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CoronitaParticipantI will give you some idea:
Buy Vanguard Total Intl Stock Index (VGTSX)
$20k is not a lot of money to pick individual stocks. I personally will put in it international index and avoid any management fee. The transaction fee for index fund is usually lower.
Min Initial Investment: $3,000
Year to date: 7.92% return
Top holdings:
Vanguard European Stock Index 58.17%
Vanguard Pacific Stock Index 26.13%
Vanguard Emerging Mkts Stock Idx 15.66%Masayako
You know I have had a significant stake in this fund for the past 3 years. And it's been a great three years. But I've actually stopped contributing to international (I haven't pulled out, just stopped adding to my position in this fund). Where I've been putting heavily into is big large cap domestic index funds. I know a lot of folks will probably think this is stupid. U.S. is headed for a decline, companies are going to suck on guidance here, housing collapse etc,etc,etc,etc….
I am considering where the media/general attention is telling you to put money now, and do completely the opposite. The issue that I have with the international indexes is that while their returns have been great over the years (namely due to the dollar decline, not real performance), this can't keep going on forever. The problem that I see now it seems everyone is all over "international investments". Every media is telling you to invest in overseas markets. My rule is that by the time the media is reporting what you should be doing, it's already too late to actually do it. I think the international markets have had their run, and pretty much it's over when Average Joe at the office's water cooler starts to talk about how he's putting money into a International Index Fund because he read about it being "smart" to do from BusinessWeek.
Where I have been building up a position over the last 2 years and will continue to do this this year is in big cap domestic indexes here. It's been pathetic for the past couples years. Don't think these can return that low for that long. Some folks argue that well U.S. business is shrinking. Yes, I would agree. But I've noticed part of the frenzy these days have also been through a lot of M&A activities that's proping these markets (as opposed to IPOs). Big CO's are swallowing smaller CO's (in the process laying off a bunch of people to cut expenses and redundancy)…I think what we are seeing now is just the tip of M&A activities. Also, several of these big companies have been massively buying back their own stock. So while I think there's some merit to the doom and gloom for the real estate companies, I don't see a complete meltdown in the U.S. financial markets: namely because the big I-banks make money in more than 1 way…. The current trend is via M&A deals (and I have several friends are/were M&A Investment Bankers that are having a field day now…Because during the 90's it was mostly about IPOs and not M&A)
So it were me, I'd take the entire $20k and do Vanguard Growth Index Fund Investor Shares. Or, more diversify, I'd do $10k in the Vanguard Total Stock Market Index and another$10k in the Vanguard Total International Stock Market Index if I were to be afraid of missing any further rise in the international markets.
I would also recommend spending $20 and buy the book The 4 Pillars of Investing by William J. Bernstein…Or for the mathematically inclined, his previous book Intelligent Asset Allocator.
You can take a look at the performance of the Vanguard Funds over the past couple of years and see for yourself..if both the stellar international performance and the cruddy domestic large cap performance are really sustainable at their respective levels.
Total Int’l Stock Index Returns
1yr, 3yr, 5yr, 10yr, Since Inception(04/29/1996)
9.62% 18.78% 17.36% 8.66% 7.85%Growth Index Fund (Large Cap Growth) Returns
1yr, 3yr, 5yr, 10yr, Since Indeception(11/02/1992)
7.40% 11.46% 6.25% 6.53% 9.81%One additional caveat. If you are SURE you are going to need to use this money in 2-3 years…You really shouldn’t put all of it into the market at all imho. It should be liquid earning the highest possible return in an almost guarentee-like fashion. First, there is the possibility that all of us at piggington are wrong, and both the international markets/domestic market/precious metal market all have a bad rap over the next 2-3years. Second, you could have bad luck and pick the wrong indexes. Third, you definitely shouldn’t pick individual stocks unless you are prepared that you have a chance of losing this amount. In all my major purchases, I alwyas plan 1-2 years ahead. The funds I need for those major purchases are ALWAYS held liquidable in an insured short term cd/interest account, even though it may be declining due to inflation.
Numerous times, I’ve made the following mistake and personally witnessed others that did the same thing. I looked at a CD/savings account and said, “wow 5% sucks..If I left the money in the stock market up until the point that i really need it, I could be earning like 10-15%…” Well, my dumb luck was that that every time i did this, when I needed the funds, it was always during when the market was “correcting” for some random short term news. So it was actually worse for me to leave in the market, than had I just taken the 5% cd….If you are sure you are going to buy a house in 2 years, I wouldn’t even keep all the “other” 80k in the stock market.
CoronitaParticipantAt least they would pay taxes now :(.
Besides, if they aren’t going to pick the strawberries you eat, who will? You wanna pay $10/lb for strawberries when farmers hire unionized ex-UAW to pick the fields??????
Getting rid of welfare for those who haven’t contributed to the system in the past say 5 years. That would work.
But seriously, do you really expect this to pass????? Nothing is going to get done until election. This is the best time for the financial markets imho. The only gripe i had was that the republicans had 1 shot at getting rid of the estate tax. And they blew it. Now I have to figure out other ways to shelter what I earn away from all the welfare/taxes/subsidies/credit drenched/financially irresponsible american that always scream bailout when they f* up their own finances.
CoronitaParticipantAt least they would pay taxes now :(.
Besides, if they aren’t going to pick the strawberries you eat, who will? You wanna pay $10/lb for strawberries when farmers hire unionized ex-UAW to pick the fields??????
Getting rid of welfare for those who haven’t contributed to the system in the past say 5 years. That would work.
But seriously, do you really expect this to pass????? Nothing is going to get done until election. This is the best time for the financial markets imho. The only gripe i had was that the republicans had 1 shot at getting rid of the estate tax. And they blew it. Now I have to figure out other ways to shelter what I earn away from all the welfare/taxes/subsidies/credit drenched/financially irresponsible american that always scream bailout when they f* up their own finances.
CoronitaParticipantGood points rustico. What people don't get is that sure housing may be down 10-20% over the next few years but interest rates will be up couple percent so what happens? A complete wash. The decrease people will expect for their monthly payments due to a cheaper home won't happen because the higher interest rates will bring the payments back up.
Yes, the clock is ticking. The issues that I see is that is that even though home prices are falling,inflation is creeping up pretty fast (despite what the gov is telling you). Also, mortgage rates aren't going to stay this low, especially when gov starts to tighten…That and the dollar keeps falling. So i think the idea of just "saving" to buy a home in the future might have issues unless you're also actively trying to keep your saved dollars above inflation and the dollar's decline.
CoronitaParticipantGood points rustico. What people don't get is that sure housing may be down 10-20% over the next few years but interest rates will be up couple percent so what happens? A complete wash. The decrease people will expect for their monthly payments due to a cheaper home won't happen because the higher interest rates will bring the payments back up.
Yes, the clock is ticking. The issues that I see is that is that even though home prices are falling,inflation is creeping up pretty fast (despite what the gov is telling you). Also, mortgage rates aren't going to stay this low, especially when gov starts to tighten…That and the dollar keeps falling. So i think the idea of just "saving" to buy a home in the future might have issues unless you're also actively trying to keep your saved dollars above inflation and the dollar's decline.
CoronitaParticipantSpend it!
It will be worth much less a year from now!
That would be the typical American thing to do :(.. Spend whatever money we have left over.
Anyway, my advice is that it's basically $20k. Put it into a index fund. Anything less won't keep up with inflation, and if you have only $20k to invest freely, it's probably not enough to buy a basket of individual stocks. If you just bought 1 stock, you'd be assuming a lot of risk unless you don't mind potentially losing a chunk of it. If you have less than $100k working cash, you really shouldn't be buying individual stocks imho.
CoronitaParticipantSpend it!
It will be worth much less a year from now!
That would be the typical American thing to do :(.. Spend whatever money we have left over.
Anyway, my advice is that it's basically $20k. Put it into a index fund. Anything less won't keep up with inflation, and if you have only $20k to invest freely, it's probably not enough to buy a basket of individual stocks. If you just bought 1 stock, you'd be assuming a lot of risk unless you don't mind potentially losing a chunk of it. If you have less than $100k working cash, you really shouldn't be buying individual stocks imho.
CoronitaParticipant…and you know what? Pretty soon some members here are going to start griping about how they missed the stock market swing just like they’ve been griping about how expensive homes are 🙂 🙂
There no point in fighting the market. It is what it is. If you think the financial markets are crazy here, look at what the chinese and indian stock market have been doing. The chinese market has nearly doubled in the in the past couple of months. That’s what I call a house of cards that can easily topple.
Anyway, you’ll see a pattern of retailers emerge. Those retailers that cater to low income folks (such as walmart) will probably have rougher days ahead. Also, home improvement will probably have rough days ahead…Because frankly, folks in the low income will probably get hit hardest with this inflation and espectially with the simple home-as-a-piggybank evaporates. Those retailers that cater to high income folks will probably have great earnings (Sak, Nordstrom, Tiffany’s etc).
CoronitaParticipantFLU, Again you are debating yourself. The decline isnt starting in CV. It started 18 months ago. Last year prices declined quite significantly between Winter and Spring. This year prices in Late Spring are flat from prices in the Winter. This wasnt the case last year. There probably arent enough data points for a real solid statisical analysis but that is what I am seeing along the NC coast. Once he get into August, demand should slow down and prices will suffer. I have never said anything different. BTW, under $700K there are 3 active lstings and 4 pendings
I think I was smoking crack when I was replying to you yesterday. I've reread what you said and see your point 🙂 Sorry about that.
CoronitaParticipantAlso, recall my posting about folks being on crack…Well, here’s another one @Crest that was a short sale. I believe it’s still available (although I could be wrong)….
http://sandiego.houserebate.com/search/homeview.asp?id=1630935&p3=-1&ix=59
CoronitaParticipantFLU, I'm not commenting on the attached market because I really dont follow it all that much. I focus on the SFR. CV is defintely overbuilt with condos relative to toher coastal areas. Beleive it or not, the same size townhome is as or even more expensive in Encinitas than it is in CV. Regrading pricing, you just agreed with me. I said prices have flattened and should creep down little by little. Read my posts again.
Palacio IS a SFH development near the 5/56 interchange. And it's seen it's fair share of big misses. Also Sausalito is SFH too. Take a look at those peak prices and compare that to current Sasalito listings.
I'm pointing out that the decline is starting in CV, starting first with the less desirable locations and developments in SFH and also all attached homes….
Speaking of which, I was visiting a friend today at Crest in Carmel Valley. Thought I'd share two pictures that I thought was interesting. (Folks, pleae don't crack open the wine for this..I’m sure the sign is more of a marketing/hype to pump up interest at this point because rarely are real FC so blatantly advertised.)
[img_assist|nid=3409|title=crest1|desc=|link=node|align=left|width=466|height=350][img_assist|nid=3410|title=crest2|desc=|link=node|align=left|width=466|height=350]
CoronitaParticipantOther SD Realtor here. Funny you mention Crest at Del Mar. Had a listing appointment TODAY with an owner there. She bought back in 2004. She paid 495k and has the 3/2.5 floorplan, I think around 1271 sq feet or something like that. I showed her the chronology of what has happened there. By mid 2005 prices for her floorplan had shot up to the mid to higher 500's. Then in 2006 they started coming down FAST. The last sale of her floorplan was 10/06 and it closed at 460k! She was still thinking she could get mid 500's.
First I'm fat and lazy, not SD-Realtor. Second, I think your potential client had a 2 bedroom, not three. There is no 3/2.5 1271sqft at Crest. The mid 500ks sound consistent with what 2005 would be. But truthfully, I didn't follow anything smaller than 3/2, so I don't remember.
CoronitaParticipantJust ran a quick report on CV ZIP (92130) for the last 4 days. 1 New Listing 2 Fell out of escrow 8 Went into escrow 3 closed escrow Does that look like a weak market to anyone? It looks pretty hott to moi!
sdrealtor, I don't have access to get real sales history since I'm not an agent. But do me a favor.
Please search for sales history on all Crest at Del Mar Townhomes in 92130 since 2004. The address should be 124XX 125XX , 126XX, El Camino Real on 3 bedroom places.
There's basically three floor plans: 3bd/2.5bath 1533, 3/2.5 1564, and 3bd/3bath 1584.
The 1533 and 1564 sqft plan sold at peak between $620k-$640k (depending on upgrades).
The 1584sqft plan saw $660k-$70k if i remember.
Current sales history are as follow:
12559 EL CAMINO REAL E 92130 571,000 3 3 1584 360.48 1998 2/13/2007 12611 EL CAMINO REAL E 92130 575,000 3 2.5 1564 367.65 1998 1/18/2007 12545 EL CAMINO REAL F 92130 605,000 3 3 1584 381.94 1998 3/27/2007 Nothing wrong with this complex. It's actually quite nice imho. Just it appears it's softening. Also, it didn't help that around that place Pell Place went up, Carmel Pointe and the Heights converted.
Also pull up sales history for Palacio. Those home have fallen too if i recall.
..I have not seen a great hemoraging in SFH in Torrey Hills (yet). Some people overpaid possibly at Sausalito (I recall 1-2 folks paid over $800k for these homes in 2005).
Also, note: I’m not one of these folks who are disgruntled either way. I bought here in 92130 in 2004. And you know what I don’t care if my home falls 20-30%+ because I can afford it and it satisfies my material needs. Yes, I would love for a sucker to offer $1.3million for my place, but I don’t think anyone can deny that prices are flatlined here and attached homes/and some sfh in crappy locations have started to weaken. I can say this because even as current owner, I go to about every open house in the TH area when I can.
CoronitaParticipantsdrealtor,
5357 Carmel Knolls IS right in the heart of CV! Don't think that you can just make everyone ignore it by putting the spotlight on the Pacific Highlands Ranch listing. Huntington Heights (where 5357 Carmel Knolls is) is right in the heart of CV, your basic Pardee development built in 1995 and right around the corner from Sonoma. A $200K loss is pretty significant, wouldn't you say?
I'm also aware of two very painful short sales over the last few months in CV, one in Lexington and the other in Barratt's Paso Fino up on Del Mar Ridge. Plus an ugly bank sale on Durango in Del Mar Heights.
This is just beginning to scratch the surface. Sure, there are still some sales happening in CV, but it is incredibly slow compared to what it was. CV is showing definite signs of increasing weakness. It will be interesting to watch what happens as we move later into the year.
New_Renter
I live here. I can definitely say, prices are flat, and showing signs of weakness. Less prime locations are showing more weakness, particularly townhomes. If you search on Crest At Del Mar off of El Camino for example, peak for a 1533 sqft 3b/3b place was about $620k. Recent closings have been around $570-$580k. At first, I thought it might be due to location of these units. But some of these units location is fine.
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