Investing. What Is Your Opinion On The Morgtage Mess And Other Aspects Of Our Economy?

Investing : What Is Your Opinion On The Morgtage Mess And Other Aspects Of Our Economy

This is not a partisan question. If someone were to set up a retirement account and they can choose one of three portfolios; low, medium or high risk, say, for the next 10-20 years based on the global economy, what would be your suggestion to the investor. ~~~ mark_hensleysbcglobal.net ~~~

Best Answer To Investing Question

Generally, higher risk means higher returns (but also a little more chance of losing money). If it were me, Id read a little more about what the "high risk" option means. If theyre defining small-company stocks as "high risk" and I had 15-20 years until retirement, Id go with that one. Although in any given year (or even a few years), the value of stocks (and particularly small company stocks) can go way up or way down, over long periods of time, stocks have historically provided the highest returns of any asset class. With 15-20 years, theres plenty of time to recover if the market dives right after you invest. However, if high-risk means investments in options on butter futures contracts in Zimbabwe, Id definitely avoid that and go with the medium-risk. For long-term investments, I personally would also avoid the low-risk option. Thats likely to be money market accounts, T-bills, etc. that historically have only returned slightly more than inflation (and in some cases LESS than inflation after taxes on the earnings are paid). In my opinion, investments like that are only useful for preserving money that you need to use within a year or two. If you want your investment to grow faster than inflation, low-risk is not likely to do that. Oh, and the mortgage mess isnt really a factor in long term investing decisions. Thats a short-term issue that few people will likely remember much about in 10-20 years.

All Answer To Investing Questions

Answer 1

Taking a wild guess... 1.) 33% of an individuals net worth should be locked in gold.. [actual physical gold.. not paper promises] 2.) 33% of net worth should be locked in real estate.. [primary residence first, business and other real estate second] 3.) 33-34% remaining wealth in markets and other short and long term funds... [lookout for declining stock prices] notes: Gold is on the verge of taking off again.. [the time to buy is now with it low.. verses later with it much higher] Real estate is the market punching bag right now.. [that is until the big money holders realise that real estate holds its own during inflationary periods] Cold hard cash is losing value way too fast to be left laying around doing nothing. Does this help any?

Answer 2

Generally, higher risk means higher returns (but also a little more chance of losing money). If it were me, Id read a little more about what the "high risk" option means. If theyre defining small-company stocks as "high risk" and I had 15-20 years until retirement, Id go with that one. Although in any given year (or even a few years), the value of stocks (and particularly small company stocks) can go way up or way down, over long periods of time, stocks have historically provided the highest returns of any asset class. With 15-20 years, theres plenty of time to recover if the market dives right after you invest. However, if high-risk means investments in options on butter futures contracts in Zimbabwe, Id definitely avoid that and go with the medium-risk. For long-term investments, I personally would also avoid the low-risk option. Thats likely to be money market accounts, T-bills, etc. that historically have only returned slightly more than inflation (and in some cases LESS than inflation after taxes on the earnings are paid). In my opinion, investments like that are only useful for preserving money that you need to use within a year or two. If you want your investment to grow faster than inflation, low-risk is not likely to do that. Oh, and the mortgage mess isnt really a factor in long term investing decisions. Thats a short-term issue that few people will likely remember much about in 10-20 years.