Turbojack

I am taking my chance on real estate. I, like too old, plan on either selling it some dayor just keep on leasing in out.

cashmoney

Uncle Toys , There is one fatal flaw with your views.

You said that you won't need your money for 20 years , The oldtimers that have listened to this advice 20 years ago are unable to retire right now. The real tragedy isn't what your portfolio might lose , But what your retiring fathers portfolio has lost. Now he can't retire and has to continue with his part time job and struggle with his mounting bills and arthritis for 5 more years. There are safer places to put your money , Real Estate is always looking good , among other safe houses. The market is a gamble with your retirement.The question is "What will the market look like when I want my money"

say you are holding GE or microsoft stock and all of a sudden Enorn goes under and drags the price of GE and Micro down with it . Even though GE and Micro were doing great and showing big profits. When you invest in one company it is like taking all the companys in the market. It would seem that it does not even matter what company is fixing the books , because they all pay for it. If you want my advice , ?? Real Estate , HUGE returns in a short time. Happy trading

Uncle Toys

Sorry, was going to let this thread die a natural death, but cashmoney’s last post has been haunting me.

Cashmoney, if your father started his common stock portfolio 20 years ago, he should have done rather well – even at the current lows. My guess is something like 12% compound-average-growth rate. This would be a rather nice return over that length of time and I am certain it would be competitive with other investment options.

Shane, could you help me here, as I am not near a Bloomberg. Could you run a “comp” chart on the S&P500 and give us the annualize rate of return with dividends reinvested for a 20 year period ending at the current lows – thanks!

The investors today that are facing retirement soon have the same need to focus on their time horizon as the middle-aged saver. In my opinion, the minimum time horizon for investing in common stocks would be five years (and the longer the better). As someone approaches retirement, they typically start allocating less and less to common stocks.

There are no magic bullet investments out there. They all conform to the same behavioral and business principles. – real estate is no exception!

ursus

from 108 20 years ago to low 800's today, about 10.5% anualized

Shane

UT,

Just got your PM then saw this thread. I will go run the #'s and report back shortly.

Cashmoney,

If you think real estate is a fail safe and will always generate you "HUGE returns in a short time" you in for a rude awakening. Certainly real estate will help to diversify ones overall portfolio. I will not argue that and I would bet UT wouldn't either. However, real estate has bubbles as well and they can cause major heart ache and cause as much financial troubles as teh markets corrections. Not too mention the many other factors associated therewith.

Shane

UT,

Just did a Total Return Analysis on Bloomberg. Bear in mind that dividends were allowed to be re-invested beginning inteh mid-eighties so teh calculations took that into consideration.

Simple Price Appreciation 11.8278%
Gross Dividends Reinvested into the Index 15.0019%
Dividends Re-invested into the current 3 month T-bil at 1.6894% 13.0297%

X-Rated30

Hey market guys,

I was thinking about a stock that everybody has beat up on. TYCO has been investigated and investigated. Their accounting practices have been re-examined so many times, I don't see how they could have anything new for anyone to see. I am thinking the stock is truly artificially depressed,

Same with ELAN. They are trading in the $2.00 range on speculation that something is wrong. Their books were cleared through Dec of '01, so doesn't that mean that if they have done something fishy it has happened in the last 7 months? Also, I have heard that if it were broken up and sold off it would still be worth $4 to $7.

Any comments?

cashmoney

I have the same ideas about AOL/Time Warner...The investigation is just getting started...but..$10.00 , now , maybe 5 dollars later , Hell Time Warner is worth that alone , Tough Decision to make.
Here is a good site if the link works..
www.citizenworks.org/enron/corp-scandal.php

WRedmann

I knew countless first time homeowners who bought in Southern California in 1988-1990, and were equityless in 1992-1994. It was temporary of course, but those that needed to sell or wanted to refinance were stuck with the reality of the situation. Nothing is completely safe, and hindsight is 20/20.

jspeeddemon

Since we have so much helpful intellect pointed at this thread, I'll throw an interesting item out there, and maybe we can get some professional info that I can't seem to find on a stock. The symbol is CNC-PRV, pays a annualized return of 8.7%, and I guess this was figured at a much higher stock price. The dividend is $.54/share and last went ex on 06/26/02. Now figure you purchase this stock for approximately 2.80 today, and get $.54 or $2.16 annually, figure the return at about 76% and then weigh the risk. I will tell you that I never find any recent news on my service for this particualr stock, but it is part of Conseco financial, and I have already collected one dividend. It is on its 52 week low. Now if that isn't a bar room tip, I've never heard one. Good luck.