Getting into the financial markets

[scooterbug44]

I like stocks, because you can buy them and forget about them - no maintenence, property taxes, HOA meetings, assessments etc.

It should go without saying that you should only be investing cash you have, not leveraging.

5 years is pretty short though, considering current volatility.

 

[6thGen]

Cash purchase, and sophisticated capital is making bets now that could offer a 100% return in 5 years. That's not going to be from looking on the MLS, but there is potential depending on the seller. On a conservative side, I think you could yield 10% per year, gross. I know you'll scoff, but I believe that lots north of 30a that sell for $100M could easily be worth $160M in 5 years, but I'm betting on a languishing Dow for that time period as well.

 

[SHELLY]

Cash purchase, and sophisticated capital is making bets now that could offer a 100% return in 5 years. That's not going to be from looking on the MLS, but there is potential depending on the seller. On a conservative side, I think you could yield 10% per year, gross. I know you'll scoff, but I believe that lots north of 30a that sell for $100M could easily be worth $160M in 5 years, but I'm betting on a languishing Dow for that time period as well.

What was the "bubble price" on these lots of which you speak?
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[6thGen]

What was the "bubble price" on these lots of which you speak?
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I'm using $100M as easy math, but to remain consistent, say $425M.

 

[rancid]

I don't think that we have quite enouh information , but some people have made some good attempts at obtaining it. . As such, this is not really advice, but some things to consider.

As far as buying a lot, you did not mention whether you were financing or not. If a leveraged asset falls in price, you can lose all of your investment and then some. If you really did need to sell it in five years, you are taking a risk.

As for stocks, I have begun to look at 10 years as a minimum horizon for a wel-diversified portfolio, since I have witnessed some 5 year periods with significant negative returns. Anything that I felt I needed for college funding, I would keep in bonds.

If I were to truly give advice, I would want to know your ability to accept loss, you overall financial situation, emergency funds, retirement funds, et...

If this is "play" money, and you can risk it, then follow your own counsel. Real estate and stocks are apples and oranges to say the least. For money that I need, I look very long term, but if this is money that you can risk, you might get quite a pop in the stock market in the near term. I think it will be crazy with volatility for a while, so you had better have a strong stomach.

It is interesting to note what people are considering long term horizons for the market. 10 years seems like a long time. That does not seem like much faith in the market. It makes me feel like CDs would be better if that is the type of horizon one needs to have to get into this market.

 

[scooterbug44]

No, it isn't a lack of faith - I was raised that you invest in the stock market for the long term and make sure that your risk level is always acceptable. They want their money back/increased by a deadline so their kids have money for college - you don't mess with your kid's education money!

 

[rancid]

No, it isn't a lack of faith - I was raised that you invest in the stock market for the long term and make sure that your risk level is always acceptable. They want their money back/increased by a deadline so their kids have money for college - you don't mess with your kid's education money!

I guess you are right. My experience with the market has been over the last 10-15 years and I can tell you that is not the usual sentiment I get from broker and insurance friends. They like to consider 5 years a pretty safe window. They come up with graphs and historical data about business cycles and the like. I think you might be right that it is a new time in market behavior for individuals of my age group.

 

[SHELLY]

I can tell you that is not the usual sentiment I get from broker and insurance friends. They like to consider 5 years a pretty safe window.

...that explains why they're still eeking out a living as brokers and insurance salesmen trying to shoehorn feckless marks into inappropriate investment vehicles like front-load mutual funds and whole life insurance policies.

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[SHELLY]

I'm using $100M as easy math, but to remain consistent, say $425M.

...so what did the previous owners of these lots believe their investment would amount to in 5 years?

.

 

[TooFarTampa]

How bad do you want that lot in Grayton? If it is something that, on your proverbial deathbed, you think you might regret that you didn't have, I would think it would be worth spending this winter searching for just the right spot.

If you decide beach ownership is too much hassle and not enough liquidity, I might consider breaking the cash into chunks and either investing it into the market a month or two at a time (Friday may have been a good day ), or spread it into various investments, including CDs. No reason that you would have to put it all into the market on one day or in one fund.