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Author Topic: Recommend me some low-risk inflation beating investments.  (Read 2127 times)
wachtwoord
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June 21, 2014, 12:21:52 PM
 #21

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency.    You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar.   Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say.  A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance 

The share market completely crashing for a long period of time is unprecedented ever. As long as you don't sell the only downside is that you're not very liquid for a while.

Further, if this ever happens, and the economic collapse that is necessary for this really occurs, don't you think the Bitcoin hedge which I suspect everyone here to have will go up exponentially in value?
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June 21, 2014, 12:26:02 PM
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In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency.    You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar.   Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say.  A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance  

You may be right on the fundamentals for precious metals, but I believe this market is heavily manipulated by some large market making entities that are painting the market to look like a long bear market (repeat of 90s to dissuade PM investors). It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.

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wachtwoord
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June 21, 2014, 01:04:02 PM
 #23

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency.    You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar.   Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say.  A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance  

You may be right on the fundamentals for precious metals, but I believe this market is heavily manipulated by some large market making entities that are painting the market to look like a long bear market (repeat of 90s to dissuade PM investors). It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.

I don't hold PMs but the answer is physical. https://www.youtube.com/watch?v=vWz9VN40nCA
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June 21, 2014, 01:44:19 PM
 #24

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency.    You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar.   Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say.  A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance  

You may be right on the fundamentals for precious metals, but I believe this market is heavily manipulated by some large market making entities that are painting the market to look like a long bear market (repeat of 90s to dissuade PM investors). It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.


The demand is booming and the production of precious metals isn't so I don't think they will effectively manipulate it more than a few years

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June 21, 2014, 02:35:00 PM
 #25

Dividend aristocrats. Very stable and dividend growth usually outperforms inflation.
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June 21, 2014, 04:35:19 PM
 #26

...

@ OP protokol

If you already are somewhat diversified, and you do not already own gold, then that is an obvious choice for me.  Even mainstream money-managers say owning 5% - 10% of your wealth in gold is OK.

Platinum and (especially) palladium are less liquid (higher buy/sell spreads), but offer a little more zing to you investments.  Both Pt and Pd are used by industry and are scarce.  And if the world economy does do well in coming years, Pt and Pd should do even better.

But, I would stay diversified across your portfolio.

Forest land (discussed above) is OK too, but may depend more on how well the housing industry does than I would like.
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June 22, 2014, 08:40:32 PM
 #27

It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.


The FED is only as strong as those who back it.   They gonna be like a firefighter thats run the lake dry, nothing they can do about it at that point.     This links into political and social movement throughout the globe and no doubt very many varied views.   We can point to some obvious truths, mostly it revolves around greater population growth outside USA, outside Europe and the established wealth in the world.

  Maybe the rich nations support FED policy, the IMF, etc however its framed but its cannot continue forever.   At some point it will matter what India or China thinks and not just the party officials but the people.  Saudi Arabia is another rapidly growing country, at some point USA has to catch up in real terms not just printed political capital.  

The FED is just a man behind the curtain, the boom and they holler with grand effect but they are no greater then any of the rest of us

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June 22, 2014, 09:39:42 PM
 #28

Search for dooglus on this forum and you'll have a pretty good investment.
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June 23, 2014, 03:34:21 AM
 #29

You can never really "beat" inflation without taking on some level of risk.

You can match inflation plus earn a (very) little bit of return with Treasury Inflation Protection Securities. You would be taxed on the inflation portion of the gains every year if you do not hold them in a tax advantaged account.

If you can handle a little bit more risk then you can invest in a diversified portfolio of stocks, bonds, cash and alternate investments.
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June 23, 2014, 08:59:05 AM
 #30

Investing in yourself usually beats inflation and you get a nice return if you can improve your position in the field you chose and you can move the investment around the world

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June 23, 2014, 06:26:06 PM
 #31

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.
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June 23, 2014, 10:56:39 PM
 #32

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.

10% APR is anything but low reward. It is low risk though Wink
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June 23, 2014, 11:55:15 PM
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A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.

10% APR is anything but low reward. It is low risk though Wink

It is not low risk in general. It depends on the time you buy. Even if a broad index fund flattens out the risks of individual stocks, a general market crash can generate great losses that will not be regained for decades (inflation-adjusted) if you bought near a market top.

It's important to buy cheap. The stock market valuation is not favourable at the moment - stocks are overvalued. Buy after the next crash.
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June 24, 2014, 12:57:00 AM
 #34

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.

10% APR is anything but low reward. It is low risk though Wink

It is not low risk in general. It depends on the time you buy. Even if a broad index fund flattens out the risks of individual stocks, a general market crash can generate great losses that will not be regained for decades (inflation-adjusted) if you bought near a market top.

It's important to buy cheap. The stock market valuation is not favourable at the moment - stocks are overvalued. Buy after the next crash.

The thing with buying the index and your holding period is 100 years: it doesn't matter when you buy Smiley

I prefer to hold individual companies but I understand not everyone can or wants to do this so index is perfect for them. Don't try to time the market. You will fail.
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June 24, 2014, 12:58:41 AM
 #35

I'm not an expert, but I think that if you are looking to significantly beat inflation, then you're going to incur more risk.  Likewise, the lower the risk, the lower the reward.  I really think the best bet these days is just to hold your bitcoins, they should beat inflation bigtime if predictions are correct.
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June 24, 2014, 02:07:04 AM
 #36

I'm looking to invest £5k into something that will outperform inflation. I already own BTC, and want to diversify into something low-risk, low-return - anything above 5%/year would be OK.

Buy forest. It has predictable returns overall (in decades) above inflation (even if not managed intensively) and is really low risk if bought at reasonable prices. However you have to have knowledge in forest management.
It also offers recreational benefits.

What a great suggestion! I'd definitely take a piece of forest over stocks/bonds/paper promises any day as well.

The great thing about a piece of land like a forest is that not only will you have a retreat if/when shit hits the fan, you can also sell firewood! Each tree is like a stack of bills  Grin

In order to sell your trees you will need to spend some amount of money in order to cut down, transport and sell the trees.

Not sure where would I buy a tree investment and how much fixed cost land and property tax transport when the trees mature would it cost over the amount returned as an investment

That said it seems like a nice idea since it helps provide clean air while maybe making a bit of a return.

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June 24, 2014, 02:39:13 AM
 #37

I'm looking to invest £5k into something that will outperform inflation. I already own BTC, and want to diversify into something low-risk, low-return - anything above 5%/year would be OK.

Buy forest. It has predictable returns overall (in decades) above inflation (even if not managed intensively) and is really low risk if bought at reasonable prices. However you have to have knowledge in forest management.
It also offers recreational benefits.

What a great suggestion! I'd definitely take a piece of forest over stocks/bonds/paper promises any day as well.

The great thing about a piece of land like a forest is that not only will you have a retreat if/when shit hits the fan, you can also sell firewood! Each tree is like a stack of bills  Grin

In order to sell your trees you will need to spend some amount of money in order to cut down, transport and sell the trees.

Not sure where would I buy a tree investment and how much fixed cost land and property tax transport when the trees mature would it cost over the amount returned as an investment

That said it seems like a nice idea since it helps provide clean air while maybe making a bit of a return.

I think that there are some tree farms in Canada.
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June 24, 2014, 12:50:23 PM
 #38

The thing with buying the index and your holding period is 100 years: it doesn't matter when you buy Smiley

I prefer to hold individual companies but I understand not everyone can or wants to do this so index is perfect for them. Don't try to time the market. You will fail.


Right. You will probably be dead before you see returns. Cheesy

It's not about timing the market. It's about buying when the investment is fundamentally cheap. For the stock market this means that the overall price-earnings-ratio is well below 10.
Also we are not talking about only one market (i.e. the stock market) / only one type off investment. We are talking about picking the best investment overall. There are always areas which are relatively undervalued compared to others. To minimize risks, buy only in areas which are relatively cheap.
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June 24, 2014, 01:30:40 PM
 #39

The thing with buying the index and your holding period is 100 years: it doesn't matter when you buy Smiley

I prefer to hold individual companies but I understand not everyone can or wants to do this so index is perfect for them. Don't try to time the market. You will fail.


Right. You will probably be dead before you see returns. Cheesy

It's not about timing the market. It's about buying when the investment is fundamentally cheap. For the stock market this means that the overall price-earnings-ratio is well below 10.
Also we are not talking about only one market (i.e. the stock market) / only one type off investment. We are talking about picking the best investment overall. There are always areas which are relatively undervalued compared to others. To minimize risks, buy only in areas which are relatively cheap.

When the price to ratio is low it means you have some risks priced in, the expected profits may be overestimated, were you here in 2000 or 2008?

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