2006-06-23 08:30:13 · 3 answers · asked by stevenpdk2000 1 in Business & Finance ➔ Investing
The "best" return would probably not match your risk level, e.g. futures and options.
What is your definition of Long-Term? If you had bought anywhere around the 2000 high in the stock market, you would still be waiting to get even after six years, and wouldn't mind waiting another seven years to make a profit if you are truly a "long-term" investor.
The "Buy-and-Hold" strategy really doesn't hold water if you consider it depends on when you "buy." You might go 25 years without a profit, if history is any guide. But if that is your deal, then go for it.
Otherwise, you have to consider that the Dow has again failed at that all-time historical high set in Jan 2000 at 11,721. Looks like a Double Top to me, but some people say we could double that again. Logically, this is one of the scariest markets I've ever seen in two decades of watching it; just pick something that is stable, anything. Doesn't exist, does it? Anything could send this market over the edge to the great void. But hey, it might double too, who knows.
For most people, the name of the game is capital preservation. You don't invest or you get out when the market gets too risky or too frothy or is nearing a market top or an old market top, or when the market is overpriced, or unstable, and all of these things are true today. There really is a time when cash is King. That 3.5% CD is going to look pretty good when everyone else is cryin' in their beer about losses. Or the market could just go sideways to work off the excesses, but either way, you're safe if you're out. Wanna throw the dice, go to Vegas.
Calling someone a "Market Timer" whom manages risk by getting out of the market is like calling a Jaywalker a terrorist. Additionally, most people think there is only one side to the market -- the Up side. Sell short an ETF and play the downside, and quit listening to the "experts" who want you to give them your money so they can get rich "investing" it for you. This is not my idea of "investing." Investing is something active that you manage. "Buy and Hold" does not fit this description.
If you wish to research the “Buy and Hold Strategy” further, or perhaps trade yourself, I recommend two book titles. One is called "Which Is Better, Buy-and-Hold or Market Timing?" The other is "Do You Have What It Takes to Be a Market Timer?" They will give you plenty to think about.
2006-06-23 09:06:56 · answer #1 · answered by dredude52 6 · 0⤊ 0⤋
Several choices spring to mind. Depending on how long you are willing to let the investment sit...
Choice #1: Real Estate is a good choice, especially if your property value increases. Live in it for more than 2 years and you don't have to pay taxes on profits up to $250,000 if you're single, or $500,000 if you're married and file jointly.
Choice #2: I already own a home so I invested in Life Settlements. I am steering clear of the stock market and commodities because there is too much uncertainty in the market right now. This investment is not liquid, so prepare to dump your money into it for at least 4-5 years. It offers good returns and is relatively low risk.
Choice #3: Start a business with that capital or invest into one that you are reasonably sure that will do well. Look for "Angel Investor" groups that might offer membership. They typically get approached by small businesses looking to expand or grow and need investment. Not a bad place to get in on the ground floor of a business.
Those are my top 3 choices. Good luck! I hope that helps.
PS. If you are interested in Life Settlement investing, please feel free to contact me.
2006-06-23 08:38:09 · answer #2 · answered by Sugarbear 3 · 0⤊ 0⤋
I suggest you to open a brokerage and margin and options account at TD Ameritrade and invest in the Stock Market with the help of a Portfolio Manager like myself if you can afford it or at least a Financial Advisor.
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2006-06-23 09:59:19 · answer #3 · answered by Anonymous · 0⤊ 0⤋