Topic: Recommend me some low-risk inflation beating investments. (Read 2231 times)

Quote from: ShakyhandsBTCer on June 18, 2014, 07:01:56 PM

I'm looking to invest £5k into something that will outperform inflation. I already own BTC, and want to diversify into something low-risk, low-return - anything above 5%/year would be OK.

Buy forest. It has predictable returns overall (in decades) above inflation (even if not managed intensively) and is really low risk if bought at reasonable prices. However you have to have knowledge in forest management.
It also offers recreational benefits.

What a great suggestion! I'd definitely take a piece of forest over stocks/bonds/paper promises any day as well.

The great thing about a piece of land like a forest is that not only will you have a retreat if/when shit hits the fan, you can also sell firewood! Each tree is like a stack of bills Grin

In order to sell your trees you will need to spend some amount of money in order to cut down, transport and sell the trees.

Not sure where would I buy a tree investment and how much fixed cost land and property tax transport when the trees mature would it cost over the amount returned as an investment

That said it seems like a nice idea since it helps provide clean air while maybe making a bit of a return.

I think that there are some tree farms in Canada.

Swordsoffreedom

legendary

Activity: 2884

Merit: 1115

Leading Crypto Sports Betting & Casino Platform

Quote from: DurbanPoison on June 18, 2014, 05:34:05 PM

Quote from: IIOII on June 23, 2014, 06:55:15 PM

I'm looking to invest £5k into something that will outperform inflation. I already own BTC, and want to diversify into something low-risk, low-return - anything above 5%/year would be OK.

Buy forest. It has predictable returns overall (in decades) above inflation (even if not managed intensively) and is really low risk if bought at reasonable prices. However you have to have knowledge in forest management.
It also offers recreational benefits.

What a great suggestion! I'd definitely take a piece of forest over stocks/bonds/paper promises any day as well.

The great thing about a piece of land like a forest is that not only will you have a retreat if/when shit hits the fan, you can also sell firewood! Each tree is like a stack of bills Grin

In order to sell your trees you will need to spend some amount of money in order to cut down, transport and sell the trees.

Not sure where would I buy a tree investment and how much fixed cost land and property tax transport when the trees mature would it cost over the amount returned as an investment

That said it seems like a nice idea since it helps provide clean air while maybe making a bit of a return.

sed

hero member

Activity: 532

Merit: 500

I'm not an expert, but I think that if you are looking to significantly beat inflation, then you're going to incur more risk. Likewise, the lower the risk, the lower the reward. I really think the best bet these days is just to hold your bitcoins, they should beat inflation bigtime if predictions are correct.

wachtwoord

legendary

Activity: 2324

Merit: 1125

Quote from: wachtwoord on June 23, 2014, 05:56:39 PM

Quote from: cosmicapex on June 23, 2014, 01:26:06 PM

Quote from: wachtwoord on June 20, 2014, 06:45:08 PM

Quote from: ShakyhandsBTCer on June 19, 2014, 07:53:00 PM

Quote from: wachtwoord on June 18, 2014, 07:03:45 PM

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.

10% APR is anything but low reward. It is low risk though Wink

It is not low risk in general. It depends on the time you buy. Even if a broad index fund flattens out the risks of individual stocks, a general market crash can generate great losses that will not be regained for decades (inflation-adjusted) if you bought near a market top.

It's important to buy cheap. The stock market valuation is not favourable at the moment - stocks are overvalued. Buy after the next crash.

The thing with buying the index and your holding period is 100 years: it doesn't matter when you buy

I prefer to hold individual companies but I understand not everyone can or wants to do this so index is perfect for them. Don't try to time the market. You will fail.

IIOII

legendary

Activity: 1153

Merit: 1012

Quote from: wachtwoord on June 23, 2014, 05:56:39 PM

Quote from: cosmicapex on June 23, 2014, 01:26:06 PM

Quote from: wachtwoord on June 20, 2014, 06:45:08 PM

Quote from: ShakyhandsBTCer on June 19, 2014, 07:53:00 PM

Quote from: wachtwoord on June 18, 2014, 07:03:45 PM

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.

10% APR is anything but low reward. It is low risk though Wink

It is not low risk in general. It depends on the time you buy. Even if a broad index fund flattens out the risks of individual stocks, a general market crash can generate great losses that will not be regained for decades (inflation-adjusted) if you bought near a market top.

It's important to buy cheap. The stock market valuation is not favourable at the moment - stocks are overvalued. Buy after the next crash.

wachtwoord

legendary

Activity: 2324

Merit: 1125

Quote from: cosmicapex on June 23, 2014, 01:26:06 PM

Quote from: wachtwoord on June 20, 2014, 06:45:08 PM

Quote from: ShakyhandsBTCer on June 19, 2014, 07:53:00 PM

Quote from: wachtwoord on June 18, 2014, 07:03:45 PM

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.

10% APR is anything but low reward. It is low risk though Wink

cosmicapex

member

Activity: 87

Merit: 10

Quote from: wachtwoord on June 20, 2014, 06:45:08 PM

Quote from: ShakyhandsBTCer on June 19, 2014, 07:53:00 PM

Quote from: wachtwoord on June 18, 2014, 07:03:45 PM

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

Low reward =\= low risk.

picolo

hero member

Activity: 1022

Merit: 500

Investing in yourself usually beats inflation and you get a nice return if you can improve your position in the field you chose and you can move the investment around the world

InwardContour

sr. member

Activity: 644

Merit: 260

You can never really "beat" inflation without taking on some level of risk.

You can match inflation plus earn a (very) little bit of return with Treasury Inflation Protection Securities. You would be taxed on the inflation portion of the gains every year if you do not hold them in a tax advantaged account.

If you can handle a little bit more risk then you can invest in a diversified portfolio of stocks, bonds, cash and alternate investments.

zimmah

legendary

Activity: 1106

Merit: 1005

Search for dooglus on this forum and you'll have a pretty good investment.

STT

legendary

Activity: 4102

Merit: 1454

Quote from: Dalmar on June 21, 2014, 07:26:02 AM

It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.

The FED is only as strong as those who back it. They gonna be like a firefighter thats run the lake dry, nothing they can do about it at that point. This links into political and social movement throughout the globe and no doubt very many varied views. We can point to some obvious truths, mostly it revolves around greater population growth outside USA, outside Europe and the established wealth in the world.

Maybe the rich nations support FED policy, the IMF, etc however its framed but its cannot continue forever. At some point it will matter what India or China thinks and not just the party officials but the people. Saudi Arabia is another rapidly growing country, at some point USA has to catch up in real terms not just printed political capital.

The FED is just a man behind the curtain, the boom and they holler with grand effect but they are no greater then any of the rest of us

OROBTC

legendary

Activity: 2940

Merit: 1865

...

@ OP protokol

If you already are somewhat diversified, and you do not already own gold, then that is an obvious choice for me. Even mainstream money-managers say owning 5% - 10% of your wealth in gold is OK.

Platinum and (especially) palladium are less liquid (higher buy/sell spreads), but offer a little more zing to you investments. Both Pt and Pd are used by industry and are scarce. And if the world economy does do well in coming years, Pt and Pd should do even better.

But, I would stay diversified across your portfolio.

Forest land (discussed above) is OK too, but may depend more on how well the housing industry does than I would like.

miketonic

full member

Activity: 185

Merit: 100

Dividend aristocrats. Very stable and dividend growth usually outperforms inflation.

picolo

hero member

Activity: 1022

Merit: 500

Quote from: Dalmar on June 21, 2014, 07:26:02 AM

Quote from: Dalmar on June 21, 2014, 07:26:02 AM

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency. You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar. Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say. A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance

You may be right on the fundamentals for precious metals, but I believe this market is heavily manipulated by some large market making entities that are painting the market to look like a long bear market (repeat of 90s to dissuade PM investors). It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.

The demand is booming and the production of precious metals isn't so I don't think they will effectively manipulate it more than a few years

wachtwoord

legendary

Activity: 2324

Merit: 1125

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency. You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar. Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say. A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance

You may be right on the fundamentals for precious metals, but I believe this market is heavily manipulated by some large market making entities that are painting the market to look like a long bear market (repeat of 90s to dissuade PM investors). It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.

I don't hold PMs but the answer is physical. https://www.youtube.com/watch?v=vWz9VN40nCA

Dalmar

hero member

Activity: 1106

Merit: 500

Life is short, practice empathy in your life

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency. You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar. Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say. A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance

You may be right on the fundamentals for precious metals, but I believe this market is heavily manipulated by some large market making entities that are painting the market to look like a long bear market (repeat of 90s to dissuade PM investors). It would not surprise me one bit if they manage to keep it suppressed for a decade. You can't fight the fed.

wachtwoord

legendary

Activity: 2324

Merit: 1125

Quote from: wachtwoord on June 20, 2014, 06:45:08 PM

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency. You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar. Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say. A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance

The share market completely crashing for a long period of time is unprecedented ever. As long as you don't sell the only downside is that you're not very liquid for a while.

Further, if this ever happens, and the economic collapse that is necessary for this really occurs, don't you think the Bitcoin hedge which I suspect everyone here to have will go up exponentially in value?

STT

legendary

Activity: 4102

Merit: 1454

In the early eighties they raised rates to 20% before they managed to undo the nixon overhang of weaker currency. You really want to tell me you think they can do that now.

Thats about equal to calling oil bearish as they invent the motorcar. Never before have we had this much crap and upset in the monetary system, its an epidemic. Maybe metals arent it but it sure is a possibility and if nothing else they'll outlast cheques or bonds

Theres land and theres gold, everything else is risky business and hard to say. A share should last in theory and thats my preference but as above some will argue bearish tenancies and higher dollar worth in future will retard company gains and finance

Dalmar

hero member

Activity: 1106

Merit: 500

Life is short, practice empathy in your life

Stay away from precious metals. They are in a long term bear market. Buying now could be equivalent to buying PMs the early 80s and having to bag hold for decades just to keep up with inflation.

There will be many bull traps along the way, but the overall trend is down for probably a decade.

Erdogan

legendary

Activity: 1512

Merit: 1005

Quote from: ShakyhandsBTCer on June 19, 2014, 07:53:00 PM

Quote from: wachtwoord on June 18, 2014, 07:03:45 PM

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

100 years, nice, but there are problems with the index when stocks go in and out, splits, joins, buybacks, dividends, mergers and so on. The effect is that if you have a mix of stocks exactly proportional to the index weights, you will still not get a profit equal the index gain.

Swordsoffreedom

legendary

Activity: 2884

Merit: 1115

Leading Crypto Sports Betting & Casino Platform

Quote from: gentlemand on June 16, 2014, 02:21:33 PM

In these chastened times 5% and above is considered risky. As you used a £ sign I assume you're in the UK. Have you looked into a stocks and shares ISA? I stuck a bit into the Fundsmith one and it's performed well.

If you can find some good bonds in the bond market you might get offered 5% but strangely enough even that amount if return is considered risky at this point.

In my opinion your best bet is to buy a bank stock with a solid dividend to its shareholders.

wachtwoord

legendary

Activity: 2324

Merit: 1125

Quote from: ShakyhandsBTCer on June 19, 2014, 07:53:00 PM

Quote from: wachtwoord on June 18, 2014, 07:03:45 PM

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

I would. The index will provide you an 10% APR over a 100 year period.

IIOII

legendary

Activity: 1153

Merit: 1012

Quote from: ShakyhandsBTCer on June 18, 2014, 07:01:56 PM

In order to sell your trees you will need to spend some amount of money in order to cut down, transport and sell the trees.

Yes, but such costs are only significant if your stake of forest is really tiny. People tend to underestimate the value of natural wood - at least in Europe prices have surged greatly. Even simple firewood is valuable - and you don't have to cut down entire trees to collect that.

Quote from: protokol on June 19, 2014, 08:28:31 AM

Thanks for all the suggestions! Looks like I've got some research to do, also need to think how liquid I need the investment to be...

The forest idea sounds fun, I had thought of buying land, but ruled it out as most standard plots of land (big enough to build a house on) are too pricey for me. On the topic of novel investments, I spoke to a guy the other day that bought a few bottles of old French wine (Bordeaux I think) at auction, and sold them a few years later for about 5x what he paid for them. Risky as hell, but an interesting idea, and there can be capital gains benefits as well.

Normally building areas are much more costly than farmland or forest. If you want an even cheaper option and have lots of patience you can also buy forest clearance areas to regrow forest on them - if available.

I would not invest in luxury goods. These are high risk speculations and greatly depend on economic cycles.

Anon136

legendary

Activity: 1722

Merit: 1217

The safest investment in the world might be nickels. Also there are pre-1982 copper pennies. You can buy one of these http://www.ebay.com/itm/2014-RYEDALE-SIDEKICK-PENNY-SORTER-/171342840837 and pick up a box of pennies on the way home from work every day from a different bank. Pre-1965 us coinage is 90% silver. This is my preferred choice. Food with a long shelf life is smart. Ammo is smart. Anything thats based on paper registered at the DTCC is not safe imo but just because it isnt safe doesnt mean its always a terrible idea if you know what you are doing.

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: wachtwoord on June 18, 2014, 07:03:45 PM

A wide low fee index fund. Buy the S&P500 or something.

I would not call the stock market "low risk"

protokol

legendary

Activity: 1188

Merit: 1016

Thanks for all the suggestions! Looks like I've got some research to do, also need to think how liquid I need the investment to be...

The forest idea sounds fun, I had thought of buying land, but ruled it out as most standard plots of land (big enough to build a house on) are too pricey for me. On the topic of novel investments, I spoke to a guy the other day that bought a few bottles of old French wine (Bordeaux I think) at auction, and sold them a few years later for about 5x what he paid for them. Risky as hell, but an interesting idea, and there can be capital gains benefits as well.

wachtwoord

legendary

Activity: 2324

Merit: 1125

A wide low fee index fund. Buy the S&P500 or something.

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: DurbanPoison on June 18, 2014, 05:34:05 PM

I'm looking to invest £5k into something that will outperform inflation. I already own BTC, and want to diversify into something low-risk, low-return - anything above 5%/year would be OK.

Buy forest. It has predictable returns overall (in decades) above inflation (even if not managed intensively) and is really low risk if bought at reasonable prices. However you have to have knowledge in forest management.
It also offers recreational benefits.

What a great suggestion! I'd definitely take a piece of forest over stocks/bonds/paper promises any day as well.

The great thing about a piece of land like a forest is that not only will you have a retreat if/when shit hits the fan, you can also sell firewood! Each tree is like a stack of bills Grin

In order to sell your trees you will need to spend some amount of money in order to cut down, transport and sell the trees.

keithers

legendary

Activity: 1456

Merit: 1001

This is the land of wolves now & you're not a wolf

If you can get hooked up with a good financial advisor who can just invest whatever you can afford (per month), spread across stocks, mutual funds, bonds, equities, etc. you should be able to beat inflation.

Having money automatically deducted from your bank account also forces you to save money, because that money is basically spent and just disappears from your bank every month. It adds up quicker than you think, and if you do it with a comfortable amount, you almost don't even notice that it is gone...

DurbanPoison

member

Activity: 111

Merit: 10

I'm looking to invest £5k into something that will outperform inflation. I already own BTC, and want to diversify into something low-risk, low-return - anything above 5%/year would be OK.

Buy forest. It has predictable returns overall (in decades) above inflation (even if not managed intensively) and is really low risk if bought at reasonable prices. However you have to have knowledge in forest management.
It also offers recreational benefits.

What a great suggestion! I'd definitely take a piece of forest over stocks/bonds/paper promises any day as well.

The great thing about a piece of land like a forest is that not only will you have a retreat if/when shit hits the fan, you can also sell firewood! Each tree is like a stack of bills Grin

Scott J

legendary

Activity: 1792

Merit: 1000

Something like this would be a good option:

http://www.partnershipbond.com/content/jlbond/home.html

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote

want to diversify into something low-risk, low-return - anything above 5%/year would be OK

You are not going to find any investment that is low risk that will pay 5% interest/growth/return

Your best bet would probably be to invest in investment grade corporate bonds with a 5-10 year maturity. I don't think you would get quite 5% but it would be pretty low risk. When interest rates rise the market value of these bonds would fall, but your principle would be repaid when the bonds mature assuming the issuer does not default

practicaldreamer

hero member

Activity: 770

Merit: 500

Index linked gilts,bonds and savings certificates are a safe bet. NS&I are backed by HM Treasury.

IIOII

legendary

Activity: 1153

Merit: 1012