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URL:  http://boards.fool.com/im-not-looking-for-no-market-risk-i-could-20848922.aspx

Subject:  Re: Future balloon payment Date:  6/2/2004  9:00 PM
Author:  Loren10 Number:  10224 of 35357

I'm not looking for no market risk. I could achieve "no market risk" by just paying off the mortgage now. A 5% to 7% return requires some risk (obviously).

A straight equity investment (such as a no load index fund) would theoretically yield a 10% return over the long run, but the variabily of such an investment is too high for what I have in mind and a 5 year time frame is too short to reasonably target a 10% return overall. A common stock equity investment would however defer taxes until I cashed out the investment (assuming capital appreciation and no dividends) and it would generate a long term taxable gain.

A 5% to 7% return on an "equity" investment would be a relatively "safe" return by market standards (half the long term average return on US stocks). I'm just looking for ideas here. Preferred stock? Asset backed securities? Hedged equity investments?



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