Joakim Persson,

in my honest opinion, one of two situations will arise in the future:
1. the markets are going to be in a long-term secular bear market
like the one from '64-'82.
2. deflation will affect america since, i was told, we are
demographically 10 years behind japan.

do you know what the best investments were during our '64-'82 bear
market?





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darkness39[at]yahoo.com (darkness) writes:
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If you're not talking about a huge amount of money and
are okay with _zero_ liquidity for a full year, US Treasury
I-Bonds might be a better bet. They have a couple of
advantages over TIPS.


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zaladin[at]home.se (Joakim Persson) wrote in message news:<3f01760f.12578136[at]news.lth.se> ...
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Vanguard has an equity income fund (VEIPX?). Which has a decent
record and relatively low costs.

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Vanguard has a real return bond fund which (probably) has lower costs.
There is not much 'skill' in managing a real return bond portfolio,
so you have to go for low costs.

US TIPS have done phenomenally well of late, and will be caught if
long term interest rates rise. Great asset class, but I am not sure
this is the right moment to buy.

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Good call. But 2002, value, having held up quite nicely until then,
tracked the markets down quite badly: value funds I hold went down c.
30%. You are still way ahead v. growth funds over last 3 years, but
not by as much as you were.

In a deflationary environment, it might be growth stocks (ie which can
maintain pricing power due to brand or other factors) which
outperform. This is more or less what happened through much of the
1990s.

On balance, I think (covered) dividend yield is the way to go, but I
am broadly a pessimist on stock markets.

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I think, at least in Anglo Saxon markets, companies are much more
willing to cut their dividends than historically was the case. It is
no longer the case that cutting the dividend meant automatic sacking
of management. The trick is to find well-covered dividends, and the
call is often low PEs (because low PE can mean good cover ie D/P X P/E
= 1/div cover ).

I note Warren Buffet does not think stocks are cheap, but is buying
*lots* of utility assets.


Although sensitive to, for
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The tech stocks are just fundamentally still quite expensive: the
market is assuming margins hold and/ or sales growth returns to
historic levels. Neither is likely. Nor has the expensing of options
situation been fully resolved.

More problematic are stocks like health care, pharmaceuticals, where
the PEs seem much more justified by fundamentals.

Media stocks are interesting, because of their gearing to any recovery
in advertising.

hello,

i keep hearing that the bond markets are over-priced. the 10-year
prior to the rate-cut was priced yielding 3.26% (today, it's 3.51%).

moreover, the stock markets are *way* over-valued. the average p/e
ratio now is 33, and this is more than the p/e in march '00 when it
was 31.

here is my question to you: what are good investments knowing that
the stock and bond markets are over-valued for people with a low
tolerance for risk?

my ideas is still this, but i would still like your insight and
opinions:
1. value stocks paying a dividend
2. TIPS funds like PIMCO's real return (although they are bonds will
hedge inflation).