FLU: I wish I had an answer, I honestly do. I’m completely out of the market presently, but that’s because every spare dime is going into my business to finance engineering and design costs. Business is booming (no pun intended; I’m in blast engineering), but that’s more a function of the times than anything else.
I’ve got friends in banking, finance and accounting, and all of them are advocating different approaches to investing.
When I invested seriously before (personally and institutionally), I was a devoted advocate of Ben Graham and value investing. I will tell you that I stayed away from stocks religiously and played for years in the bond market. I wasn’t looking to be a world beater, but to maintain a consistent return net of inflation and any costs of funds (institutionally). In this regard, I considered myself successful, generally returning between 4 – 6% total net return.[/quote]
Actually that helps. See in my more youthful years, I took the advice of colleagues and friends to try to “speculate” in higher risk items. The rationale was that if I wipe out when I’m young, I still have a ways to go to make up the difference. It sometimes worked, sometimes didn’t. Now, I’m beginning to realize that I’m not as young as I use to be…Hence, I’m starting to think even more cautiously now. There were times when I use to think 4-6% was a joke…I’m not laughing anymore.
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FLU: I spent years being derided by stock jock hotshots and M&A cowboys talking about 30% annualized returns on invested dollars. These guys never last (when is the last time anyone heard from Stockstradr?). Slow and steady is the way to go, but also be prepared to be opportunistic if the right deal presents itself.
There are deals out there and I’ve been eyeballing some small- to mid-cap companies that are solid, but experiencing cash flow difficulties. I have a friend factoring money into military/federal contractors on government projects and he’s turning about 2% PER MONTH net of costs. It’s risky as a mofo, but cash is king right now.
