Need some investment ideas. 10-15% returns.

[forsale_2007]

Hi Folks,

I’m polling the intellectuals here….I have some stock options that need to be exercised and sold….Does anyone have an suggestions on where I could invest and get about a conservative 10-12% annual return? No U.S. stock market/mutual funds/index funds…need to diversify….

If the U.S. stock market is out of limits, and the housing market is off limits, what else is there? Ideas? Creative suggestions welcome, so long as its serious….For example, in the past, my sis had to collected limited edition wine and put it in an wine escrow to be auctioned later.

[Chris Scoreboard Johnston]

Chris Johnston

Commodities and Futures

[(former)FormerSanDiegan]

“a conservative 10-12% annual return”

This is an oxymoron at a time when CD’s and govt bonds yield in the 5% range.

You will have to assume some risk to get that kind of return. I don’t think the example of your wine futures and conservative fall into the same category either.

If you want to be conservative, shoot for about 8% return
My suggestion: 1/3 cash (e.g. CD or Money Market), 1/3 US Stocks, the remaining third equally divided (~11% each) between 1. foreign stocks/currencies, 2. gold or oil, and 3.other commodities.

If you don’t want to be conservative or you are simply looking for suggestions for that last 1/3 of your portfolio, I would consider Chris’ recommendation a reasonable one.

Maybe it’s just that I am old-fashioned (though not that old) and wouldn’t put my entire nest egg into a single wine basket.

You can learn about what Chris does by going to : http://iamafuturestrader.blogspot.com/

[meadandale]

I have about 15-20% of my portfolio in an international index fund. It has beat the returns in my U.S. index funds so far this year better than 3:1 (>13% ytd versus about 4%).

However, even though it is an index fund, it’s far from low risk which is why I’ve resisted the urge to try and multiply my gains by funneling more money into it.

[HereWeGo]

I’d like to find a muni that invests in US exporters. That would be a big-time winner IMO. Anyone know of such a fund?

I agree that international is a heck of an investment, especially given the strength of the global economy. I prefer low cost munis to index funds, though.

[forsale_2007]

I have about 15-20% of my portfolio in an international index fund. It has beat the returns in my U.S. index funds so far this year better than 3:1 (>13% ytd versus about 4%). However, even though it is an index fund, it's far from low risk which is why I've resisted the urge to try and multiply my gains by funneling more money into it

 

Thanks for the info. Actually, I'm trying to stay away from the entire stock market with this set of funds. The only reason is because as is 80% of all my total assets are already in the stock market in one shape or form (stocks, indexes, mutual) in both domestic and international. And i really don't this next chunk to be also.

I wanted to add additional positions to one particular fund: Vanguard Precious metals, but VPMSX is closed to new investors, and my current stake is in a retirement account- limiting how much I can add to that position.

The commodity market seems kinda risky…But honestly, I have no idea what it's about. I'll have to research that.

 

 

 

[(former)FormerSanDiegan]

Thanks for the info. Actually, I’m trying to stay away from the entire stock market with this set of funds. The only reason is because as is 80% of all my total assets are already in the stock market in one shape or form (stocks, indexes, mutual) in both domestic and international. And i really don’t this next chunk to be also.

That clears up the question I had. You are looking for what to do with an amount that is roughly 20% of your portfolio, not the whole ball of wax.

Here’s a few non-stock things I’ve added in the past year or two to zig when the market zags. These aren’t conservative ways to make 10-12%, but they definitely march to their own beat relative to stocks.

UDN – ETF that bets on a declining dollar
FXY – ETF that tracks movement of the Yen.
DBC – ETF that tracks commodities index
RQI – closed end real estate fund (probably near the end of the cycle on this, but don’t confuse residential RE mess with commercial RE. Commercial RE has remained strong much longer is lagging residential)

[forsale_2007]

About commercial RE….I’m just curious. Do you have any insight on the commercial RE markets? I’m have a small portion Vanguard REIT Index Fund, which I believe tracks mostly commercial. I’m trying to decide whether to get out.

Top holdeings

Simon Property Group, Inc. REIT 6,961,496 $705,129,930
Equity Office Properties Trust REIT 11,021,025 $530,882,774
Vornado Realty Trust REIT 4,293,967 $521,716,991
ProLogis REIT 7,715,527 $468,872,576
Equity Residential REIT 9,158,592 $464,798,544
Archstone-Smith Trust REIT 6,743,946 $392,565,097
Public Storage, Inc. REIT 3,963,024 $386,394,840
Boston Properties, Inc. REIT 3,417,878 $382,392,191
Host Hotels & Resorts Inc. REIT 15,563,531 $382,084,686
General Growth Properties Inc. REIT 6,835,791 $357,033,364
Kimco Realty Corp. REIT 7,077,947 $318,153,718
Avalonbay Communities, Inc. REIT 2,342,892 $304,693,105
Health Care Properties Investors REIT 6,105,327 $224,798,140
Developers Diversified Realty Corp. REIT 3,454,047 $217,432,259
SL Green Realty Corp. REIT 1,558,724 $206,967,373
The Macerich Co. REIT 2,260,380 $195,681,097
Duke Realty Corp. REIT 4,252,488 $173,926,759
Apartment Investment & Management Co. Class A REIT 3,064,974 $171,699,843
Regency Centers Corp. REIT 2,164,021 $169,161,522
AMB Property Corp. REIT 2,782,105 $163,059,174
Federal Realty Investment Trust REIT 1,733,648 $147,360,080
Liberty Property Trust REIT 2,833,586 $139,242,416
UDR, Inc. REIT 4,237,519 $134,710,729
Camden Property Trust REIT 1,774,930 $131,078,581
Hospitality Properties Trust REIT 2,716,065 $129,094,569
Ventas, Inc. REIT 2,946,727 $124,705,487
Reckson Associates Realty Corp. REIT 2,620,543 $119,496,761
Weingarten Realty Investors REIT 2,541,335 $117,180,957
BRE Properties Inc. Class A REIT 1,623,293 $105,546,511
Mack-Cali Realty Corp. REIT 1,964,053 $100,166,703
Brandywine Realty Trust REIT 2,833,729 $94,221,489
Health Care Inc. REIT 2,183,474 $93,933,051
Alexandria Real Estate Equities, Inc. REIT 916,109 $91,977,344
New Plan Excel Realty Trust REIT 3,298,929 $90,654,569
Essex Property Trust, Inc. REIT 692,046 $89,446,946
Realty Income Corp. REIT 3,142,880 $87,057,776
Taubman Co. REIT 1,661,618 $84,509,891
CBL & Associates Properties, Inc. REIT 1,933,140 $83,801,619
HRPT Properties Trust REIT 6,609,865 $81,631,833
Kilroy Realty Corp. REIT 1,019,549 $79,524,822
Nationwide Health Properties, Inc. REIT 2,520,811 $76,178,908
First Industrial Realty Trust REIT 1,410,375 $66,132,484
Colonial Properties Trust REIT 1,373,973 $64,411,854
Corporate Office Properties Trust, Inc. REIT 1,267,883 $63,990,055
Post Properties, Inc. REIT 1,360,551 $62,177,181
Home Properties, Inc. REIT 1,045,231 $61,950,841
Crescent Real Estate, Inc. REIT 3,067,687 $60,586,818
Healthcare Realty Trust Inc. REIT 1,505,051 $59,509,717
Senior Housing Properties Trust REIT 2,419,392 $59,226,716
Highwood Properties, Inc. REIT

[Happy renter]

forsale_2007,
10-15% returns is not considered conservative. If you can take semi-conservative with a little risk, you can consider high yield bond funds with average 10% return.

meadandale,
“I have about 15-20% of my portfolio in an international index fund.”

I have diversified portfolio with good amount of cash flow and my average return was about 17-20% last year. My overseas fund was 45% return last year. 15-20% is a kind low for int’l fund last year and also it falls into high risk category.

[meadandale]

“15-20% is a kind low for int’l fund last year and also it falls into high risk category.”

I know it’s high risk, that’s why I only have 15-20% there. I’m trying not to fall prey to the seven deadly sins of investing….

[Happy renter]

Oh! I’m sorry. You meant 15-20% of your whole portfolio, not the return!

[(former)FormerSanDiegan]

forsale_2007 –

I don;t have any real insight into REITS other than the obvious. A few years ago I bought when they were paying dividends of over 8% (when Money Markets were paying about 2-3 %). Now the REITs have had a pretty good run and the dividends are now not much above MMs or CD’s. Less room for error. A slow-down in the economy would eventually work itself into the holdings of REITS. I have sold some REITS over the last year, but I always plan to hold some in my portfolio to maintain diversity.

[Ozzie]

To diversify I’d suggest looking at experienced hard money lenders to put you in first trust deeds. Many are with developers who are entitling land and need the money for a year or two. You can get 12-18% returns backed by first trust deeds. Look in the major newspapers of any urban area as well as the Wall Street Journal. You should look for LTV ratios under 70% and not put all the funds in one loan. These are NOT subprime lenders. Those guys were doing 100% loans to folks with horrible credit which was a stupid business practice. Hard money lending focuses almost entirely on the value of property so when a problem arises you can sell the property if needed. It’s not a liquid investment, but is a good vehicle for a 1-3 year period.

[forsale_2007]

To diversify I'd suggest looking at experienced hard money lenders to put you in first trust deeds. Many are with developers who are entitling land and need the money for a year or two. You can get 12-18% returns backed by first trust deeds. Look in the major newspapers of any urban area as well as the Wall Street Journal. You should look for LTV ratios under 70% and not put all the funds in one loan. These are NOT subprime lenders. Those guys were doing 100% loans to folks with horrible credit which was a stupid business practice. Hard money lending focuses almost entirely on the value of property so when a problem arises you can sell the property if needed. It's not a liquid investment, but is a good vehicle for a 1-3 year period.

 

 

Thanks for the info.. I'll do some research…

 

 

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