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Yep, Robyn, mj, and me are all bunch of hopeless cranks, good luck on the 10x return on a "currency reset"...
Currency ETFs are not in my main basket of ETFs. Kind of on the sidelines. I use them mostly to hedge the cost of trips outside the US .
OTOH - they can be a decent non-leveraged trade when it comes to short/intermediate/longer term currency moves. I'm not talking about 10x your money - more like earning 5-10-15%. Only way you can do 10x your money is with futures. I tried (bond) futures once - a long time ago. Futures are scary. Robyn
There's a credible middle ground here. Volatility of equities in the short/middle term, and lack of cumulative progress in the long term, is enough to chasten even the most stalwart cheerleader for stocks. Yet it's also true that if stocks continue to underperform for many decades - instead of merely 2 decades - then we'll collectively have bigger problems in society, than just measly returns. I'm as disappointed with 21st century stock market performance as anyone; but it also seems to me that 100+ years of history will not be rendered irrelevant. Eventually stocks have to recover.
There's a allocation of equities/bonds/other-stuff that ought to be reasonable. I don't see that allocation as 0/100/0, or 0/X/(100-X). My own allocation is something like 70/25/5, and I realized in recent months that this is too aggressive for me personally. What's the better mix? I don't know. But extreme avoidance or extreme enthusiasm is almost always wrong. To be truly sure - is typically tantamount to going wrong.
On my part - it isn't only a question of percentages - it's a question of absolute dollars. I am comfortable trading about 15% of our portfolio in equities - with the rest in bonds. That is up from about 10% a decade ago. When we had less money. It is all a question of comfort levels IMO. I am comfortable seeing an equities portfolio go up/down low to mid 4 figures on a daily basis on the best/worst days. Not high 4 figures or 5. Simple as that.
It is surprising to me that more people haven't gotten into trading since 2000 (it was popular in the 70's but fell out of favor in the 80's-90's). Perhaps everyone is hoping for a return of the mid-80's to late 1990's? Maybe they'll come back - but I'm not counting on it. I'm not talking about trading on hunches or the like. More like systems and technical analysis. Trading costs are so cheap these days - there is no reason not to try to "roll your own" IMO. Robyn
OP, what about inflation protection? You'd be wise to buy a rental house or a stock portfolio with your $300k, IMO.
I second this.
Real estate is about all that is left right now as far as cashflow, and the US residential market is rising. The millennial household formation will very likely keep demand strong.
Chinese are coming over here to invest in it because it's the best storehouse of wealth in the world. Some hedge funds are still buying distressed properties in bulk and renting 'em out.
Plus you get straightline depreciation and 1031 exchange and other tax deductions. It's very efficient. And if you get a 4% or less rate, that's as good a hedge on inflation as anyone could possibly have. Let the stupid banks underwrite the deal.
Buy multiple properties and build equity, then borrow against that equity and buy more!
That's how guys like Donald Trump and Michael Bloomberg got to be billionaires.
It's risky in the sense that if a tenant has to evicted it can cost, but the markets can fall too and cause as much or more trouble.
if you are really gun shy you could go with a defensive portfolio like the 4 piece permanent portfolio .
it isn't for growth as much as preservation of capital but it certainly will never let you be devastated by any particular economic scenario either .
25% in long term treasury's TLT
25% total market fund VTI
25% gold GLD
25% cash instruments. CD'S OR BSV
it responds strongly to
recession
depression
high inflation
prosperity .
it will lag in bull markets but will usually do well when things are falling . it has had very few negative years .
while today it isn't my first choice for my retirement portfolio or someone looking to grow money but for someone looking for something that can protect in good or bad times with low volatility it can serve a purpose .
it was actually up ytd when the markets fell .
as of last night:
ytd gold TLT is up 18%
ytd bonds TLT is up almost 8%
ytd stocks vti is up .30%
ytd cash proxy bsv is up 1.25%
so overall it is up almost 7% since january .
it had some poor years the last few years so don't expect returns to be at this level . when all is said and done the returns are likely going to be less as a long term average but still not bad considering the protection you have
Last edited by mathjak107; 03-19-2016 at 03:36 AM..
I'm not sure GLD is responding to anything today other than low/negative interest rates (disinflation/deflation). Whatever it's responding to - it is having a nice run. Robyn
I'm not sure GLD is responding to anything today other than low/negative interest rates (disinflation/deflation). Whatever it's responding to - it is having a nice run. Robyn
correct . wrong symbol typed.
yep it is responding to negative interest rate fears . but it is doing just what it should and when the dollar zigs it zags . in this case it isn't about the reasons for something happening like any insurance . it is in place as part of the plan .
i am no gold lover but it does provide coverage in an important area in the case of the PP
I don't have the stomach to be a landlord and deal with tenants. Although the mileage of others may vary. Robyn
our now deceased partner bernie spitzer made tons of money in real estate . but not mom and pop rentals , mostly as a developer and in special real estate ventures .
he was the savviest real estate investor i ever knew .
It is surprising to me that more people haven't gotten into trading since 2000 (it was popular in the 70's but fell out of favor in the 80's-90's). Perhaps everyone is hoping for a return of the mid-80's to late 1990's? Maybe they'll come back - but I'm not counting on it. I'm not talking about trading on hunches or the like. More like systems and technical analysis. Trading costs are so cheap these days - there is no reason not to try to "roll your own" IMO. Robyn
It is surprising to see people like you think trading works! You ever heard the old saying "where r the customers yachts". Tarading generates commissions for the brokers-notice how many a downtown skyline are filled with brokerage Names!
if anyone truely had a trading system that worked wall street would pay them billions .
most trading systems that strive for maximum gains fail at it . the others that cut volatility end up under performing over the long term . there may be a narrow window where in the short term a hedging trading system will work but longer term it usually trades return for that lower volatility .
there are ways to get that lower volatility without a trading system . portfolio's like the permanent portfolio have been doing it for decades with decent results .
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