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it may be low volatility but even with the pp these are uncharted waters .
30 year bonds with a 1.40% interest rate and 10 year at .79% were never part of harry browns world .
those long term bonds can get hit hard if rates spike .
more and more i believe the evidence is showing we will be moving away from the near term deflation some think we will have based on the arguments i heard and more inflationary , perhaps something on the order of stagflation which has never been good for the pp or any asset for the most part . ....
while the pp is a lower risk portfolio , for those risk adverse it likely moves to much on some days when multiple assets move up or down together .
for some there is no investing option they are so risk adverse .
it may be low volatility but even with the pp these are uncharted waters .
30 year bonds with a 1.40% interest rate and 10 year at .79% were never part of harry browns world .
those long term bonds can get hit hard if rates spike .
.
That line right there has me perplexed. I know we don't like to say "this time it's different" but it is still unsettling. What's an investor to do when bonds can no longer be counted on to deliver their role in our portfolio? Are we entering a reality that requires a new portfolio theory?
Germany has several years of negative interest rate history, and the idea of buying bonds or CDs there doesn't make sense for most people. I bring this up as an example, given the trend here in the US towards historical low interest rates (way below 1%).
The market in many cities in Germany for buying into the renovation of old apartments and apartment buildings for rentals (not flipping) is a hot income investment trend. When I look at for sale ads on individual apartments, the ads for places with current tenants with gross income stream of 4+ percent of asking price get bold letters. Monthly common fees for the apartment will reduce the gross income to maybe 2.5 or 3 percent, which still looks good in a zero interest rate world. I can't think of many other ways to get income without bigger risk in a zero interest world. The downside is real estate investments are not liquid, and it can take a long time to sell a property. Of course, the golden universal rule in real estate is "location", which determines how fast a property can be sold.
That line right there has me perplexed. I know we don't like to say "this time it's different" but it is still unsettling. What's an investor to do when bonds can no longer be counted on to deliver their role in our portfolio? Are we entering a reality that requires a new portfolio theory?
bridgewater seems to think so .....
for 40 years the fed had room to lower rates and spur the economy ..... now they are hitting bottom .
maybe rates may dip to minus .50 to 1% .. but that is likely it ...so the gov't can only increase spending to get us through .... that is inflationary
Germany has several years of negative interest rate history, and the idea of buying bonds or CDs there doesn't make sense for most people. I bring this up as an example, given the trend here in the US towards historical low interest rates (way below 1%).
The market in many cities in Germany for buying into the renovation of old apartments and apartment buildings for rentals (not flipping) is a hot income investment trend. When I look at for sale ads on individual apartments, the ads for places with current tenants with gross income stream of 4+ percent of asking price get bold letters. Monthly common fees for the apartment will reduce the gross income to maybe 2.5 or 3 percent, which still looks good in a zero interest rate world. I can't think of many other ways to get income without bigger risk in a zero interest world. The downside is real estate investments are not liquid, and it can take a long time to sell a property. Of course, the golden universal rule in real estate is "location", which determines how fast a property can be sold.
negative rates in Europe are different ...they act as a tax on bank reserves forcing banks to make loans ... banks are not as quick to make loans as we are nor to take on the risk we do .
so the negative rates pushes them a bit .we have no such issues here
I feel that the current situation is completely new for the USA. We've had depressions and recessions and market crashes. But we never had Fed interventions anywhere near this magnitude.
Retirees have all been forced into stocks because of low interest, so the stock market is a giant bubble. And the Fed has also inflated stocks in other ways, even if it has not bought them directly.
Massive unprecedented QE has never been done before anywhere, not to this degree.
How can we predict anything now?
I don't trust index funds because who wants to be tracking a giant bubble when it finally bursts.
I don't trust mutual funds because the managers can't predict an unprecedented future.
Technology isn't safe because it can change suddenly. And we don't know who the winners will be until it's too late to buy them low.
I know the Fed has been buying government and corporate bonds like a maniac. So maybe the days are over when they could be a decent safe investment.
I don't know about real estate -- it probably stays inflated because of low interest, and also because of big investors that buy up all the good deals. Not sure though.
Gold is over-priced because of it's traditional reputation. Silver is too big and heavy to store easily.
I thought silver ETFs might be the answer, but then I've heard they aren't safe and will crash if the overall market crashes. I don't understand why though? Does anyone here know?
Then my last thought has been platinum and palladium. Hundreds of thousands of dollars worth might fit into a small safe deposit box. I think? I don't know.
I feel that the current situation is completely new for the USA. We've had depressions and recessions and market crashes. But we never had Fed interventions anywhere near this magnitude.
Retirees have all been forced into stocks because of low interest, so the stock market is a giant bubble. And the Fed has also inflated stocks in other ways, even if it has not bought them directly.
Massive unprecedented QE has never been done before anywhere, not to this degree.
How can we predict anything now?
I don't trust index funds because who wants to be tracking a giant bubble when it finally bursts.
I don't trust mutual funds because the managers can't predict an unprecedented future.
Technology isn't safe because it can change suddenly. And we don't know who the winners will be until it's too late to buy them low.
I know the Fed has been buying government and corporate bonds like a maniac. So maybe the days are over when they could be a decent safe investment.
I don't know about real estate -- it probably stays inflated because of low interest, and also because of big investors that buy up all the good deals. Not sure though.
Gold is over-priced because of it's traditional reputation. Silver is too big and heavy to store easily.
I thought silver ETFs might be the answer, but then I've heard they aren't safe and will crash if the overall market crashes. I don't understand why though? Does anyone here know?
Then my last thought has been platinum and palladium. Hundreds of thousands of dollars worth might fit into a small safe deposit box. I think? I don't know.
you answered your own question , everything you shot down . you are not an investor . and the purpose of the post is ?
you answered your own question , everything you shot down . you are not an investor . and the purpose of the post is ?
I have not been an investor, and I am trying to figure out if I should invest in something, because CDs won't get enough interest. I thought I spelled all that out.
This member didnt want advice, he wanted people to just tell him he’s right... let him put his life savings in Silver and Palladium.
If you think that is a bad idea, can you explain why?
If you feel safe investing in stocks when they seem disconnected from reality, can you explain why?
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