EU Investing in the current economy

[manilobino]

Hi,

I’m personally attracted to evidence-based investing, but at the same time I know my knowledge of it is limited - so for the time being I’m following the Bogleheads investment principles - a big portion goes to a widely diversified FTSE-All-World based ETF, with the purpose of accumulating funds, and a smaller portion is supposed to be for providing stability to the overall investment (bonds+cash).

For the ‘safe’ part until now I’ve just been storing cash in the bank account’s current account - which I know is not smart due to the funds being not protecting from bank bankruptcy - but I preferred not to invest in bonds because it would result in negative yield. I’m still looking for a way to keep my ‘safe’ part of the funds liquid, henceforth my other thread about it.

I wonder what do the members here think about this approach as a whole? and what do you do to keep your money safe and growing at the same time?
Would you invest in equities in this economy? What if you’ve already been invested and are at a profit?

Nice day to all!

 

[troubled soul]

Low risk = Low return
High risk = high return.

Keep it in mind.

If I am going understand correcting best option will be

iShares Preferred & Income Securities ETF
Global X NASDAQ 100 Covered Call ETF

Both are not risk free but Giving you kind of 90% risk free income generating method.

Also you can use Famous "split-strike conversion strategy" aka Collar Option Strategy which claimed to be used by Bernie Madoff.
It can easily generate 10-12 % annual yield also protecting your capital also. In reality It works but with billions dollars it does not work (scam by Bernie Madoff). because you do not have counterparty for such trade. this method works in any market. Overvalued or Undervalued. Comparing to S an P 500 where you get annual yield around 10% growth. this method can give your that return in any market condition.
My english is bad you can check here

https://www.fool.com/investing/general/2008/12/18/could-you-make-money-the-madoff-way.aspxhttps://seekingalpha.com/article/111809-split-strike-is-a-valid-strategy-despite-madoff-scandal
Before investing do your own research also.
Just sharing info .
Hope you can find helpfull.

At end of the day do not much worry about inflation. In my personal opinion, to save 1% or 2.5% (inflation ) do not risk your money to to lose 10 To 25 %.

Any government bond etf will works. this type of environment consider emerging market bond also.
When market collapse buy all index at that time .

This time you just needed to be patience .

You are not alone in this situation
Biggest bank in the world JPMorgan has $500 Billion in cash .
Warren buffet has $140 billion plus in cash park in short term government bond and treasury .

Just chill

 

[celizo]

"If I am going understand correcting best option will be
iShares Preferred & Income Securities ETF"

Preferred are between bonds and stocks, but unfortunately when market falls, preferred falls harder than world stocks (i.e. -70% in 2008-2009). In term of risk/reward I prefer world stock index.
https://www.investopedia.com/articl...risks-behind-preferred-stock-etfs-pff-fpe.asp
"In my personal opinion, to save 1% or 2.5% (inflation ) do not risk your money to to lose 10 To 25 %"
If you don't sell you don't loose anything, it's the same for all classes stocks, bonds, real estate, crypto...
With the inflation you are sure to loose.

"Any government bond etf will works."
No, mid-long term bonds are currently risky and without any reward.
Very short-term is like cash holding (except guarantee) in terms of reward, but without the risk of interest rates increase.

"This time you just needed to be patience ."
I know people who wait till 10 years and more.
If they have not invested in april-may 2020, they have already lost a good opportunity.

"Warren buffet has $140 billion plus in cash park in short term government bond and treasury ."
Okay but Berkshire Hattaway has always more stocks than cash and treasury bonds.
Apparently something like 50% stocks/40% cash/10% short terms bonds.
But this allocation shows that the market is currently risky and we need to keep a good portion of cash in case of.

"Biggest bank in the world JPMorgan has $500 Billion in cash ."
about JPMorgan forecasts:
https://blogs.cfainstitute.org/inve...zed-portfolios-with-jpmorgans-2021-forecasts/
"You are not alone in this situation"
Currently it's not easy indeed to choose a mid/long term portfolio allocation.

 

[jakubko666]

Buy canned food. Inflation go up, food prices go up, you can sell your cans. Or eat them and you save on your food cos you bought it cheaper than it is now (in the future).

 

[troubled soul]

"If I am going understand correcting best option will be
iShares Preferred & Income Securities ETF"

Preferred are between bonds and stocks, but unfortunately when market falls, preferred falls harder than world stocks (i.e. -70% in 2008-2009). In term of risk/reward I prefer world stock index.
https://www.investopedia.com/articl...risks-behind-preferred-stock-etfs-pff-fpe.asp
"In my personal opinion, to save 1% or 2.5% (inflation ) do not risk your money to to lose 10 To 25 %"
If you don't sell you don't loose anything, it's the same for all classes stocks, bonds, real estate, crypto...
With the inflation you are sure to loose.

"Any government bond etf will works."
No, mid-long term bonds are currently risky and without any reward.
Very short-term is like cash holding (except guarantee) in terms of reward, but without the risk of interest rates increase.

"This time you just needed to be patience ."
I know people who wait till 10 years and more.
If they have not invested in april-may 2020, they have already lost a good opportunity.

"Warren buffet has $140 billion plus in cash park in short term government bond and treasury ."
Okay but Berkshire Hattaway has always more stocks than cash and treasury bonds.
Apparently something like 50% stocks/40% cash/10% short terms bonds.
But this allocation shows that the market is currently risky and we need to keep a good portion of cash in case of.

"Biggest bank in the world JPMorgan has $500 Billion in cash ."
about JPMorgan forecasts:
https://blogs.cfainstitute.org/inve...zed-portfolios-with-jpmorgans-2021-forecasts/
"You are not alone in this situation"
Currently it's not easy indeed to choose a mid/long term portfolio allocation.

Thanks for your input