Are you best off just leaving your money in the Bank?

I forgot to add, the subprime credit crunch is what led to this window of opportunity. Investors with CASH are now taking advantage of what's become a buyer's market, when it used to be dominated by bigger, better-capitalized players.

There's a silver lining in every cloud.:)
 
Quote from musclemoney:


After hearing his experience, and others who invest in rentals, I'm out! Buying GLD, and writing covered calls on GLD would be a MUCH better choice than owning an illiquid (troublesome) asset.
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This client sounds like a dummy. It's called hiring a property management firms. Maybe he is just too greedy to give them a few % of the rent roll, but then headaches cost a lot more. At the same time, if this guy actually puts his money with a financial advisor, he can't be that smart (no offense to you).

If you are considering serious scenarios in these crazy times, even GLD is out of the question. You are not holding real gold, just receipts of an ETF that holds physical gold in deposits. If you are considering serious situations, you have to think A) Trustworthiness, of which there is little in any product created by Wall Street B) Real redemption & distribution of the physical gold holdings C) Margin, which will be used against most when they pile onto GLD
 
I suppose one could crawl into a bunker with 5 tons of Twinkies, 100 pounds of gold and a .45 auto and some drinking water.

if one must
 
they seem to have done better than the equities us at least and they can go to sleep in the night.

Quote from musclemoney:

Thank you!!! Now, PLEASE relay that to the prospective Clients I have!!!:)

Some sitting on 3-5mm ALL in CD's. They'be been that way for at least two years that I know of.:eek: All because they don't understand inflationary erosion. They don't get a statement that says "you lost ___ this month," so they 'think' they aren't losing money. Sad...

Again, great post!!! Two thumbs up!
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very well said and I have always believed in this thesis myself, but thanks to your post, I verified it, and the return in both the Dow and the Nasdaq over the last 10 years is 0% if you had made equal payments each month. Now that really sucks. Go run the #s yourself. emerging markets are kicking some ass over the last 5 10 or 15 years. But their future returns will be flat for a while now.


Quote from tradestrong:

If you're in for the long run and dollar cost averaging, what do you care if the market tanks? Don't be fooled by those pointing to the market top in 2000 and saying..."see...we haven't had any growth in 8 years".

Sure, if you invested EVERYTHING at the very top and never invested another dime, then yes, you have no growth.

But if you're dollar cost averaging over many years, you inevitably buy more cheap shares and less expensive shares. Just move some to cash when markets look toppy, and then reinvest the cash in layers during a bear market. Again, who cares if you don't get all back in at the bottom? On top of that, dividends give you growth as well.

If you had invested all through the great depression, and didn't go all in at the top, you would have made a fortune in the 20 years after the depression.
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Quote from Hydroblunt:

This client sounds like a dummy. It's called hiring a property management firms. Maybe he is just too greedy to give them a few % of the rent roll, but then headaches cost a lot more.
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This was along the lines of what I was talking about - using some sort of property management firm to deal with it,finding tenants,checking them out,answering their bullsh!t problems,collecting payments and for all their effort receiving a percentage of rent.I wasn't thinking about popping round there on a Saturday to do the weeding!

Still,no-one seems overstruck on the idea but this is EliteTrader and not EliteLandlord so not too surprising.
 
That's what I'm talking about.Seems like money in the Bank generating interest(admittedly not that great in the US at the moment)without the risk of capital evaporation makes sense.

If WTI goes up to $250 a barrel,DOW will be in bad trouble,rates will go up to try and fight inflation hence better returns and you're not long a load of crummy shares or a property which is hosing in value.

I know it's all about timing but at the moment there doesn't appear to be any need to do anything but sit on the cash.
 
Quote from ashatet:

very well said and I have always believed in this thesis myself, but thanks to your post, I verified it, and the return in both the Dow and the Nasdaq over the last 10 years is 0% if you had made equal payments each month. Now that really sucks. Go run the #s yourself. emerging markets are kicking some ass over the last 5 10 or 15 years. But their future returns will be flat for a while now.
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You'd invest all your money in the Nasdaq? I sure as hell wouldn't. Actually, you just verified indirectly precisely WHY you would be fine dollar cost averaging. You mentioned emerging markets that have made a killing. If you're properly diversified, you would be invested in those emerging markets.

Proper investing doesn't mean buying one index and one index only. It means buying across multiple sectors and multiple markets. The idea is to find markets and sectors that aren't correlated so that if one does implode (like tech in 2000 and the financials in 2007), then your relative exposure is small enough that it won't kill you. And the other hand, your strong investments will continue to give you gains.

The idea is to smooth your equity curve and reduce volatility. When one of your markets or sectors you are invested in gets choppy and toppy, and a bubble is forming, you move out of that market or sector and start dollar cost averaging into uncorrelated investments.

I'm not advocating buy and hold, dollar cost average in only one index and forget about it, or 100% passive investment and never moving any money to cash.

What I'm saying is that anybody with a solid understanding of correlations between markets, up to date research on the state of the current environment for that particular sector or market, and a well diversified plan, WON'T get crushed to the point that savings accounts become better investments.
 
Quote from tradestrong:

You'd invest all your money in the Nasdaq? I sure as hell wouldn't. Actually, you just verified indirectly precisely WHY you would be fine dollar cost averaging. You mentioned emerging markets that have made a killing. If you're properly diversified, you would be invested in those emerging markets.

Proper investing doesn't mean buying one index and one index only. It means buying across multiple sectors and multiple markets. The idea is to find markets and sectors that aren't correlated so that if one does implode (like tech in 2000 and the financials in 2007), then your relative exposure is small enough that it won't kill you. And the other hand, your strong investments will continue to give you gains.

The idea is to smooth your equity curve and reduce volatility. When one of your markets or sectors you are invested in gets choppy and toppy, and a bubble is forming, you move out of that market or sector and start dollar cost averaging into uncorrelated investments.

I'm not advocating buy and hold, dollar cost average in only one index and forget about it, or 100% passive investment and never moving any money to cash.

What I'm saying is that anybody with a solid understanding of correlations between markets, up to date research on the state of the current environment for that particular sector or market, and a well diversified plan, WON'T get crushed to the point that savings accounts become better investments.
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Couldn't have said it any better!:) Ooh rah!
 
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