Quote:
Originally Posted by DETRoadster
Why do you say real estate is beyond the scope?
I definitely agree with you on the rest. Timing the market is problematic at best. My situation is that I'm 43 and still hanging onto a risk profile that I had when I was in my 20s. I rode out the last crash, exactly as you suggest, and have now amassed a pretty significant nest egg. I guess I'm approaching this from the perspective of re-balancing to "lock in" some of those wins and ratchet the risk profile down a notch. Certainly I have time to ride out one or two more crashes during my career but I do feel the pressure of father time creeping in as I consider how long it took to rebuild wealth after 2008.
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Thats more of an asset allocation question than a timing question. Going into different types of investments with a lower risk/return profile makes sense there. My view is that even in the worst crash in recent history the market recovered its pre-crash high in about 5 years.
On real estate, i was assuming the "market" is stock market. I just did my first rental property, so I'm learning the ropes there, but the annual cash flow (after paying the mortgage, taxes, and insurance but excluding mortgage equity, tax advantages, and property appreciation) is a ~15% ROI - and thats before I do my cash out refinance.