Let's talk about the next impending economic crash.

[Muse]

Seems too casual. We have 3 separate decades in the last 80 years where the stock market traded sideways for the entire decade, and stocks underperformed bonds during that entire period. Makes no sense to just sit in index funds and collect a 2% dividend with no capital appreciation for an entire decade at a time. Dalio's all weather fund makes more sense.

I like the idea (and practice) of backtesting any strategy before implementing. Of course, that's no proof it's going to work best or work out at all, but it should provide some confidence. The data and charting software online make backtesting possible.

 

[Muse]

Putting it all in Index funds, and ignoring it until you're retired?

And what do you do when you're retired?

 

[[DHT]Osiris]

And what do you do when you're retired?

Hope you die before it runs out, same as most retirees that don't have millions

 

[Muse]

Hope you die before it runs out, same as most retirees that don't have millions

Oh, come on, just sit on your cash and hope? WTF is that?

 

[[DHT]Osiris]

Oh, come on, just sit on your cash and hope? WTF is that?

Sorry, I was working from the standpoint of a person that probably won't realistically have enough to 'live off the investment returns'. Basically winding down the money pool as slowly as possible.

 

[Muse]

Sorry, I was working from the standpoint of a person that probably won't realistically have enough to 'live off the investment returns'. Basically winding down the money pool as slowly as possible.

Even doing that you're whittling down your nest egg and have to consider what you do with that. There's another thing to consider: Most people don't have a good idea how long they are going to live. What suffices for one person might not suffice for another. Most people don't want to die on the street!

 

[[DHT]Osiris]

Even doing that you're whittling down your nest egg and have to consider what you do with that. There's another thing to consider: Most people don't have a good idea how long they are going to live. What suffices for one person might not suffice for another. Most people don't want to die on the street!

Very true! I'm banking on climate change taking me out before post-retirement money concerns are a thing.

 

[alcoholbob]

It's probably too late to get into real estate. The market is high in most areas or at least back to where it was pre-2008. You would be buying high, adding more money to fix it up and then you can't sell it if the economy crashes like 2008. You can rent but when the economy crashes even renters can't afford reasonable rent so then you have the house sitting there while you are paying a mortgage, property taxes, insurance and maintenance. When your mail person tells you about how many houses they bought and are renting them out you need to get out of real estate. In the Tampa Bay area all of the professional house flippers are either buying the few properties at decent prices that are left and then turning around and selling to new flippers without remodeling or they are making money giving advise to new flippers. My wife and I bought a second property several years ago as an investment and for vacations since it's near the beach. The seller bought it in 2005 from a flipper for several hundred thousand more than he sold to us. We might be able to rent it on a short term basis to pay for property taxes and insurance for the few people who can afford a vacation in an economic crash.

Baby Boomers will be selling their larger homes for smaller homes if they can get one for a reasonable price so all of those homes they are selling will be flooding the real estate market and make things even worse.

But, like you said, if you are smart and you really know what you are doing then you may come out ok in real estate in the current environment.

You can buy into REITs without that much capital--stocks that pay out rental income to investors. You can buy an index like VNQ or individual stocks like Realty Income or EPR properties or BRG. Most REITs are dividend stocks that trade counter cyclical to broader market stocks--they tend to go up during recessions because they are treated as bond proxies. They also tend to provide better returns than bonds. It's one way to diversify a stock/bond portfolio.