Absolutely. If Canadian Grunt knows to a substantial certainty that we will have 4.5% CPI inflation long term with 6% nominal returns from equities, then he should just go out, snap up as many inflation protected securities as possible that pay more than 1.5% real yield and be done with it. Simple as that. Today's low return bond environment can still provide that in the US (not sure about the case in Canada though).
So what is there to argue about? You can beat the market without all that crazy volatility.
Hmmm - I seldom hesitate a chance to razz a Canadian - BUT I did endure the fun filled period 1966 -1982 starting out my investing career - so the faint voice of Yogi Berra's - 'it's De Ja Vue all over again' is echoing in my mind.
Probably won't repeat my efforts of yore - raw land, timberland, rental real estate, mining stocks, collectible and bullion gold, silver platinum coins, foreign closed end fund fixed income, Vanguard Trustee's International, warrants, preferred stock, convertible stock/bonds, and last but not least after 1970 - Psst Wellesley. I skipped commodity futures, single malt scotch LLC's, art, guns, stamps, but tentatively started collecting semi precious stones but the 'oooh why don't you mount that(for me)' put the lid on that idea. Paid my dues on many -and did so so on others.
This time around - defense is the SEC yield and offense is three yards and a cloud of dust until Mr Market beats the crap out of everyone dollar cost averaging for 15 to 20 years and the sun finally comes back out.
Now I expect the environment for rental real estate cats to become more competitive before too long. I suspect value ala dividends and interest to get some attention. TIPs and inflation protected securities are new this time around and I suspect they may moderate some of the high yield and high interest speculation of the 70's and 80's. And no I ain't gonna try STRIPs - zero coupon bonds.
Defense is SEC yield(Target 2015 = about 3+%) and offense is 5% variable of whatever the portfolio gives me. Note that Vanguard changes the mix as the clock ticks on.
heh heh heh - as an EX engineer I enjoy reading the Bogleheads and remember when the 2nd and 3rd decimal place used to thrill me a lot. As an ER I don't 'do' numbers anymore - handgrenades yes/numbers no.
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