more-arw search

Q&A Forum

Investing excess cash

We're in the position where we accumulated several million dollars of cash and are looking for ways to invest that cash. We may need that cash in the near future so putting it to use in hiring or fixed assets that aren't easily converted in cash isn't an option right now. But with that - what are some of the ways of how you invested cash before? Our current thinking is to invest it into an index fund (low cost in terms of fees and time). However, we're still trying to find someone who'd work with us because a lot of the products I'm seeing on the market for mid-size businesses like ours (and a C-Corp) are targeted for pensions management, or have high costs. Any tips or leads would be greatly appreciated.

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Identify a qualified investment advisor in your market and present the issue. Regardless of the advice you receive on this site, the economic times have changed in the last twelve months. Any strategy that yielded great returns last year, may not be the optimal choice this year. What you do will be a combination of the market, your risk tolerance, and the time prior to you needing the funds. There are way too many variables to provide an answer.

Anonymous
(VP of Finance) |

We spoke with advisors at Morgan Stanley, but their fees are too high (percentage points of the investment per year, regardless of the returns).

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

We worked with our bank to do overnight investing. The funds (less the peg balance) are moved to a short term investment account overnight and returned to us the next day. This way I kept things very liquid and yet earned additional income from the investing. By keeping the peg balance in my account, I also covered any additional fees for the service.

Ernie Humphrey CTP
Title: CEO & COO
Company: Treasury Careers
LinkedIn Profile
(CEO & COO, Treasury Careers) |

Rates for what are seeking, low risk, overnight or short-term duration are still so low that you will not get much yield. The fees and cost of managing or outsourcing the management of a short term investment portfolio may not be worth it. I would ask everyone else, am I missing something that may be a good alternative to consider? If you have solid bank relationships you just may not do much better than what they offer in terms of the net yield you get by not needing to manage an investment provider.

Anonymous
(VP of Finance) |

One idea we had was to use the cash to invest into an index fund. For example, Vanguard 500 returned 14% last year. However, when trying to find a way to actually buy into those funds as a corporate entity, it appears to be close to impossible to do because those funds seem to target individuals and not entities.

Is it possible to get a brokerage account as a corporate entity?

1525 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.