Best investment while we travel

[King-stew]

Originally Posted by barnakiel

Avoid intermediaries. Avoid funds. Diversify.

I'm not sure about saying "Avoid funds. Diversify".

Funds do diversify. In fact, regulated ones have to. And you can get a bond fund or funds that track indexes. Funds are just buckets of securities - they are just a vehicle. You need only find the right fund and some have incredibly low fees now - notably the index trackers. Perhaps you meant avoid hedge funds or other high risk funds.

I've gone for property myself because I want an investment that will give me some income and, of course, the capital appreciation at the end. If you have dollars - it could be worth taking advice on the UK market, maybe the London property market while your buck has more bang.

Or as someone said, look at a REIT which is a property fund so you get the investment in bricks and mortar without the hassle of having to actually purchase a property. Just make sure you are comfortable with the strategy of the REIT i.e. what kind of property is it targeting? residential? commercial? And what geographical area. And what it intends to do with the property i.e. buy one that is ready to rent or does it need some development? The latter being more risky.

[sailingfarmer]

I think the BEST and safest investment in the world right now is "PRODUCTIVE FARMLAND" You can lease your farmland for 6% if you are lazy. Being on a 4 year cruise if you aren't having a lazy vacation (at times) you will blow all our cruising dreams.

Productive farmland in Canada bought in today's market for commodity crops like winter wheat, oats, etc. can be leased out for a easy 6% return. If you get tropical farmland that has a niche on the other side of the spectrum you could get a 300% annual return. But at the end of the day... unlike gold you can eat it and regardless of war, depressions etc. PEOPLE GOT TO EAT!

[rosatte]

put ur money into realestate ull never lose just be wise as to were and what u buy location location is key

[Cheechako]

After years of gaining and then losing money in investments, especially when I had someone managing it, I learned to ask myself :
1) Do you have enough money to live out your days?
2) If YES... then just invest in something that is guaranteed like CD's. At retirement age you may not have enough time to regain a 30-40% market correction.

[ebisucapt]

I would suggest going here to find a financial planner https://www.chrishogan360.com/dreamteam/ I have used this site to find my financial planner and am very happy. They are dedicated to helping without a hard sell. They try to educate you and tell you all options.

[barnakiel]

Originally Posted by Invictus69

I agree that you should not rely on 'free [investment] advice' on a sailing forum. (...)

+1!

Nothing wrong with free, everything wrong with sailing. ;-)

b.

[barnakiel]

Originally Posted by King-stew

I'm not sure about saying "Avoid funds. Diversify".

Funds do diversify. In fact, regulated ones have to. And you can get a bond fund or funds that track indexes. Funds are just buckets of securities - they are just a vehicle. (...)

I said avoid funds for a different reason. Funds are not just vehicles, funds are businesses. So where I said avoid funds I meant avoid intermediaries that will charge their fees regardless of results.

Would you pay yourself a bonus from money lost in any given year? Well, funds will. Avoid intermediaries and their fees.

I do not know US market well enough to say if your regulated funds must be diversified. Elsewhere, diversification or lack of thereof is a function of the investment strategy of a fund, not of its regulation. (This is to say outside US you can find many regulated and non diversified funds). Country specific.

By diversify I do not mean buy vehicles based on diversified assets of the same class (e.g. stocks in various companies vs. stock in just one). Where I say diversify I mean get various classes of investments - get some treasuries, get some currencies, buy some rentable property, some gold, some beer. Diversify.

Dollars lost are more difficult to regain than dollars gained are easy to lose. (quote)

Finally, that the stock market is relatively high does not say anything about whether it will crash or keep on going. Many here are talking about volatility, or uncertainty and it is true that many finance professionals use these as a measure of 'risk'. But this is not how human brain interprets risks, and so terms used by the financial world should not be transferred to our everyday language (the financial pros are to fault, not us here). This is the huge disadvantage of getting ones financial education from mass media that tend to blindly repeat terms used by the financial world in a very specific aspect. This is how 'risk' (volatility or uncertainty) morphed into 'risks of investment in the stock market' and got anchored in minds of millions as a risky business. An example of what I am talking about can be tropical govt bonds that will have very low volatility but will be very risky to buy and hold. Low risk, but very risky. Beware.

So I will re-write my earlier statement here, hoping this time it is less vague and thus hopefully more useful.

Avoid intermediary fees. Avoid investing in only one market.

Cheers,
b.

[King-stew]

Originally Posted by barnakiel

I said avoid funds for a different reason. Funds are not just vehicles, funds are businesses. So where I said avoid funds I meant avoid intermediaries that will charge their fees regardless of results.

Would you pay yourself a bonus from money lost in any given year? Well, funds will. Avoid intermediaries and their fees.

I do not know US market well enough to say if your regulated funds must be diversified. Elsewhere, diversification or lack of thereof is a function of the investment strategy of a fund, not of its regulation. (This is to say outside US you can find many regulated and non diversified funds). Country specific.


Avoid intermediary fees. Avoid investing in only one market.

Cheers,
b.

Yes some funds will charge a performance fee even if there is a loss - most probably wont. It's all contained in the document of the specific fund in question. Some funds, like the index trackers I mentioned, don't have a performance fee at all and just have a tiny administrative and management fee and maybe an exit fee because, in reality, they aren't really being managed but are simply tracking an index (or a sample thereof). you might think using a middle man is always bad because you avoid fees if you do it yourself but sometimes the opposite is true in that by using a fund you have use of the economy of scale and will have access to markets that you couldnt normally afford. Like if you had a spare 100k - you cant buy your own property because its probably not enough but you can afford to put it into a property fund.

I don't know the US market myself too well but usually regulated funds for retail investors (i.e. not institutional or high net worth investors) will have diversification requirements that stem from a regulator.

I agree with the rest of your sentiment though, although I wouldn't see a problem with going onto a large investment managers site and splitting my cash up and investing in 10 different index tracking funds with different focuses such as put some cash in a commodity tracker, some in healthcare (which has apparently been doing great this year) some in property trackers etc etc.

Check out BlackRock's iShares series which is great for normal investors like ourselves to be able to have a browse. (I don't work for BlackRock by the way - not that if I did they would need a lone soldier on a sailing forum trying to drum up business for them! )

[Stu Jackson]

I danged near spluttered my coffee all over my keyboard with this question.

First, "The Best?" makes NO sense whatsoever, in boating, investing or anywhere else in life. Asking "What's the Best..." anything is like asking your mother what girl to marry before you've had a first date. And, in boating, everything is a compromise.

Next, I gagged when he said he had "$500K." I used to have that and gave it to my wife.

How do you make a million dollars? Give two million to an architect!

C'mon now, a fella who has $500K in his pocket should be smart enough to figure out what you all have been telling him without going on a boating forum to ask.

I remain amazed at the kinds of questions some folks ask, and I've been on these forums for over 15 years.

The answer is simple: diversify. What's so hard?

But, as mentioned by some, we have no idea if this guy is a 20 something who hit it good, or an old geezer who has only ten years to live. Is he single or have five kids just entering high school?

Wouldn't the answers be different?

[Bulawayo]

We rely on property.......
1) Provides a passive monthly income
2) We get capital growth (has doubled in value over the last 10 years)
3) We can cash in relatively easily given some time (allow 6 months)

Originally Posted by garrobito

Any investment guru around?
Next month we start to convert all our investment to cash...
I investigate and I feel really comfortable with an annuity.. it's low but safe...
How you invest your hard-earned money for a long travel? We planned go out the next 4 years and after that, mostly I gonna be completely retired.
Suggestions, suggestions... Number to invest is around 500K
Thanks you in advance

[denverd0n]

Well, at least no one can say that I was wrong when I said that he was sure to get some wildly inappropriate answers.

[barnakiel]

Originally Posted by denverd0n

Well, at least no one can say that I was wrong when I said that he was sure to get some wildly inappropriate answers.

Alas, this becomes a problem only when you can't tell them apart! This should not be the case with any adult and educated person in the West. Esp. one that managed to accumulate 500k.

And the guy who killed Jackson was a licensed doctor too. Having a pro adviser can kill you as much as applying health advice from the quora.

At least here you can get answers from people who are faced with the same challenges and so they are somewhat likely to have developed a useful bag of tricks.

Cheers,
b.

[barnakiel]

OK, since we seem to act like a bunch of pussies, I will chime in with a real (cruising) world sample. Just do not sue me yet. ;-)

Given free capital X (your capital not right now tied in worthwhile investments):

Given n1+n2+n3+n4 = 1.

If you are in a place where property is easily rentable and if you can easily manage/control such property (yourself or by an agent)

Get X/n1 of such a property, rent it, monthly advanced rent. Kick out anybody who delays by more than a week.

Get X/n2 in US govt treasuries or an equivalent, try for quarterly coupons.

Get X/n3 in gold or similar commodity (one that you are comfortable with).

Get X/n4 in CCY that is not immediately correlated with USD. GBP CHF etc.

Rebalance the ns every half a year - only should you discover some of the investments are in a bubble (sell, get govt bonds).

Skip the property part if you cannot easily manage an easily rentable property. Get an annuity instead.

Create positive cash flows, cut costs.

Pretty safe, pretty adjustable, pretty self-explanatory.

Now you can rip me apart. Or go to that big shiny building and get the same advice at a steep and exaggerated fee.

Cheers,
b.

[barnakiel]

Party mod:

When you see S&P500 @ 1000 : sell half the bonds, get stocks.

When you see S&P500 @ 750 : sell half the gold, get stocks.

My top picks for the stocks: a) dividend stocks of low debt ratio companies from the energy production and distribution sector: power plants, energy networks, b) chocolate and liquor stocks, c) funeral services.

Have fun investing. Educate yourself. Make love. Use contraceptives.

Cheers,
b.

[denverd0n]

Originally Posted by barnakiel

Alas, this becomes a problem only when you can't tell them apart!

Didn't say it would be a problem. Just said that he would get them. And he has.