Message Font: Serif | Sans-Serif
No. of Recommendations: 1
I am not restricting myself to only equities but looking at all asset classes. For example, I can buy rental properties and use rental cash flow to pay the mortgage and I think, you can look for low single digit returns now and low single digit price appreciation.

At this point of housing cycle I can be reasonably certain the price fluctuations are not going to be beyond 5%. Ofourse you can argue unlike equities you don't see the quote every day so you don't really know the drawdown or volatility.

This is just one example.

While 30% drawdown may seem normal but for my retirement funds that is unacceptable, especially when I am looking at the entire portfolio.

I don't have exhaustive study to prove but volatility is not really required to generate above average returns and especially average returns.

My IRA accounts for the last few years haven't experienced more than -3% swing per quarter or month and has achieved over 8% return annually. All the while I have maintained a minimum of 20% cash. Of course this required active management. That is what I am trying to avoid.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.