Investing Strategies. What is your move?

Pablo said:
I got rid of a bunch of useless funds recently. Up or down, not performing - gone.
Click to expand...
It's well known that investor's actual returns are much worse than the investments they're holding. How is that even possible?

Every investment (even the best investments) will have good times and bad times. If you buy "high performing" investments you may be buying them just before their bad times are about to start. And if you sell investments after a slump you may be selling just when their good times are about to start. You've effectively bought high and sold low.

Yet it's painful to sit and watch as a previously excellent investment slowly grinds its way down. Been there, done that - and hated it.

So what's an investor to do? No-one has perfect knowledge. I try to buy good investments and hold them for the long term. I have a number of investments that I've owned for decades - through good times and bad. My record is 45 years of continuous ownership. That investment has done quite well. Not always top performance but well enough to hold on.

My rule of thumb is to tolerate 3 years of sub-par performance before moving on. And I never look back. Three years may not be long enough but see my comment above on the pain of watching a formerly good investment grind its way down. That's not good either.
 
ecotourist said:
My mother lived until 2010. When she died she could not have bought a single house. And she had lived quite frugally.

So it wasn't just the stock market. In spite of high interest rates, inflation wiped out other investors.
Click to expand...
This is why your portfolio needs to be broad. I focused on buying and paying off our primary home; and that home needed to be in a good location. My strategy has always been to minimize recurring costs. This way, you are less vulnerable to market volatility.

Housing in a good location makes inflation work for you.
 
The Labor Dept released a new revision today for the numbers through March of this year. Total job gains were reduced by 306,000.
 
ecotourist said:
So it wasn't just the stock market. In spite of high interest rates, inflation wiped out other investors.
Click to expand...
Inflation is the silent killer. Most don't understand it, so its easily whitewashed.

During the 70's CPI doubled, stocks were flat, bonds were about the same. Housing tripled. Will be interesting to see what happens this go around.
 
Some people are so tight on money due to inflation they are now using multiple Buy Now, Pay Later apps like Affirm, Klarna, Afterpay, etc…. to buy groceries for their family.

Everything is sunshine and roses because the folks on TV says not to worry, everything is just fine….

:unsure:

www.nbcnews.com

How consumers use buy now, pay later apps to pay for food, gas and other basics

More shoppers are using apps like Klarna, Afterpay and Affirm to buy now and pay later for necessities as rising prices stretch budgets to the limit.
www.nbcnews.com www.nbcnews.com

nypost.com

Army suggests soldiers fighting inflation go on food stamps

The U.S. Army released a guide on inflation, including using Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps.
nypost.com nypost.com
.
 
JeffKeryk said:
This is why your portfolio needs to be broad. I focused on buying and paying off our primary home; and that home needed to be in a good location. My strategy has always been to minimize recurring costs. This way, you are less vulnerable to market volatility.

Housing in a good location makes inflation work for you.
Click to expand...
That's my strategy too, almost exactly. The only difference is we've lived (and bought a house to live in) where there were good jobs. We paid off our first house in 5 years and have paid cash for all of our houses since then.

We never lost money on a house but made very little a few times. On the other hand we had somewhere to live almost for free. The last 2 times have been a lot better - approximately doubled our money (which is tax free in Canada) in 17 years and 8 years respectively.

We did lose money on a 3 acre building lot where we planned to build a retirement home. But because that building lot wasn't our primary residence it became a capital loss for taxation purposes so it wasn't all bad.

We also have a broad portfolio, on the conservative end, currently with 30% bonds and 70% equities (Canada, US and International). Our best investment ever? Probably Berkshire Hathaway, though our 11 1/4 and 11 1/2% long duration Strip Coupons were pretty good too.
 
ecotourist said:
That's my strategy too, almost exactly. The only difference is we've lived (and bought a house to live in) where there were good jobs. We paid off our first house in 5 years and have paid cash for all of our houses since then.

We never lost money on a house but made very little a few times. On the other hand we had somewhere to live almost for free. The last 2 times have been a lot better - approximately doubled our money (which is tax free in Canada) in 17 years and 8 years respectively.

We did lose money on a 3 acre building lot where we planned to build a retirement home. But because that building lot wasn't our primary residence it became a capital loss for taxation purposes so it wasn't all bad.

We also have a broad portfolio, on the conservative end, currently with 30% bonds and 70% equities (Canada, US and International). Our best investment ever? Probably Berkshire Hathaway, though our 11 1/4 and 11 1/2% long duration Strip Coupons were pretty good too.
Click to expand...
I bought a small 2/1 condo in Campbell, CA in about 1988 after I got sober. $90K. Sold it 2 years later for $135K I believe. Bought a small 3/2 house in Cambrian area of San Jose for $203K. Sold it 5 years later, during downturn for like $186K. Bought the Los Gatos house in 1995 I think for $335; it was the worst house in the neighborhood by a bunch.
The values of the 3 places are, let's just say, a lot more than I paid.

But the good news is, I don't owe anyone a nickel. That's what counts as it takes the sting out of market conditions.
 
SC Maintenance said:
Inflation is the silent killer. Most don't understand it, so its easily whitewashed.

During the 70's CPI doubled, stocks were flat, bonds were about the same. Housing tripled. Will be interesting to see what happens this go around.
Click to expand...
Driven by comparatively high wage boomers coming into house purchasing age. I doubt this is going to happen again.
 
goingplacesanddoingstuff said:
Driven by comparatively high wage boomers coming into house purchasing age. I doubt this is going to happen again.
Click to expand...


There is more to it than that. The migration out of the rust belt started to pick up in the 70’s and continued. Those people moved west and south. Along with that families started to move to the suburbs. It wasn’t entirely boomers that were doing this.

Inflation is a very insidious thing. It affects everything. The numbers you see and hear from the media are woefully understated.
 
goingplacesanddoingstuff said:
Driven by comparatively high wage boomers coming into house purchasing age. I doubt this is going to happen again.
Click to expand...
You could be right - for a number of reasons. For example I can envision a glut of houses available in Florida in 10 years as boomers start to move away from single family homes and in to assisted living. Or you may see people fleeing areas of high taxes. Inflation saps local government budgets also - so when there squeezed the natural tendancy is to raise taxes. People will leave those places like there already leaving certain cities now. People also follow employment trends.

However @PimTac is also correct in the housing increase in the 1970's wasn't caused simply by baby boomer demand, but in periods of high inflation people with money want into tangible assets they can touch and feel. People were willing to "invest" what savings they had in housing. They weren't buying stocks and bonds. Realize now we have a global investment pool and the demographics of the rest of the world has worse demographics than we do, so that money could make its way here also.

There are only so many physical things to invest in.
 
Last edited:
SC Maintenance said:
The only possible direction subway can go is up, so still not saying much.
Click to expand...


True. So much fast food and similar that you see in grocery stores is done with the same process. Fresh made sandwiches are misleading.

The typical method nowadays is to pull frozen bread and sandwich kits from a freezer. The frozen bread goes into an oven that is timed. Once the sandwich kits are thawed the pre-sliced meats and cheeses are used to make the sandwich.

Go back to the old days when the guy behind the counter was slicing Bologna or whatever meat on the slicer. The bread comes from a nearby bakery baked that day.
 
You must log in or register to reply here.

Similar threads

Brons2
School me on foreign property ownership, from a USA perspective
Replies
13
Views
1K
cptbarkey
OVERKILL
Nothing is cheaper than mine to mouth coal
Replies
18
Views
1K
ZZman
The Critic
  • Locked
Silicon Valley Bank (SVB) Collapses
20 21 22
Replies
424
Views
16K
Astro14
buster
Europe has fallen behind America and the gap is growing
11 12 13
Replies
257
Views
10K
CanAmAndMore
D
GM 2020 Silverado HD 6.6 Gas - Bad Transmission
2 3
Replies
53
Views
3K
clinebarger
Back
Top