and Bank of America
-----------

having a smart broker investing you in BAC and C seems like an oxymoron

i dont know the terms of the trust but in no way should you ever not have complete control of your money

PALLADIUM · Answer

Koaj,He said smart as a brick?  Why are bricks smart; you may want to remove oxy and make it your user name?  If this is legit the kids smart buy PM&#x27;s all day as C, BAC and the rest are going under.

Vermeer · Answer

The terms of the trust are what you need to examine.Does it define who must manage the money? If not you could always find a dealer more in line with your investment perspective.

The easiest thing to do would be to politely talk to your relative, and see what they think.Don't be rude but simply ask him or her about whether other brokers could not be considered...

I would not panic however...nor act like you know the markets better than everyone else. A 5% loss in this market is less than the broad market average.

trends45 · Answer

Thanks guys,

The terms of the trust are that the trustee (a close relative) has the discretion to invest the funds how she would like; however, she cannot withdrawal any of the funds for personal or independent use. Until the age of 35, I have no control over the money. The only other way I could gain control would be to sue (the trust, the relative) for the control over the funds. I would have to prove the money is being managed in an incompetent manner, which I could. Thanks for the help and advice. I appreciate the replies

P-Unit · Answer

Trends, I actually work for a trust company as an investment manager of trusts just like the one you have. It appears that the trustee has sole investment authority, which gives them the right/ability to invest as they deem prudent. The tricky thing with trusts is that because of their fiduciary responsibility to you, they must follow what's known as the Prudent Investor Rule. Basically, they have to develop a proper allocation and investment strategy designed to benefit you based on long term results. They should have some funds invested globally (probably via low cost mutual funds) as well as some in bonds and cash, along with a US stock portfolio consisting of large, mid, and small cap stocks. As far as precious metals go, some trustees (mine does) promote in investing in alternative assets, but they use a broad based mutual fund to get exposure to all commodity-related investments (PIMCO offers an excellent option called the PIMCO Commodity Real Return Fund).

Vermeer is correct in that you need to review the terms of the trust. Sometimes, you have the ability to name a new trustee. I always find that mixing relatives and money is a sticky proposition. My company does not allow us to manage portfolio's for people we know outside of work in order to reduce any possible conflict of interest.

If naming a new trustee is not allowed by the document, then you need to learn to work with the trustee to develop a better long term plan that can accomplish your goals. They are obligated (by their fiduciary responsibility) to do that for you.

depeche2 · Answer

[Quote: Originally Posted by P-Unit]  Trends, I actually work for a trust company as an investment manager of trusts just like the one you have.  It appears that the trustee has sole investment authority, which gives them the right/ability to invest as they deem prudent.  The tricky thing with trusts is that because of their fiduciary responsibility to you, they must follow what&#x27;s known as the Prudent Investor Rule.  Basically, they have to develop a proper allocation and investment strategy designed to benefit you based on long term results.  They should have some funds invested globally (probably via low cost mutual funds) as well as some in bonds and cash, along with a US stock portfolio consisting of large, mid, and small cap stocks.  As far as precious metals go, some trustees (mine does) promote in investing in alternative assets, but they use a broad based mutual fund to get exposure to all commodity-related investments (PIMCO offers an excellent option called the PIMCO Commodity Real Return Fund).&#xD;&#xA;Vermeer is correct in that you need to review the terms of the trust.  Sometimes, you have the ability to name a new trustee.  I always find that mixing relatives and money is a sticky proposition.  My company does not allow us to manage portfolio&#x27;s for people we know outside of work in order to reduce any possible conflict of interest.&#xD;&#xA;If naming a new trustee is not allowed by the document, then you need to learn to work with the trustee to develop a better long term plan that can accomplish your goals.  They are obligated (by their fiduciary responsibility) to do that for you.  [/Quote]Excellent post.  A few bullet points:1. Carefully review the terms of the trust.  It may allow for you to replace the trustee.  Does it also allow for distributions to you for certain things or on certain standards?  If so, ask the trustee what you need to provide to document that you meet the standard.2. Write the trustee a letter about the portfolio mix.  The trustee is not going to want to make a big bet on any one thing.  That&#x27;s just too risky.  But if the portfolio is too much large-cap and too much in financials, etc., the trustee should be able to work with you to create an appropriate rebalanced portfolio.3. Document all your requests in writing.  The trustee is obligated to review the portfolio periodically to determine that it remains prudent.But ultimately, since you don&#x27;t own it yet, accept that you will not be able to have it invested exactly as you would if it were your own money.  Ultimately a trustee&#x27;s biggest fear usually is being sued for breach by the beneficiary, so if you have reasonable requests and ask appropriately, you should get results.

claycourtlesson · Answer

Best of luck, man.

Sherman79 · Answer

Trends, I dont think you have much to worry about. You have 15 years before the money is yours, and while them companies are going to take a big hit over the next few months, they will rebound  back and then some.  In the  meantime, you&#x27;ll still collect the dividend and if it is set up to reinvest the dividend, you&#x27;ll be getting some shares at a very low price which will probably double or triple at todays low prices in that 15 years.  i am waiting to pick my position before i move in on BAC. im just hoping they dont cut their dividend

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