It might be okay to invest in '‘Africa’ as long as you diversify. If averaged out in theory you could still enjoy better growth rates than developed countries. Stick some cash in countries that are ‘relatively’ advanced and stable like Nigeria and Kenya and Egypt , then some in places like Zimbabwe which ciuld well do better in future. How to do this exactly…not the foggiest at the moment. I would not invest in sub saharan Africa, screw that.
[quote=“BrentGolf”][quote=“Mucha Man”]Brent, this is such a 180 from you. Just a few months back where you were predicting stocks would continue to perform as a sound longterm investment vehicles, as they always had.
What’s with the change? You have gotten really gloomy of late.
This is not a gotcha, btw, as I am quite sure your pinky knows more about investing than I do. Just wondering why you have gotten so disappointed.[/quote]
If you really are interested, here’s a couple short articles discussing much of the same:
theironcondor.com/?page_id=2937
theironcondor.com/?page_id=3100
I’ve not changed my tune at all, no idea where you’re getting that from. I have always maintained and stated it dozens of times that for the average investor, sticking to dividend stocks and index funds and taking advantage of a dividend reinvestment plan is the best way to get the highest return they can and the same applies today as it always has. Nothing I’ve said changes that for the average investor. I said HIGHER, not high. Stocks haven’t and never will achieve a rate of return that would make me happy to invest in them, which is why I don’t. I don’t have one penny in stocks, haven’t in years. I just said for the average investor, stocks will return more than any other traditional asset class, which has been true for the previous 200 years and I see no reason why that would change anytime soon. Stocks, and more specifically dividend stocks are by far and away the best of the traditional asset classes and that won’t change. But I’m not the average investor 
I stopped trading stocks in 2011.
As far as recession goes, what I’ve been saying for years still applies. There will be a 6 month to 1 year period, probably fairly soon, where things collapse. When they’ve gone down sufficiently far, it will be followed by a sustained period of growth where stocks will lead the way. Why on earth would what happened the previous 50 times like clockwork suddenly not apply? I’ve not seen or heard anything that would make me believe this time is much different. The recession will crush asset prices quickly, then the economy will expand again and rinse repeat, muddle through. Returns for the past 20 years have been lower than the previous 20 years, and I feel that returns in the next will be lower than the last. But that doesn’t change the business cycle that will continue plugging along as usual.
I simply said that stocks are going to underperform their previous 20 years, as will bonds, real estate, and likely commodities as well. Which means people are facing a true retirement crisis. In the previous 20 year period, the average investor / financial advisor / Hedge Fund was getting a 3-5% rate or return. For the next 20 years that will likely be much lower. What’s that going to do to peoples plans? In a world where the expected rate of return might get cut in half, what then?
What are people’s portfolio’s going to look like for the next 20 years? Not small parts of it as in tech stocks or Japan, I mean the whole portfolio. In the new normal of super low interest rates which is here to stay for a while, what are people going to do? Accept a 2% rate of return, or do they have other ideas to bump that up to a reasonable level?[/quote]
Nicely put Brent.
Eco growth / cycles dont always equal higher stock prices tho. Taiwan and Japan indices are below what they were 20 years ago. If these countries citizens just sat in US treasuries over that space, they’d be sitting pretty.
This time may be different. No reason China, US or any massively overvalued market with depressed interest rates and inflated asset prices can’t go through the same decades of real return despair as Japan, Taiwan
If there were assets that yielded 5% long term easy free, they were snatched up a long time back. So for retirement I’ve got a net 15% equity portfolio with the rest in low yielding cash. Will crank it up when things go down the toilet. While waiting, learn to short like a champ. Bear markets are the fastest money you’ll ever make.
Retirement strategies are always a primary concern and will become even more so in the coming years because the government is going to be less and less help going forward. If there is another banking crisis, retirement strategies will be more important, not less.
Regardless of what happens in the future and what banks can or can’t do or how good or bad the economy is, it will still always be up to you to take care of your own retirement fund. It should be of great concern to everybody.
Retirement strategies are always a primary concern and will become even more so in the coming years because the government is going to be less and less help going forward. If there is another banking crisis, retirement strategies will be more important, not less.
Regardless of what happens in the future and what banks can or can’t do or how good or bad the economy is, it will still always be up to you to take care of your own retirement fund. It should be of great concern to everybody.[/quote]
I said retirement won’t be “the” primary concern. I didn’t say it’s not something to be concerned about. The primary concern in a major banking failure involving a bail-in scenario is access to funds for daily expenses and getting paid while hoping you come out of it without a major account reduction. I wonder how many in Cypress were primarily concerned about long term investment strategies when they couldn’t get money out of the bank. Do you think people should care more about retiring early than having access to money or having their funds taken from them?
Cypress? I’m a person who believes based on actual numbers that the United States is the strongest, most influential and important economy in the world, and you think that a Cypress situation is right around the corner. Yes I imagine we’re going to disagree on a few things 
Cypress? I’m a person who believes based on actual numbers that the United States is the strongest, most influential and important economy in the world, and you think that a Cypress situation is right around the corner. Yes I imagine we’re going to disagree on a few things [/quote]
I’m not saying it will happen, but it’s a very real possibility. Maybe you don’t remember 2008 when our banks had to get saved 
[quote=“cyberguppy”]Cash does have value if there is deflation e.g. Property, stocks, commodities go down.
Rather park in low yielding cash and wait for value to appear - even if it means waiting for a stock market tracker fund to come down 30+ %
If recession comes, the USD generally goes up in value too as the everyone liquidates out of other currencies and runs for USD.
No point trying to predict outcomes, just sieze opportunities as they appear. Stock markets could still rebound from lows, but the risk reward of long term investment is fairly poor generally across the globe.[/quote]
I also believe cash is an active position, and there’s certainly times when making nothing is better than the alternative and for short periods of time that’s prudent investing. But for the long run, I just wonder what peoples total portfolio’s are going to look like going forward. Specifically, what assets, what allocations, etc…
Yes it is a tough environment to find value… but maybe it always is.
Conventional asset management probably won’t work that well going forward with asset prices generally quite high. Maybe by building into a whole stash of Berkshire stock could just be the best bet.
Based on this guy, LT returns of 1% pa max for SPX are expected for the next 10 years.
Invest in US single family homes! Rent it out and your tenant will pay your mortgage. Location3x… and make sure rent market price covers your mortgage and other expenses, including repairs and maintenance.
Sounds good in theory but in practise it might be very difficult to achieve that. If you take a basic example of a 500,000$ home, mortgage 80% of it over 20 years, and add in your property taxes, average annual repairs, and all other expenses associated with home ownership you’re looking at something around 4000 or more a month. I don’t think you’ll find renters willing to cover that. Then you have to factor in the opportunity cost of the down payment, the fact that the investment is extremely illiquid, and you’d be buying at a time when home prices are arguable not going to appreciate very much for the next 20 years. It might work out in the end, only time will tell, but it’s risky.
I’m not talking about half million dollar homes in California (NOT landlord-friendly) that are highly inflated with bad RENT vs PURCHASE PRICE ratio. I’m talking about buying a $100-150K SF homes in Texas/Indiana with 25% DP (30yr loan) and 12% property management fee, ~$600 annual insurance and about $150-200 home ownership association. Rent is about 10% of purchase price depending on location (more is better).
The rent would cover all expenses, make extra payment to pay it off in 15 years, and still have leftover for repairs and maintenance and cash flow. The ROI on the DP and closing costs will be much higher than what the stock market will give. At the end of 15 year (or sooner if you pre-pay) you will be having a steady cash flow for… whatever.
[quote=“pin2xbo”]I’m not talking about half million dollar homes in California (NOT landlord-friendly) that are highly inflated with bad RENT vs PURCHASE PRICE ratio. I’m talking about buying a $100-150K SF homes in Texas/Indiana with 25% DP (30yr loan) and 12% property management fee, ~$600 annual insurance and about $150-200 home ownership association. Rent is about 10% of purchase price depending on location (more is better).
The rent would cover all expenses, make extra payment to pay it off in 15 years, and still have leftover for repairs and maintenance and cash flow. The ROI on the DP and closing costs will be much higher than what the stock market will give. At the end of 15 year (or sooner if you pre-pay) you will be having a steady cash flow for… whatever.[/quote]
Essentially you’d be talking about free money then right? Anybody with 25k for a downpayment can buy free houses. I don’t know that much about real estate or the places or homes you’re talking about so maybe, I can’t say one way or the other. But I do understand markets and game theory, and something tells me that if this kind of easy free money did exist it would have long been exploited by very well capitalized people with teams of expert analysts and connections in the real estate world. I find it very unlikely that the math works out so well that anybody with a bit of cash could just fly into Texas, throw down a bunch of down payments and turn them into free homes.
It’s far more likely that if this kind of investment strategy does work for you, the reason for that is you. Perhaps you have expertise in this area which makes it easier for you to make it all work. Knowledge and experience can turn what would be a losing investment for most other people into a winning one for you. But your expertise doesn’t translate to other people who don’t have your skill set, so I really don’t think this is something you could say would work for very many other people.
This has been discussed on here before and someone has an example of the risks involved. They had a deadbeat they couldn’t evict but wasn’t paying and the property was being damaged. It seems that this shouldn’t be allowed to happen but imagine if you are overseas and you have to deal with this.
That’s why you spend ~12% in property management. They advertise, lease, maintain and evict if necessary. With the internet, I have not seen the houses I bought with my own eyes… bad move, sure… but i don’t have time to travel and take a look. There’s trade offs, but it depends on the people you use. Real Estate agents, insurance agents and property management have resources that are free to use… they give free listings, consultations, scout… until you actually use their business.
Big, institutionalized investors do not fancy smaller market… but it is good enough for individual investors. Haven’t anybody read about Mr. Money Mustache?
Well, as it turns out, Janet (Yellen, not Hsieh) indicated last week that rates will be going up this year. I went all-in on a downward thrust: DJ30 futures Thursday night. It looked ugly for a while, but not so bad now.
It’s best to think of stock picking as no better than flipping a coin. It’s just as likely stocks go up on that news and eventual rate hike as down. I just hope by “all-in” what you really mean is a tiny portion of your total portfolio 
Getting a good rate of return in real estate is hard enough because the long-term returns barely outpace inflation and home ownership expenses stack the odds against you from day 1, but sight unseen investing and trusting a property management company to do it all for you to have your best interest in mind probably reduces the odds even further. It may have worked out for you and I truly hope it continues to, but as far as a viable safe long-term investment strategy, not so sure…
Your decision to invest should have had almost nothing to do with Janet Yellen and interest rates.
Why are you investing in futures? That is like going to a casino.
Just like evolution investing doesn’t have a direction to perfection.
Now seems like a good time to start buying Volkswagen.
It’s best to think of stock picking as no better than flipping a coin. It’s just as likely stocks go up on that news and eventual rate hike as down. I just hope by “all-in” what you really mean is a tiny portion of your total portfolio [/quote]
Not stock picking, just trading futures. Not my portfolio, just a little trading account I keep as an alternative to playing poker.
I’ve been trading with a downward bias for a couple of months now. Just look at the chart, it’s bearish, no?