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Alternatives to the Stock Market
Old 07-11-2010, 10:18 AM   #1
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Alternatives to the Stock Market

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.
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Old 07-11-2010, 10:25 AM   #2
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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.
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Old 07-11-2010, 10:25 AM   #3
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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!
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Old 07-11-2010, 10:45 AM   #4
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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.
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Old 07-11-2010, 11:00 AM   #5
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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.
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Old 07-11-2010, 11:53 AM   #6
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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.
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Old 07-11-2010, 12:04 PM   #7
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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

...
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Old 07-11-2010, 01:09 PM   #8
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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.
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Old 07-11-2010, 01:22 PM   #9
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Exactly... It will be interesting where the market will end up by the end of the year.
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Old 07-11-2010, 01:52 PM   #10
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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!
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Old 07-11-2010, 02:21 PM   #11
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Originally Posted by W2R View Post
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
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Old 07-11-2010, 02:44 PM   #12
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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.
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Old 07-11-2010, 05:14 PM   #13
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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%
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Old 07-11-2010, 05:22 PM   #14
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Guns, ammo, and booze?
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Old 07-11-2010, 06:01 PM   #15
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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.
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Old 07-12-2010, 07:36 AM   #16
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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.
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Old 07-12-2010, 10:17 AM   #17
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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.
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Old 07-12-2010, 10:40 AM   #18
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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.
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splash
Old 07-12-2010, 11:14 AM   #19
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splash

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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!!!!!!!
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Any information about RBSpS?
Old 07-12-2010, 02:15 PM   #20
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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?
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