I am just looking for views on what you all think the market will do in the next 1 to 3 years. Is it time to go to cash or stay in?
Many wise folks have been in cash for quite some time now…
Of course, when experts disagree, we fools are free to choose. But many fools have cash and non-equities earning around 4-5% and sleep well at night for the time being.
I am not that wise in this sort of way, where can you get 4 to 5 percent by being in cash?
I’m no expert, but I cashed out in August '08, got back in a little late but still got very nice returns and have recently (3 weeks ago) gone back to all cash. Like Boudreaux said, I’d rather sleep well at night as I have no heart for a volatile market. It’s going to be an interesting summer…
Would love to know where people are getting a 4-5% return on non-equities . . .
My opinion on best case: You will see a global flight/return to dollars over the course of the next 12-18 months as the EU crisis plays out. This will have a short-term positive effect on the US equities market. However, US exports will start to suffer within 12 months due to the strengthening dollar and weak euro and corporate earnings will start missing forecasts by 2Q 2011. Summary: postive 2H 2010 and flat to weak 2011.
My opinion on worst case: The ongoing EU crisis continues on its current course with political infighting & no leadership, causing market uncertainty and increased bond speculation. Spain, Italy, Greece, France, Ireland, etc. fail to get their fiscal houses in order and the european house of cards falls sometime in 1Q-2Q 2011. Welcome back to the Dow at 7500. Summary: flat 2H 2010 - 1H 2011 and then the shit hits the fan next summer.
I am not that wise in this sort of way, where can you get 4 to 5 percent by being in cash?
Sorry.
We, anyway, are averaging about 4.7% in a mix of investments. Stable Value, Total Bond, two Gas Royalty Trusts (very safe ones with great records), TIPS and REITs.
Very little “real” cash in MMs. Some in CDs, laugh if you will.
But we sleep.
I was not laughing, I am the one asking for help, sorry if I gave you that impression. I was wondering where to put my cash if I could get that type return I by no means was laughing. I am in some bond funds but have some in market funds but my outlook is getting dim, thanks for you view I do appreciate it
I was not laughing, I am the one asking for help, sorry if I gave you that impression. I was wondering where to put my cash if I could get that type return I by no means was laughing. I am in some bond funds but have some in market funds but my outlook is getting dim, thanks for you view I do appreciate it
How old are you? Are you currently maxing out your tax deferred investments? How is your portfolio diversified? How large is your family trust fund (just kidding here).
All of these are questions which must be answered before you get any real advice.
I guess your original statment was that people are earning 4-5% on cash and non-equities, so I guess that is still accurate. I would just like to point out that that is not the same as earning 4-5% in low-risk / risk-free investments, which is what most people assume when you say ‘cash’. We are all stuck in the 2% boat on those.
Your are investing in some areas with as much or more risk than equities. You certainly can’t count on 4-5% going forward.
Tips? I though you were a farmer not a waiter.
Don’t rule out Korea either. If those 2 nations decide to get it on again, we’ll be dragged into that theatre and will really see the shit hit the fan as the other scenarios play out. And if the South were to pummel the North, would China step in? How much would we be on the hook for rebuilding if the North if it comes to that? Ugh…
Your are investing in some areas with as much or more risk than equities. You certainly can’t count on 4-5% going forward.
Not responding to you personally, of course…
So very many “money experts” have said so very many things over the years that one must ask the obvious question. If they’re all experts, then why does the average investor gain so little from their advice? If they’re all right, then why do so very many folks constantly fret over their losses and volatile positions?
I know many families who disregard all of the bullshit, make up their own minds, invest carefully, carry no debt and sleep very (very) well - despite the dire predictions of the “money guys”.
Our two roalty trusts are doing very well, thank you, TIPS and Bond funds ain’t gonna crash anytime soon, we need not discuss the MMs and CDs and I have no place I’d rather put my money at the moment. Going forward is a different story - when the time comes to evaluate and perhaps move funds round, we’ll do so.
We have a “professionaly managed” account out of our control…its expensive and a team of monkeys could have done better with it over the past five years. Farking idiots, but they drive nice cars…
**I am just looking for views on what you all think the market will do in the next 1 to 3 years. Is it time to go to cash or stay in? **
I bought into the market when the Dow was below 7,000 and sold when it hit 11,000. However, my advice would be not to try and time the market to make gains. Contribute regularly and consistently in solid stocks and you don’t have to worry about the daily or even monthly fluctuations.
Buy in when you can afford to let the money sit for years if you have to and then don’t sell if it is in a loss position. You will avoid the mistakes that almost all investors make, selling too early and buying too late.
It happened last year and will happen again, people are panicking and will sell at a loss then buy back in long after the recovery comes and miss out on more gains. You could make a killing if you do the opposite of most people and it never ceases to amaze me how many people know this but don’t have the patience to actually put it into place.
Look at some quality companies that are paying dividends in excess of 4% and buy those. There were a lot of companies with solid Q1 earnings and they are down simply over the hype about Europe which in many cases, has nothing to do with anything.
Be patient and if you don’t need the money stay in. If you have cash and don’t need it, then invest in regular intervals to smooth out your cost.
If you are going to invest in cash, you might as well stick your money under a mattress and get a good guard dog.
Tips? I though you were a farmer not a waiter.
We like “non-reportable” cash…and of course I’m a waiter.
I’m waiting for the mud to dry.
I am just looking for views on what you all think the market will do in the next 1 to 3 years. Is it time to go to cash or stay in?
Trying to time the equities market down to 1-3 years is speculating. If you need the money in <10 years, I’d stay out. If you can wait 10+ years, pick your bargains as best you can. There may be some decent opportunities in the coming months. But there are so many uncertainties in the world right now (Euro crisis/Koreas/U.S. debt), that you never know.
I am just looking for views on what you all think the market will do in the next 1 to 3 years. Is it time to go to cash or stay in?
Trying to time the equities market down to 1-3 years is speculating. If you need the money in <10 years, I’d stay out. If you can wait 10+ years, pick your bargains as best you can. There may be some decent opportunities in the coming months. But there are so many uncertainties in the world right now (Euro crisis/Koreas/U.S. debt), that you never know.
Yep…
What little equity exposure I have had over the last year is hedged with a short sp500 ETF (technically I’m about 15% net short since April), my only real exposure is a short EUR/USD etf (put on at 1.32)
My call is that we go to parity–and likely beyond.
I’m particularly concerned that I have not really hedged my holdings for inflation very well, but I can’t see myself buying gold at these levels, even though it is a perfectly rational trade, given the long term fiscal outlook for the US.
My call is that we go to parity–and likely beyond.
Translate that for us dumb folk, wouldya?
I am just looking for views on what you all think the market will do in the next 1 to 3 years. Is it time to go to cash or stay in?
I’ve adopted a “We’re all F’d” approach to investing 
You have only a couple choices. As someone else stated if you need the money in under 5-10 years or less, keep the cash.
OTOH leave it in the market and leave it alone.
Why, you might ask? Well the market is a reflection of our society. If the market collapses so will our society. If our society collapses your cash won’t be worth the paper it’s written on so in either case you’re FUBAR.
There is a 3rd option which is to cash completely out and invest in things. Real estate mostly, maybe directly in a known business that you know you can par take in and will return some value to you in case of a complete meltdown.
Either you believe in the market or you don’t. If you think we are headed to a complete and utter melting down of civilization as we know it, don’t be in the market. Otherwise stay in it until such a time that loosing value on your investment would be “Fatal”, I.E. near a point where you can no longer create an income for yourself.
The acceptation to this rule are those that have a decent enough handle on how the market works that they can “Time the market” and make money getting in and out at close to the right time. Not as many people can do this as think they can.
~Matt
Cash? You might as stay in the market.
Gold? Now that is a different story…
Fed keeps printing money like it is out of control, and every time the press runs, the money is devalued.