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NYT: A Forecast for Low Retruns, and Advice for Investors!
The below linked article covers why low interest rates have made the investment environment 'radically differendt' and what one should expect. Hope you enjoy the read.
"I'm nervous ... It's tough out there Lou" --- typically in deadpan by panelist Marty Zweig on the old Rukeyser show. Guess not much changed in 25 years. Still tough out there.
Well anything worth while is not easy. Although I had my late father to help me along the path of investing ... he is now gone. But, some of his strategies and reasoning still resonate with me today; and, I have found his simple strategies to still be in fashion. Sometimes, as grown ups, we tend to make things complicated and more complex than need to be ... when in fact ... keeping simplicity in place might be the best avenue.
Let me continue. Fact, I can not compete with the electronic and high frequency trading systems that seem to be in place and limit and perhaps destroy capital formation form my thoughts. So I took a path that somewhat involves them. I let them beat stocks down ... then I increase my allocation to stocks ... and, when they recover, I sell some of them off reducing my allocation and risk to stocks. I have found when stocks are towards their 52 week lows they are most likely under valued and oversold by investors and, with this, I increase my allocation to equities. And, when they strat to approach and reach new 52 weeks highs then they have perhaps become somewhat overvalued and overbought by investors and, with this, I sell some of them off reducing my allocation and my risk to equities. Indeed, a simple strategy. Seems to work though.
Hi Skeet - Actually intended the Zweig quote to be an optimistic appraisal. Sometimes as investors we don't see the forest cause the trees are in the way. What the quote implies is there's a path through or around the trees if one takes the effort. Pa was a man of substance, but the substance was seldom cash. Over the years some good folk with these skills have helped, including this fine forum. Am also a different investor for having enjoyed WSW (widely regarded as a bullish program) over its 30+ year run. It's amazing all the different takes one gets about investing here. Sometimes a source of contention, but need not be. These tend to be folk who got their heads screwed on straight. (It's the other 90% I'm worried about.) In addressing these divisions once, MJG said something like: "I suspect each is correct in his own way." I agree. Great having you fully on board Skeet ... Carry on.
The recommendation of buying "real estate investment trusts, master limited partnerships and dividend-paying stocks" to supplement income is okay as long the clients fully understand the risk-return profiles are NOT the same as bonds. Take 2008 for example, S&P 500 lost 38% while Barclay Aggregate Bond Index had a positive return of 6%. A small allocation, 10-20%, while the rest constitutes of domestic and foreign bonds. Actively management could add value over longer terms.
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good for you to join MFO
Well anything worth while is not easy. Although I had my late father to help me along the path of investing ... he is now gone. But, some of his strategies and reasoning still resonate with me today; and, I have found his simple strategies to still be in fashion. Sometimes, as grown ups, we tend to make things complicated and more complex than need to be ... when in fact ... keeping simplicity in place might be the best avenue.
Let me continue. Fact, I can not compete with the electronic and high frequency trading systems that seem to be in place and limit and perhaps destroy capital formation form my thoughts. So I took a path that somewhat involves them. I let them beat stocks down ... then I increase my allocation to stocks ... and, when they recover, I sell some of them off reducing my allocation and risk to stocks. I have found when stocks are towards their 52 week lows they are most likely under valued and oversold by investors and, with this, I increase my allocation to equities. And, when they strat to approach and reach new 52 weeks highs then they have perhaps become somewhat overvalued and overbought by investors and, with this, I sell some of them off reducing my allocation and my risk to equities. Indeed, a simple strategy. Seems to work though.
So yes ... "It's tough out there Lou" ...
Skeeter