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Discussion Starter #1
I work at a small company that has excess cash and wants to make some return on it. Since the bank is offering squat and the owners know I have been somewhat successful with my personal investing, we started small and I've been working on investing a bit of our excess cash, having selected investments so far that I personally own as those are ones I have most thoroughly researched.

The problem I am having is that my personal selection basis is based on holding them for 40+ years and receiving bucketloads of dividends over that time so stock price means nothing to me. For the company's case, I'm not sure that's the best way to manage the investments. At the moment, they're up an average of 6.2% in the last month because of the nice run we've had, and now I'm not sure if the best move is to put in a trailing market sell order to protect the gains, cash out and wait for the market to drop again in the future (if it does - if I cash out and it doesn't, then what?), or just hold on to it and know we've got a 6% return from the dividends even if the stock price gains are gone.

I have tried searching for treasury based education or classes, but haven't had a lot of luck, and although some sort of formal training would be great if it's available, even something like a message board with people doing the same kind of investing for companies would be great, so I could quietly read and learn what the big boys are doing :)

Anyone have any ideas on a place to start? Google has not been lucky for me so far :)
 

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If the company has more cash than it needs, why not issue a dividend? If you're making long-term investments in equities, maybe you should ask whether it makes sense for the company to hold onto the cash from a return on equity POV.

Personally, I don't think equity investments make a lot of sense... I'd stick to bonds or paying a dividend to shareholders.
 

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Discussion Starter #4
Sorry, I should have specified. The cash is kept on hand because of government regulated working capital requirements so distribution back to the owners is an impossibility. The funds just have to sit there until some future date when the company no longer exists and the last owner turns off the lights. However, because of the efficiency with which we're operating, in the last 4 years, largely because of profit, we haven't even hit 20% utilization, so we could easily invest 60-70% without concern. (We're experimenting with 10% at this point).

In the past, we've just done GIC's, but at current interest rates it's not really that appealing, and since there's no sign that rates will be going up significantly any time soon it seems to be time to find an alternate solution.

A drop in value can be compensated for by diverting operating profit, but too much of that in the long term defeats the purpose, so the intent was to build up dividend cash to act as a cushion against short term value drops... I just realized that unlike my personal finances, where I have targets for retirement, I don't really have an "end game" for investing corporate money, which means I'm not really sure if the best method... heck, the best goal... is to leave it in there and build no matter what, set targets and operated based on those, or just keep the investments at the required balance and pull off all excess back into general funds on a regular basis.
 

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If there are regulatory capital requirements, I imagine there is some restriction on the kinds of investments that are eligible to be invested in, no?
 

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There is a certification course for treasury:

http://www.afponline.org/pub/cert/ctp.html

You can just buy the book if you don't want to pay the thousands of dollars to get the useless and generally unrecognized certification. I am planning on taking this couse myself.

With regard to where to invest, I would be much more cautious with other people's money then I am with my own, even to the point where I would refuse to take on that responsibility. For sure you would need to keep the portfolio conservative.

Possible outcomes:

1) You make a better than market average rate of return and everyone is happy
2) You make money, but not enough. Everyone is doubtful of your abilities.
3) You lose money or break even. Everyone is very unhappy and think you are an idiot.

With a conservative portfolio, it will be difficult to beat the market average. With a riskier portfolio, you increase the odds of showing a short term loss, which may cause them to take away your control of the funds before you are able to realize your long term strategy.
 

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Discussion Starter #7
Thanks Max, there seemed to be tons of Treasury certifications when I was googling, a lot of them defunct or european, all of them expensive and none of them to be appearing to be of good value, but I never thought of just getting the book and not taking the course (guilty of conventional thinking I guess).

And the outcomes you mentioned are exactly why I'm thinking I should find out what other people in this position do... the only advantage I have is that they aren't comparing my performance to the market, they're comparing it to the 0.25% interest rate the banks are offering :)

Andrew... actually there aren't any... I checked before starting all this, as long as the auditors consider it a liquid investment, it counts.
 

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I am a lot further down the ladder than I like to admit, so I really don't have all the details on our investment strategy, but I can tell you that in my company, they are extremely cautious. Everything in highly liquid overnight money market investments. Everything is balanced between different safe and tax advantageous banks: Caymans, Swiss, etc... I don't think we have any direct equity exposure at all, the idea being that we have enough risk exposure in our normal business operations, and any additional investment to earn profits should be focused in our actual business where we expect to earn much higher returns than investments in the market.

As far as a taste of what the big guys are doing, we have an interesting internal banking system (referred to generally as "pooling"), where all the companies of the group pool their money into a single bank account, and our accounting systems keep track of which company owns what. If we go to make a transfer between companies, it is only an accounting entry instead of a physical movement of funds. Same goes for loans and foreign exchange, which really allows us to save a huge amount of fees we would normally incur by going to the outside market (however, for tax purposes we are still required to charge the market interest rate on loans). Then there is the tax savings from having interest income on loans taxed in a low tax rate country while having the interest expense deducted in a high tax rate country, which involves creating separate investment companies designed to take advantage of differenet tax treaties depending on which country and type of income they are dealing with (with Canada, we found a pretty good tax rate with Ireland on certain types of income).
 
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