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The wealth-building thread
- Thread starter JeffS7444
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U.S. equities. Or silver, or crypto, the latter of which is where the biggest growth is right now, but do your research and tread carefully. It's the dawn of the next generation of the internet and finance there.
The entire bond market is worthless right now. In some parts of Europe, they are paying negative yields! Yes, that's right – you pay to hold them. That's how bad it is. So, wealth is moving into other assets.
All-in large cap. Oh, and go back in time a few years first. Who knows what to do nowadays.
Again, diversification: lower beta, for a small sacrifice in alpha.
I am well-aware that long-run returns on stocks are higher than on bonds. And that recent returns on US stocks have been higher than (say) on EAFE stocks.
Chasing short-term trends is a mug's game.
LMAO!
Guess it's time to invest in water futures.
AWK, XYL, AWR have been very very good to me. Been averaging in for nearly 10 years. And you get paid to hold them.
Or, perhaps, a supercharged V-8 Pursuit Special.
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If anyone was really capable of out performing the S&P 500 in the long run then they would go long their "outperform" stock portfolio and short the S&P 500 futures against it and then never work another day in their life as money poured in risk free in any market up or down.
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I don't think bonds being worthless is a short-term trend, unless you think nearly 10 years is short.
What you describe is the long/short equities model, a classic hedge fund strategy. But the results you lay out aren't quite as easy as you might think.
I would argue it is impossible.... long/ short hedge funds have a terrible track record as far as returns go. Index funds are close to impossible to beat long run as they have lower costs .... in order for an active fund to beat an index fund someone would have to be able to predict the future which is kind of like hearing the difference between good DAC's.... some thing people claim they can do but no one has proven they can.
...its also kind of like how some ppl think they can predict how a speaker will sound based on eyeballing a series of spinorama charts.
I got nothing.
In 2006 I predicted we were in a serious housing bubble, well financial bubble so I sold all my stocks. I was wrong. People thought I was nuts. But late 2008 I was suddenly right and not so nuts anymore I guess. Our stock market was literally wiped out and housing market tanked. I lost nothing.
Bought real-estate in the years following when the housing market was at rock bottom. Since then housing prices have doubled or tripled in real terms. Can't complain.
In 2006 I predicted we were in a serious housing bubble, well financial bubble so I sold all my stocks. I was wrong. People thought I was nuts. But late 2008 I was suddenly right and not so nuts anymore I guess. Our stock market was literally wiped out and housing market tanked. I lost nothing.
Bought real-estate in the years following when the housing market was at rock bottom. Since then housing prices have doubled or tripled in real terms. Can't complain.
For retirement, 10 years is short. But you are right that bond yields have been historically low for a long time now. I still want something that's uncorrelated (preferably anti-correlated) with stocks. And I'm not keen on your suggestion of "silver or crypto".
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I have seen it happening in the growth-to-value and back to growth stocks "rotation" over the last 12 months. Did you not notice all the value and "reopening" stocks start to rapidly rise last fall and winter as vaccine news started coming in? Then growth stocks fell by the wayside. People are in fact buying for the next 3-6 months, selling high after they run up, then buying the out-of-favor stocks low before they come back into favor again. By the time we actually got to "reopening", the stocks had already been run up and were starting to sell off. The regular investor isn't fast enough. Buy the rumor, sell the news. Some people are making a killing. I would not be able to make it work as I'm not nearly good enough. Few are.
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Everyone has their own risk profile and willingness to dig in and research. Solana (a serious project, not a fly-by-night gamble token) investors have made
"debt paid off" "kids college funded" "just hit 7 digits in net worth" "made more money over the last 3 months than in the previous decade of investing"
Don't expect this to be the norm. Like investing in any new company/project, you have to be in the right place at the right time when the opportunity presents itself.
If that's not your thing, the #1 and #2 crypto projects are safe bets and will 2-3x in the next 3-6 months. There are many more very interesting projects taking off, creating the next evolution of the internet and finance. Of course, do your research, and good luck.
Silver and gold are "safe" I guess, if you're okay with not keeping up with CPI...I believe the "hedge against inflation" is a marketing story invented by gold sellers using past performance as a selling point. It hasn't kept up with the stock market or even inflation in the last decade.
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I forgot to include one other crucial necessity, air. Air, water, food. Those are going to be 3 major areas of R&D and investment opportunities. We have literally destroyed this planet's environment inching closer and closer to full on toxicity/lethality. The trend is undeniable and similar to climate change where once all the climate change deniers were skeptical and given a voice thwarting the hard R&D investments that should have begun in earnest a decade ago. I have little doubt cleaning our air, water and soil (as well as developing new agricultural techniques for growing) will become the next challenge we identify/focus on. I know that I am repeating myself here so my apology. And for water, I am not for a moment advocating privatization of public water, that is reprehensible, I am talking about actually cleaning and protecting the water supply.
That's because you have more common sense than a doorknob.
Anyone who would consider an unsecured, volatile, unregulated construct an "asset" hasn't read their history texts.
Tulips, MDS derivatives, Beanie babies, Bitcoin.
MRC01
Major Contributor
Wealth building is simple, don't over think it.
Spend less than you make.
Always invest some portion of what you make.
In the long term, nothing beats the equity market (as a whole).
In the long term, actively managed funds under-perform the market, and have higher expenses.
You can't "time" the market, those who occasionally succeed think it's skill but it's pure luck.
In the short term, equities can lose value. But don't sweat it.
This leads to simple strategies:
If you employer has a 401K, put as much as you can into it.
When you're young, invest as much as you can in broad based equity index funds (S&P 500, total stock market, etc.).
As you get within 10 years of retirement, start shifting your investments out of equities into less volatile instruments.
Spend less than you make.
Always invest some portion of what you make.
In the long term, nothing beats the equity market (as a whole).
In the long term, actively managed funds under-perform the market, and have higher expenses.
You can't "time" the market, those who occasionally succeed think it's skill but it's pure luck.
In the short term, equities can lose value. But don't sweat it.
This leads to simple strategies:
If you employer has a 401K, put as much as you can into it.
When you're young, invest as much as you can in broad based equity index funds (S&P 500, total stock market, etc.).
As you get within 10 years of retirement, start shifting your investments out of equities into less volatile instruments.
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