I am a conservative investor (always have been) and am looking to retire in the next 10 years. Realistically, I will need an ROI of at least 5% per year over the next 10 years on my non-real estate investments to achieve this dream, even assuming today's current rate of inflation. I am extremely concerned about how to achieve this, without incurring some major risk. My feeling is that the equity markets are out of control and totally disconnected from the domestic and world economic outlooks. The bond markets are at very scary levels (how much lower can interest rates go? Due for a major correction, IMO). Commodities are at scary lofty levels as well. And the world economy is on tenderhooks as well; we're one major European bank failure away from calamity, IMO. Throw in the debt issues, high worldwide unemployment, instability in the Middle East, and I am on high alert. CD's and Money markets pay crap too, and certainly are not keeping up with the rate of inflation. Here in NY, real inflation (forget this bullshit CPI statistic) is somewhere around 7-8% for me. This due to rampant increases in food, electric utility, home heating oil, health insurance increases, tuition increases, gasoline, local taxes, etc., etc., etc. So, without incurring major risk that may be unrecoverable in a 10 year time frame, where would you look to invest for the next year, 5 years, 10 years, with an eye out to achieving an average ROI of 5% over this 10 year period? Given my gloom and doom outlook, am I better off investing in a longer-term CD, to just minimize my real loss, and preserve as much capital as possible? I would greatly appreciate any serious commentary on the above. I really don't know where to invest my money any more.
I am sinking almost all of my money in GLRE. I think Einhorn is going to be the voice of the market for decades to come. No one will ever replace Buffett but Einhorn is the next best thing. I think.
just curious, where is your money now? Are you just sitting in cash? And if so, for how long have you been there?
I took profits about 6 months before the credit crisis hit (pat on back), but I've been sitting mostly in some 3-4 % CD's and some GIC's since then (yeah, missed large equity and bond run-ups, except for some VZ and AT&T stock I kept). The CD's have mostly matured this year, although some fall due early in 2013. Took ZERO hit during credit crisis, and have had low returns since then. So, yeah, sitting in cash currently.
you and me and a lot of others. No good place to go right now. I have plenty of stocks but quit adding at 1306. I buy a little GLD on dips, but I'm content to sit in cash for a while, but will actively buy any dips in the S&P. Not sure where all this doom and gloom is coming from, P/Es are low, no inflation in site, fed is not tight, only thing is, it's been a long run up with no correction. I sold all the bonds I was not using for income, and now have no where to go. 6% is not an unreasonable expectation. If you're 100% flat I would DCA into a broad based index fund, you're going to need stocks to get 6%, but go slow and easy, just a little each month, if the correction comes you can go all in.
Thanks for your take and advice. IMO, low P/E's are a stat of the past and have little relevance in today's world, and I beg to differ on Inflation. Core CPI is a total joke - if you read my original post again, I have felt a 7-8% increase in prices over last year. Govt has been getting away with this Core CPI stuff for a decade now.
i totally believe you.. the gov numbers are totally scrambled.. the whole methodology is based on raising confidence.. there manipulating the interest rates.. why would they not game the employment and the inflation numbers.. what i see on the street is.. NO ONE KNOWS WHATS NEXT... theres a bunch of people wondering why they can't get a job.. going back for yet another degree... tons of girls going into nursery.. (because we will always need healthcare) i kinda feel like we are going to feel a dull spoon ripping our heart out for the next 5 years with ultra slow to no growth/manipulated numbers... otherwise we will get a big correction /realize some due volatility and flush some more shit out of the system.. just my thoughts... you can short bonds in a safe way.. ... seems like your not trying to "trade" you wanna put a lump of your safe haven cash somewhere you can't get hurt... my thoughts are always.. .how can i make money no matter what happens..... the more confused i am.. the less i speculate.. the more i stay in cash and less risky investments.. but i always wanna have exposure long to crashes.. . to much money to be made to quickly to not .... hell take a long shot with your pessimistic view with just a very small portion of your capital.. then keep searching for a good return on 99 percent of your money... as most people tell me.. if you keep most of your powder dry you'll be doing better then alot of people come a year from now.. i've always thought if you just held your money tight till huge sell offs and bought down the indexs.. you would kill it over time.. but who knows there are big nay sayers.. soros for example that has his super cycle bubble beginning from the 80's that is soon to burst.. i'm inclined to believe him.. he is back in gold..
Farming not all that big by me. Lots of probs Wirh droughts, pesticides, & other related Wearher issues. Thanks for the suggestion.