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Looking for advice on alternative Investment Ideas

#1
Dear ourdebtfreelives Community, I am considering an early retirement and looking for capital investment diversification to help generate a healthy income that will sustain my lifestyle and pay kids college tuition few years down the road.

Besides the stock market and 401K, what are some of the alternate investment opportunities that have proven to generate good short and long term returns for the veteran investors out there?
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#2
Real Estate......it produces current income that at the very least keeps up with inflation and there is price appreciation on the asset. As with everything, buy good quality assets.
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#3
On the bulk of my holdings, I am getting 2.54% with an under a year duration with much of that Near Cash.
 
I am converting a vacation home into the rental because it should have a net return of around 7.5% on its basis.  (for years - there is nothing I can find in NY that has any kind of ROI, even in FLA if my basis was not so low it would not pay to rent the property; also in FLA a great percentage of the folks buying are doing so in cash - and there is a positive flow of people against a limited pool of quality properties)     In some places like Venezuela real estate is an inflation hedge.
 
My recent adds in preferreds and BDC's are a bit more jiggy but its a small percentage of my total portfolio.   It's a way for me to add duration and also to seek spreads in interest rates.
 
In an over the weekend flip.. based on feedback on this chat board... I reversed the recent purchase of a REIT fund even though it was a de minimus addition.
 
IMHO it boils down to an evaluation of what is priced correctly to risk (risk/return).   Also what is going to get whacked via interest rate changes and convexity.
 
 
SPREADS -   I cannot build a spread where I am borrowing with long duration and lending (on a secured basis) with a short duration.    To me, that is the ideal allocation at this time.    (to some extent Real Estate may do this if you borrow long and rent short - I never borrow to buy real estate)
 
Some BDC's do this.   There are lots of companies doing the exact oppositive by borrowing short duration and investing in long duration.
 
Rates have moved on Near cash from 1.65%+/- to 2.5% in a short time which is of huge impact.     The impact of the 10 years moving to 6% or more would be a potential loss-causing event of epic proportions.   I don't think that is happening now but it is something to be aware of.
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#4
Lucas I wouldn't be in a rush to look at RE in Venezuela just yet....the dictator is still there and people are abandoning the country.....just another story of what socialism can do to a nice place. You mention that a great many people are buying in cash....to me that is the only way to go for an investment other than maybe your own home.....Would anyone borrow on margin to buy a stock because it has a good dividend? Probably not.....the margin interest will severely cut into your profits. If you are going to invest, then invest cold hard cash.....collect the dividend (rent) and enjoy the appreciation on the asset....and like I always say.....buy good quality assets at a good price......if you overpay.....you can still lose money. This applies to stocks and RE alike.
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#5
(11-21-2018, 11:06 PM)FIREin2018 Wrote: Lucas I wouldn't be in a rush to look at RE in Venezuela just yet....the dictator is still there and people are abandoning the country.....just another story of what socialism can do to a nice place. You mention that a great many people are buying in cash....to me that is the only way to go for an investment other than maybe your own home.....Would anyone borrow on margin to buy a stock because it has a good dividend? Probably not.....the margin interest will severely cut into your profits. If you are going to invest, then invest cold hard cash.....collect the dividend (rent) and enjoy the appreciation on the asset....and like I always say.....buy good quality assets at a good price......if you overpay.....you can still lose money. This applies to stocks and RE alike.

The rich folks in VZ are rushing to (have no choice as a hedge to hyperinflation) buy real estate as to preserve capital.
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#6
thanks for your detailed response. I am curious what your rational is to never borrow to buy real estate?

Isn't that cash (used to buy real estate) better off in the investment market while you borrow on the rentals?
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