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24HourNut Administrator  Body pillows rock!
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I don't believe the right way to judge whether or not something is a good investment, is by comparing it to another over some specific time frame. I can make almost all investments look bad by cherry-picking a time frame or just going by net returns over a time period - the last 20 years, post Y2K, the last century, or a specific range like 1981-1990. I don't believe one should say, well, that returned X over this time period and that returned Y, so X is a better investment. My basic reasoning is that different investments have different purposes and traits. You can look at bond fund Y, for example, and say it does much worse than stock fund X over time, judging by historical charts. But lots of people are not just interested in, or needing, max growth over time. They may need income, for example. They might even need safe, secure income. So while the average stock growth fund normally returns more over time, it would have been too risky and inappropriate as a reliable income stream. For that, a bond portfolio or similar fund generating interest would likely be deemed far more appropriate. Gold is another good example. It is easy to make gold look bad or good. It looked real good after Y2K and 9/11, as did most other assets tied to tangible assets instead of paper or those tied to corporate profits. Many invest in gold not because it is likely to return more than stocks these next 10 years, but because it marches to a different beat than the stock market and tends to store value much better during bad world environments. An ounce of gold bought you a good suit in colonial times and it buys you one now. 400 ounces of gold bought a home in my neighborhood 40 years ago, and still does now. So, gold serves a different purpose as a tangible asset. Similar things can be said for commodities and real estate. Maybe you want cash back from your stock investments, maybe you want dividends in addition to some growth. Those stocks tend to be called value stocks, not growth stocks - well, guess what. This last decade they returned better than the growth stocks because the negative situations in the world made people value the better cash flow and solid nature of those companies that return dividends - similar to how tangible assets rose a lot in recent times. Some investments are better than others just because of your needs. Maybe you like the idea of an asset that grows over time AND provides a stream of income that is not tied to paper assets like stocks and bonds - that would be real estate. So depending upon whether or not you want to disaster proof your assets, hedge against a recession, get income, get safety, get growth, get diversification - some investments can be better than others for you. Stocks are great long term but you are taking a risk since history is no guarantee of returns and you can lose half your principle. So, maybe you want to diversify. You might diversify with, let's say, bond funds - even though bond funds do not return as much as the stock growth funds, generally speaking, over time. But you know what, you are not in the bond funds for max growth. And you know what, bond funds returned much more than stock funds after Y2K because interest rates got cut severely. So, depending upon the interest rate environment, stocks can be worse than bonds over a decade. My position, since I started learning about investing and doing it 20 years ago, helping countless people set up retirement portfolios and just save in general, is that the sound principles of long-term investing is what the vast majority of people should be going by. Take the emotion out of it - be in stocks with money that you can stand volatility in and don't have to touch for a few decades. In other words, let time frame be a big guide as to what your asset allocation is. Time frame, diversification, quality, and get on a plan and stick to it. Those are the principles. Almost everyone who has done that over time is very happy they did. We watch those during stock crashes and other scary situations, high interest rates, etc. get nervous and start making investment decisions on emotion and how they feel the market is doing or what the market will do. Most people lose in that situation over time. So, my point is, judge an investment by its traits, not just its returns on some chart. There are too many factors, like your time frame, taxes, needs, and what you want to assume about the future. Just some thoughts - what are yours?
 The best human beings start good new topics and vote on the better posts. |
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Pyrite Original500© Member 
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Me, I like the ones that go up after I buy em. I'm fond also of the ones that go down after I sell em. The key is getting to em before they do either. But.... I got no use for a stock that does not pay a dividend. FWIW
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24HourNut Administrator Body pillows rock!
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Any more thoughts on what I wrote?
The best human beings start good new topics and vote on the better posts. |
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newbiecollector Pioneer100© Member  You can't fake real
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I agree with your statements Frank, in general at least but I would go another route. This of course depends on your age and how long you can hold on to your "investment". I believed as a younger man, and I also did it sucessfully........investing in hard assests that are not being reproduced...........LAND. You will have to study the areas, especially if your in or near a big city. But, big places and even smaller cities will NOT stop growing. If you get into this be very careful about the tax situation.........school taxes, county taxes etc......depending on where you are. There is great potential in land investment and only very rarely will you ever have less than you ever invested.
Enjoy the pleasure of life Wayne |
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24HourNut Administrator Body pillows rock!
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Great point, newbie. I was focusing on paper stuff. The same applies to tangibles in my mind - you can't judge the benefits of an investment, even land, by some specific time period. You have to look at its fundamental traits.
The best human beings start good new topics and vote on the better posts. |
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newbiecollector Pioneer100© Member You can't fake real
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Just something I did a long time ago Frank.......and it worked very very well. My kids have the proceeds because when I sold I put the money in a ( I can't think of what it is called now).......it was a non-revocable transfer of the funds to them but they could not get it until they were 21 years old. It only drew minimal interest in the time between.........but the kids are very very ok today. My little venture that time was a profit, for my children, in excess of 3000%. And it was a gamble for me but not a totally unthought out risk. I should have made this a new topic...........
Enjoy the pleasure of life Wayne |
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24HourNut Administrator Body pillows rock!
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Very nice, newbie! Good for you! I think you meant an irrevocable trust.
The best human beings start good new topics and vote on the better posts. |
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newbiecollector Pioneer100© Member You can't fake real
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That's what it was Frank........... It was 115+ acres of land......outside of Houston,Texas.......my old stoppin grounds.......... Pure bare land, nothing on it but tress and brush. But, it was on the side og I45, but no access raod......I was sure some day they would build one.........only other way to get to Willis was not on I45...but the old road. Turned out I was right
Enjoy the pleasure of life Wayne |
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24HourNut Administrator Body pillows rock!
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Who knew you were that slick? Good job, newbie.
The best human beings start good new topics and vote on the better posts. |
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newbiecollector Pioneer100© Member You can't fake real
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It wasn't exactly science Frank.........just gave it a lot of consideration and thought. Houston, like so many big cities are going to grow. And if that didn't work out, I would have still had the land and I bet ya at a much higher price
Enjoy the pleasure of life Wayne |
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24HourNut Administrator Body pillows rock!
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Not everyone has the courage or confidence to put their money where their thoughts are though. You did, and you should be congratulated. 
The best human beings start good new topics and vote on the better posts. |
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JustifiedByFaith Pioneer100© Member  Without Jesus we fall short...
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Make sure the investment is not dollar based and goes up when the economy and world tensions go up. Because the world is going down...down...down.
Jesus said, "Take heed that no one deceives you." Matthew 24:4 |
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foxglovepress Forum-Blogger© Original500© Member  NON-PC!!
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Do you know if anyone ever managing a Trust Fund, has ever lost the money in the longterm investments they chose? I'm just now signing all the paper work for the Trust Fund I won for my grandsons lawsuit. I had no idea someone would be investing money out of their funds! I even found out that they have to pay tax, on any profit they may receive from this investing. I don't understand. I thought all the money was theirs, and I'm concerned about this investing thing. The up side as I see it, the attorney handling the Trust, will take his yearly pay out of the investment money! Therefore leaving their Trust monies alone! The down side, can he lose the Trust by investing?
Justice for Mark.....Imprison Employers Who Hire ILLEGALS! |
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24HourNut Administrator Body pillows rock!
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Just make sure it is a highly diversified set of investments. For example: the more bonds, the more stability - but the less potential for growth.
The best human beings start good new topics and vote on the better posts. |
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