Alternatives to the Stock Market

[eengr86]

In my opinion the days of the 401k and tax deferred investing are in the tank. The run away spending in Washington will just create greater tax burden on income earners in the future and the tax rates at retirement will be greater then what they are at least for now. There are too many doom sayers out there predicting the DOW dropping to 3K or less. In this type of environment what are the best investments outside of the Stock Market for an individual investor that will get a better return then 0.001% like the money market accounts.

 

[ksr]

You might be interested in this book:

Worry Free Investing | Zvi Bodie

As with anything you read, it's a good idea to take the advice with a grain of salt. But it does offer a different perspective.

 

[IndependentlyPoor]

In my opinion the days of the 401k and tax deferred investing are in the tank. The run away spending in Washington will just create greater tax burden on income earners in the future and the tax rates at retirement will be greater then what they are at least for now.

Sounds like a great time for a Roth conversion to me!

 

[Onward]

There are too many doom sayers out there predicting the DOW dropping to 3K or less.

eengr86, if you really believe there's a disproportionate amount of pessimism, you should be loading up on stocks, since the stock market usually acts so as to confound the greatest number of observers.

 

[calmloki]

I like having value in things I can touch. Rental property and lending on property are two things we are doing. It is not without risk and does involve some effort though, and, as a show last night on foreclosures showed, more and more people are choosing to squat - just not pay and count on an overloaded legal system to give them a year or two of payment free home living.

 

[W2R]

One (somewhat contraversial) possibility is to pay off your home, if it is not paid off already. Essentially that gives you the income equivalent of whatever your mortgage P&I costs. If that is 33% of your expenses, then you have taken care of that fraction with no stock market risk.

I love having no rent or mortgage payment. But I suspect most people would say that stocks and bonds are better investments.

 

[rescueme]

In this type of environment what are the best investments outside of the Stock Market for an individual investor that will get a better return then 0.001% like the money market accounts.

List of Las Vegas Casinos -- by location or alphabetically

...

 

[rayvt]

I love having no rent or mortgage payment.

To each his own.
I love having my mortgage at 4.5% and my portfolio of preferred stocks at average 8.7% yield.

 

[eengr86]

List of Las Vegas Casinos -- by location or alphabetically

...

Exactly... It will be interesting where the market will end up by the end of the year.

 

[calmloki]

To each his own.
I love having my mortgage at 4.5% and my portfolio of preferred stocks at average 8.7% yield.

I would love to have a list of your average 8.7% yield stocks! I'd prefer them even!

 

[easysurfer]

One (somewhat contraversial) possibility is to pay off your home, if it is not paid off already. Essentially that gives you the income equivalent of whatever your mortgage P&I costs. If that is 33% of your expenses, then you have taken care of that fraction with no stock market risk.

I love having no rent or mortgage payment. But I suspect most people would say that stocks and bonds are better investments.

I fall in this camp too about not having to pay rent or mortgage. It's a good feeling to know that as long as I pay my property taxes, no one can kick me out of my own place

 

[Meadbh]

I agree with W2R and easysurfer that it's great to have 100% equity in your own home. I do as well. But if your home is a big chunk of NW and you are counting on your home as an investment......not such a great FIRE strategy.

I think the key is diversification. My portfolio includes income generating real estate (leveraged), venture capital, gold and silver certificates, preferred shares, equities, bonds (Canadian) and cash. At some point I am considering private lending, REITs and mortgage investment corporations. But here in Canada we are now in a rising intersest rate environment and I may just stick with GICs for the next tranche of my investments.

 

[rayvt]

I would love to have a list of your average 8.7% yield stocks! I'd prefer them even!

Hmmm, well the formatting doesn't come out right, but here's my list. Disc is the discount from par (usually $25) of my purchase price. Yld is my yield at the purchase price.

Symb Disc Yld Coupon

JPM-S -23.6% 8.68% 6.625%

BAC-H -15.8% 9.74% 8.200%

JPM-K -13.1% 6.76% 5.875%

JPM-G -26.0% 7.42% 5.490%

GYB -35.0% 5.3% 3.250%

MER-F -22.2% 9.36% 7.280%

BAC-V -22.4% 9.02% 7.000%

O-E -31.6% 9.87% 6.750%

USB-K -23.4% 8.22% 6.300%

WFC-L -16.7% 9.00% 7.500%

HT-A -44.1% 14.32% 8.000%

KIM-G -2.6% 7.96% 7.750%

KEY-F -9.8% 8.8% 8.000%

BRE-D -17.6% 8.2% 6.750%

DRE-L -27.7% 9.1% 6.600%

C-E -26.3% 8.6% 6.350%

CFC-B -18.2% 8.6% 7.000%

HPT-C -14.9% 8.2% 7.000%

CWH-C -8.3% 7.8% 7.125%

ABW-A -11.8% 8.7% 7.625%

BMR-A -11.0% 8.3% 7.375%

CFC-A -15.4% 8.0% 6.750%

C-Z -12.1% 7.9% 6.950%

FBF-M -8.3% 7.9% 7.200%

LNC-F -7.8% 7.9% 6.750%

FTB-B -7.8% 7.8% 7.250%

CWH-D -26.0% 8.7% 6.500%

Avg -17.5% 8.7%

 

[Bimmerbill]

Guns, ammo, and booze?

 

[utrecht]

I don't care if unemployment hits 15%, we start a war with China, California drops into the Pacific Ocean and inflation doubles....the Dow still isn't going down to 3000.

 

[brewer12345]

I would love to have a list of your average 8.7% yield stocks! I'd prefer them even!

Loki, I own a slug of JQC which is a lazy person's way of buying this stuff (and at a fat discount to NAV). JPC is a clone, so whichever is trading at a bigger discount NAV on any given day should do it.

As with everything else, do your own DD, YMMV, items in mirror may be closer than they appear, etc.

 

[rayvt]

JPC info:
12.4% discount to NAV. Good
24.41% leverage. BAD.
1.13% ER. BAD
31% foreign holdings. Arguably bad. Depends on personal preference.

All in all, I'd prefer to be a little un-lazy and keep that 1.13% ER for myself. And not use any leverage.

 

[brewer12345]

JPC info:
12.4% discount to NAV. Good
24.41% leverage. BAD.
1.13% ER. BAD
31% foreign holdings. Arguably bad. Depends on personal preference.

All in all, I'd prefer to be a little un-lazy and keep that 1.13% ER for myself. And not use any leverage.

Diferent strokes. I am of the opinion that the large discount to NAV covers a multitude of other sins. Obviously, YMMV.

 

[Tommy2]

splash

I don't care if unemployment hits 15%, we start a war with China, California drops into the Pacific Ocean and inflation doubles....the Dow still isn't going down to 3000.

LOL................LOL.................... Now that is funny any way you look at it....... True but funny!!!!!!!

 

[rsingh6675]

Any information about RBSpS?

I have some shares of RBSpS. They haven't paid dividend this quarter. Does anyone know if they are going to pay or they have eliminated the preferred dividend?

 

[roger r]

Personally, if I truely belived the stock market was headed for 3000 I'd be fully invested in US issued securities. All of the markets are inter-dependent to some degree and if stocks take that big of a tumble I would expect corp bonds, global markets, and real estate to correlate to some degree. I guess you could look into inelastic markets of goods and services like mortuaries or maybe breweries. Things that people will always need.

 

[calmloki]

.....
goods and services like mortuaries or maybe breweries. Things that people will always need.

And today, on As the Thread Turns.... I just found out that there is a consumer's alliance for burial. Check out this site for your state affiliate. Always look for the "org" at the end of a URL to help assure yourself of a true aid organization. Getcher self planted on the cheap.

FCA is a nonprofit federation of consumer organizations dedicated to ensuring consumers can choose a meaningful, dignified, and affordable funeral

 

[Bikerdude]

I have some shares of RBSpS. They haven't paid dividend this quarter. Does anyone know if they are going to pay or they have eliminated the preferred dividend?

No dividend for the next 2 years. Did you get the buyout offer?

 

[eengr86]

I don't care if unemployment hits 15%, we start a war with China, California drops into the Pacific Ocean and inflation doubles....the Dow still isn't going down to 3000.

Are you an eternal optimist or just a Ouija board believer? I think we have seen changes in the world in the last 10 years that rule out the last 50 years of strategies for the stock market. The cheese has moved IMHO.

 

[DallasGuy]

I don't care if unemployment hits 15%, we start a war with China, California drops into the Pacific Ocean and inflation doubles....the Dow still isn't going down to 3000.

How about DOW 5000? Found this on Yahoo Finance today. The guy seems somewhat believable and there seems to be an overabundance of bad news these days.

get out while you can! dow headed to 5000 charles nenner says: Tech Ticker, Yahoo! Finance=