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Re: Feeling dumb and poor as the market goes up?!
Old 11-15-2006, 05:19 PM   #41
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Re: Feeling dumb and poor as the market goes up?!

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Re: Feeling dumb and poor as the market goes up?!
Old 11-15-2006, 06:26 PM   #42
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by wab
Exactly! Why do people dis real estate investors and then pimp stock investments as superior?

Stocks are less stable and less predictable than real estate, yet the historical returns are very similar.

And when the economy goes to hell, with real estate you're left holding a real asset. Everybody needs to live someplace. What will you do with your stock certs to keep you warm at night?
This is why I still own more real estate than anything else.

JG
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Re: Feeling dumb and poor as the market goes up?!
Old 11-15-2006, 06:29 PM   #43
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Re: Feeling dumb and poor as the market goes up?!

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What will you do with your stock certs to keep you warm at night?
do you have a woodstove or fireplace?
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Re: Feeling dumb and poor as the market goes up?!
Old 11-15-2006, 06:59 PM   #44
 
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by Mr._johngalt
This is why I still own more real estate than anything else.

JG
Well, I'm sure Wab will be happy to hear this!
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Re: Feeling dumb and poor as the market goes up?!
Old 11-15-2006, 08:05 PM   #45
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Re: Feeling dumb and poor as the market goes up?!

Considering the tenants I've been around around which I've been, I've never has much of an urge to be a landlord...

I'm about 20% cash at present, partly because I've been juggling my portfolio holdings/allocation/simplification, and partly because, gulp, of dirty market timing...

I upped the international, moved back into emerging markets, added some TIP, sold GLD and VGPMX, bought PCRIX, sold RWR, and got rid of microcaps.

Most of the shuffling came from moving to Vanguard for the lower ER. Swapped EFA for VGK and VPL. Also bought VWO.

10% - SP500 - 0.04%
10% - Russ2000 - 0.04%
10% - VGK - 0.18%
10% - VPL - 0.18%
5% - VWO - 0.30%
20% - TIP - 0.20%
5% - Intermediate bond fund - 0.03%
5% - PCRIX - 0.74%
5% - IGR - 1.48% (from etfconnect; IGR website says 0.96%...)
20% - MM
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Re: Feeling dumb and poor as the market goes up?!
Old 11-15-2006, 08:53 PM   #46
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by Nords
"The market can remain irrational for longer than you can remain solvent."
Although this is true about certain exposed speculative positions, there are choices other than 100% in, or 100% contra.

Can't speak for others, but I am very aware of many of the tiger traps, and if necessary I could last indefinitely with my current allocation. However the one constant is change (though that seems to have been repealed recently), so eventually I will be presented with the possibility of an attractive and more aggressive allocation.

If this isn't true, nothing I have learned in my 65 years on this planet makes sense anymore.


Ha

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Re: Feeling dumb and poor as the market goes up?!
Old 11-15-2006, 11:34 PM   #47
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by HFWR
... sold GLD and VGPMX ...
What's your thinking ? I thought the idea of commodities was very low
correlation with stocks, thereby reducing volatility.

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Re: Feeling dumb and poor as the market goes up?!
Old 11-16-2006, 08:49 AM   #48
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Re: Feeling dumb and poor as the market goes up?!

I subscribe to a few of the Motley Fool newsletters, they were enormously helpful for providing insights into which stocks/funds to buy. And they tend to re-iterate sound investment advice. Note: some of their newsletters have very volatile recommendations, only for those that like roller coasters.

Four months is too short a time frame to feel dumb. In these same four months, the market may have tanked and your foreign currency investments may have soared, and you'd be equally incorrect in feeling brilliant. That being said, you should consider adjusting your asset allocation. And yes, foreign currency investing sure sounds risky to me!

Good luck.

Michael
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Re: Feeling dumb and poor as the market goes up?!
Old 11-16-2006, 08:56 AM   #49
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by wab
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The last decade has been very kind to RE; who knows what we face going forward. But I'd say the same thing about stocks (are we in a cyclical bull in a secular bear?).
Exactly! Why do people dis real estate investors and then pimp stock investments as superior?

Stocks are less stable and less predictable than real estate, yet the historical returns are very similar.

And when the economy goes to hell, with real estate you're left holding a real asset. Everybody needs to live someplace. What will you do with your stock certs to keep you warm at night?
While I think these are a good points, I suspect that RE is more standard deviations above normal price than stocks (tho I don't have data), and more overvalued compared to intrinsic value (tho I don't have an argument to back that up ).

I think that graphs from GMO have shown residential RE as much more above trend than stock prices are. Not sure about commercial. If you have faith in their use of valuations to determine their 7 year forecasts, note that REITs have a worse predicted return than S&P500 on page 2. (GMO is a biased source, so I take their suggestions with a big grain of salt.)


Also, even with stocks, you still have ownership of something real, in the non-financial sense of "real." If you buy dividend paying megacaps (or BRLIX, though not great dividends) then most should survive a terrible economy, and maybe even continue to pay dividends. Though not at the same yield from today's prices as REITs, of course. And I wouldn't make the same argument for smallcap value.

GMO and others feel that "high quality" U.S. stocks aren't so badly priced. And, since they have low leverage, consistant profitability, and high ROA, they should also survive a bad economy.
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Re: Feeling dumb and poor as the market goes up?!
Old 11-16-2006, 09:00 AM   #50
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Re: Feeling dumb and poor as the market goes up?!

Quote:
Originally Posted by JohnEyles
What's your thinking ? I thought the idea of commodities was very low
correlation with stocks, thereby reducing volatility.
Due to a change in my 401k self-directed, I was able to get PCRIX. Additionally, VGPMX was closed to new investors (can you say 'asset bloat'?), and, over at RADDR's board, his timing model gave a sell signal. Seemed like a good time drop GLD and VGPMX...

As an aside, I made a killing, percentage wise. 8)
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 03:43 AM   #51
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by wab
Exactly! Why do people dis real estate investors and then pimp stock investments as superior?

Stocks are less stable and less predictable than real estate, yet the historical returns are very similar.

And when the economy goes to hell, with real estate you're left holding a real asset. Everybody needs to live someplace. What will you do with your stock certs to keep you warm at night?

i dont believe returns on real estate overall came even close to the return on stocks. real estate in most areas averaged only a point or 2 above inflation historically. as far as swings, actually stock swings over long periods of time become very smooth, in fact if your well diversified in other asset classes as well, i had a hard time pulling out any long term blocks of time where the returns werent within less than 1% of each other.
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 04:07 AM   #52
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by mathjak107

i dont believe returns on real estate overall came even close to the return on stocks. real estate in most areas averaged only a point or 2 above inflation historically. as far as swings, actually stock swings over long periods of time become very smooth, in fact if your well diversified in other asset classes as well, i had a hard time pulling out any long term blocks of time where the returns werent within less than 1% of each other.
I had a conversation yesterday with a stockbroker about this very topic.
His comments pretty much mirrored yours. He knows my proclivities.
Tried to sell me a fund (front loaded of course). I bought a 9 mo.
CD instead. Staying with the horse I road in on.

JG
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 04:16 AM   #53
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Re: Feeling dumb and poor as the market goes up?!

we only had 3 run ups in real estate in new york in the past 20 years.
we had a major drop in the 80's which took us down about 15-25% . the rest of the time was spent coming back very slowly. we had the first run up before the stock market crash in 87, the next one was in the 90's and then the current one. overall it was a lack luster return.
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 05:17 AM   #54
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by mathjak107
we only had 3 run ups in real estate in new york in the past 20 years.
we had a major drop in the 80's which took us down about 15-25% . the rest of the time was spent coming back very slowly. we had the first run up before the stock market crash in 87, the next one was in the 90's and then the current one. overall it was a lack luster return.
Here is my view of "real estate" as a genre...........It matters little whether
the RE market is up or down. There are always big $ to be made if you know
what you're doing. In this way, it's a bit like the stock market. The smart
people (or sometimes the lucky people) can still make money (selling short
for example). I miss active RE investing. I truly do.

JG
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 08:36 AM   #55
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Re: Feeling dumb and poor as the market goes up?!

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we only had 3 run ups in real estate in new york in the past 20 years.
we had a major drop in the 80's which took us down about 15-25% . the rest of the time was spent coming back very slowly.
I think you could replace "real estate" with "stock market" .... to each his own.

But when the average retirement only lasts ~15 years (retire at 65; buried by 80) a 10 year run/bust (RE or stocks) will make or break you.
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 09:14 AM   #56
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Re: Feeling dumb and poor as the market goes up?!

Quote:
Originally Posted by Mr._johngalt
Here is my view of "real estate" as a genre...........It matters little whether
the RE market is up or down. There are always big $ to be made if you know
what you're doing. In this way, it's a bit like the stock market. The smart
people (or sometimes the lucky people) can still make money (selling short
for example). I miss active RE investing. I truly do.
JG
I'm getting involved with some partners in Re investing. I have the following team: A top commerical RE guy, a top commercial lender, a solid residential RE guy, and the head of lending at a local bank, along with me. We are still working on a name, although I'm partial to Triple Net Investing Corporation.........

We have not found any solid opps yet, but everyone is working on due diligence. None of us wants to do the foreclosure deal.......too much time and money to inves there............I think we'll have some opps to invest in in 2007.............
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 09:21 AM   #57
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Re: Feeling dumb and poor as the market goes up?!

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None of us wants to do the foreclosure deal.......too much time and money to inves there............I think we'll have some opps to invest in in 2007.............
Made nearly all of my wad in REOs (post-forclosure) ... but 2007 - I believe - is too soon for this opportunity. Need a nice deep recession ... we'll see.
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 09:33 AM   #58
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Re: Feeling dumb and poor as the market goes up?!

Quote:
Originally Posted by Mr._johngalt
Here is my view of "real estate" as a genre...........It matters little whether
the RE market is up or down. There are always big $ to be made if you know
what you're doing. In this way, it's a bit like the stock market. The smart
people (or sometimes the lucky people) can still make money (selling short
for example). I miss active RE investing. I truly do.

JG
It seems to me that the inherent inefficiencies in the RE market (especially with regard to information availabilty) make it much more likely that an investor can find "good buys" there than in the stock market. Of course, finding those bargains, working the deals, tearing out wallboard, etc is also much more akin to real w*rk" than buying 1000 shares of XXXCorp and waiting for the results.
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 09:36 AM   #59
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by samclem
It seems to me that the inherent inefficiencies in the RE market (especially with regard to information availabilty) make it much more likely that an investor can find "good buys" there than in the stock market. Of course, finding those bargains, working the deals, tearing out wallboard, etc is also much more akin to real w*rk" than buying 1000 shares of XXXCorp and waiting for the results.
Agreed...........
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Re: Feeling dumb and poor as the market goes up?!
Old 11-17-2006, 10:51 AM   #60
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Re: Feeling dumb and poor as the market goes up?!

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Originally Posted by samclem
Of course, finding those bargains, working the deals, tearing out wallboard, etc is also much more akin to real w*rk" than buying 1000 shares of XXXCorp and waiting for the results.
"Real Work". That's the part I don't like about RE. I have a j*b. I don't need another. Also are the tax issues the same? I've heard that once you go RE you can only trade up or down with like property (more RE), or going to get a big tax hit. Is that ture?
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