Wanting to invest a large sum of money, what is the best approach?

I am a 60 year old male and would like to invest ~$1M into the share market.  I missed taking advantage of the dip in the markets during the month of March/April 2020 as the funds were not available.  They are now available to invest and my wife and I need income producing stocks, as we will need to utilise income from the $1M for day to day living expenses.  We are hoping for another dip in the market soon so we can get into some good blue chip income producing shares that had capital upside and also will provide a steady income via dividends.

A: For this sum of money, I think you should take a portfolio approach. This leads to three broad choices.


Firstly, a low cost, passively managed exchange traded fund. Guaranteed to return index performance less a fraction, nothing more, nothing less. I would stick to one of the broad based ETFs – either IOZ from Blackrock/iShares or VAS from Vanguard. If you have a really strong income bias, you could also consider VHY.


Secondly, an actively managed quoted fund. If income is the driver, you could consider SWTZ (Switzer Dividend Growth Fund) or eInvest’s EIGA. Subject to trading at a discount, also the large broad based listed investment companies such as AFIC (AFI) or Argo (ARG).


Thirdly, a portfolio of direct shares – I would think around 15 to 20 different companies across the industry sectors. You can review our model portfolios (growth and income) at  https://switzersuperreport.com.au/advice/model-portfolios/

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