The Dow dumped 250 points today- in fact the market has been lousy ever since April and most experts are not optimistic at all about the rest of the year. So where ya going to put ya money? Bonds? Bond yields are the lowest on record- not even keeping up with inflation and share prices will dive if there's the slightest increase in interest rates. Commodities? They ain't doing well either, and I've lost more money in commodities than I ever want to think about. Foreign markets? Have you read the news? Forget that!
So what's left? Even if you just sit in cash your losing 3-4% a year to inflation. In 30 some years of dabbling in the market I've never seen such a dismal time where there is just no good place to put money. Anybody got a suggestion?
Well I'm mostly in high-dividend stocks and TIPS right now. There are a number of stocks that are paying more than any bonds currently but the short-term risks are high. TIPS are Treasury bonds that pay a base rate but adjust up as interest rates rise. I've been losing on them so far because interest rates have been so low and flat but I suspect they will rise big-time after the election and then those holding fix-rate bonds will take a bath.
I can't complaint, Marseil, I've done well- but it's been more luck than skill- I was lucky to come of age at a time when technology was booming and made good money during '70s and had money to invest when bonds were soaring, moved to SW FL and bought some cheap land just as prices were taking off here- then caught the stock boom in the '90s. The investing climate was so good during these times even a mediocre investor did well. But it's not like that anymore. There is no good place for the small investor these days- you're lucky not to lose what you got.
And I know had I'd been born a generation or two later I wouldn't have done nearly as well. I pity the young people today. Those who get a professional degree will do OK but the rest are them- the vast majority will have a tough time and will likely be the first generation in the history of America to have a lower standard of living than their parents.