I’m probably preaching against the choir here, but I’ve become quite disillusioned with the stock market. It seems to no longer have any correlation to reality (assuming it ever did). Other than real estate, what are other good avenues to explore?
You must log in or register to comment.
The stock markets goes up and it goes down, it just do that sometimes.
In a high interest environment such as now, Guaranteed Investment Certificates are a solid choice. Over the long term it is typical to expect a 4% growth rate in investments. Right now even the big banks are offering 100 to 500ish day GICs for around 4% interest, and some other banks are offering north of 5%. It’s worth looking into.
GICs are probably the safest way to go right now. 5% beats inflation, at least now (and it helps if the GIC is in a tax-free savings account). The bank where I’m at offers these high rates for 1-year (5.25%) and even long term (5% for 5 years and 4.25% for up to 10 years) but I’m not brave enough to lock money for that long.
The stock market isn’t pegged to reality, it’s pegged to perception and money supply. There is no “ground truth” in the market except the total amount of money that could be invested in it.
The stock market has never been designed to directly reflect value. In fact, none of our capitalist mechanisms directly reflect value (see: grocery prices).
Still, long-term trends tend to hold. If the economy is doing well, the market rises because more money flows into the market.
High yield bonds is probably the closest. You might be interested in options, but it’s probably less linked to reality than stocks. Buying a franchise or starting your own business would probably be closer.
I can’t stop reading your username as Invest or Sex Change
I’m glad you see the humour. Disclaimer: I’m not affiliated with the Investors Exchange.
I’m taking an indefinite break from investing, I’ve just been putting extra savings in I-Bonds or CDs, though right now those aren’t much more than high yield savings accounts.
If you’re feeling pessimistic, buy gold. Actual gold, not shares of PHYS or something.
First, pay off your debts, that’s guaranteed returns by reducing the cost of interest.
Second, rethink the market. If it’s volatility that’s the problem you think you’re having, there are ETFs that are ‘covered calls’ that have slightly lower volatility, but have higher returns because they’re doing options trading (i.e. profiting from gamblers who pay to gamble).
Third, if you can’t find anything on the markets, you’re stuck with GICs and term deposits and government backed savings bonds. The returns are meager most of the time, and there’s no guarantee you’ll earn more than inflation.
I’m not sure what you mean by “It seems to no longer have any correlation to reality.” Are you saying you can’t predict when to buy and sell? I don’t think you can beat it for any long-term investment strategy except by being really lucky.
The alternatives are things with low risk and generally lower returns, like bonds or CDs, or things that also have risk, like precious metals.
LoL! I can’t think of any. The closest to the real estate market is crypto.
Just like the stock market, it’s all speculation and what’s the next stupid ass thing Elon Musk is going to do or say.
I think crypto is significantly less legitimate than the stock market.
On some level, publicly traded companies have tangible value (buildings, machines, people, client lists, patents, etc.). Whereas crypto currency has never had any tangible value, it’s all just been a gamble on whether the technology will catch on—backed by an insane hype machine driven in no small part by “rug pulls”, Ponzi schemes, and pump and dumps (if the guy from the Wolf of Wall Street is in on it, run).
Once crypto catches on as a mainstream payment method in a class with debit, credit, and PayPal I think it might make sense to think of shares in the exchanges and/or settlement networks as investments.
However, buying coins to hold in case the line goes up doesn’t seem like a credible investment strategy to me.
Once crypto catches on as a mainstream payment method
‘Once’ implies a degree of certainty that isn’t warranted. ‘In the unlikely event that’ is a more realistic replacement
I would tend to agree, but I spent most of an entire comment shitting on crypto, and I was trying to throw the crypto bros a bone.
Besides, whether crypto will catch on eventually is immaterial to the fact that buying and holding coins is an atrocious facsimile of an investment strategy.
