Investment Performance

by Investment U

Investment Performance: Issue # 372

The Investment U E-Letter

Thursday, September 23, 2004

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Investment Performance: 11 Investments That Could Beat Stocks Until 2009...

By Dr. Steve Sjuggerud

President, Investment U

Talk about lack of investment performance... Investors who stuck with stocks over the last five years have been ruined...

The Nasdaq stock index hit its all-time high of 5,133 nearly five years ago, on March 10, 2000.

Today, the Nasdaq is still down by more than 60%. People who thought they'd be able to retire will now have to work many more years.

Folks who were loaded down with stocks were people who fell for the mainstream advice. They obviously weren't readers of Investment U...

They didn't learn like you did about how expensive stocks really were, and how attractive some other assets were, like real estate and commodities.

If you just held stocks and followed "buy and hold" without any other plan, chances are you really got hurt. You need a new plan for the next five years, and it may include some assets you've never considered buying before.

At this conference, we'll size up the market's investment performance over the last five years, and come to some conclusions about how to invest for the next five years.

A Quick Look Back at What Has Worked

The last great stock market peak was in the late 1960s, and that great bull market, like all the others, was followed by a great bear market.

The 1960s... were much like the 1990s but instead of Internet stocks, they had the " 'tronics boom." Instead of momentum traders, they had "go-go fund managers." (Just like the late 1920s, the late 1960s was a great boom. And just like the late 1920s, the late 1960s ended in a long period of bad times.)

For a dozen years starting in 1968, stocks lost money (when you account for inflation). Meanwhile many other asset classes performed remarkably well. Consider this table from our Investment U Course:

Charting Investment Performance of Various Assets from 1968 to 1979 (In Compound Annual Gains)

  • 19.4% Gold
  • 18.9% Stamps
  • 15.7% Rare books
  • 13.7% Silver
  • 12.7% Coins (U.S. non-gold)
  • 12.5% Old masters' paintings
  • 11.8% Diamonds
  • 11.3% Farmland
  • 9.6% Single-family homes
  • 6.5% Inflation (CPI)
  • 6.4% Foreign currencies
  • 5.8% High-grade corporate bonds
  • 3.1% Stocks

(Source: A Random Walk Down Wall Street, by Burton Malkiel)

Returning to present, it's been five years since the stock market peak. And still today, stocks are not particularly cheap.

So while I've arranged for a few speakers at our upcoming Investment U conference to speak on investing in stocks, I have also made a point to invite speakers from many other investment worlds as well

We'll have speakers on real estate, commodities (including timberland), currencies, collectibles (including coins), hedge funds, bonds and more.

The goal of the course is for you to leave our 7th Annual Investment U with a working knowledge of the major investments that performed well out there in the last great bear market, and how they might perform in this bear market.

The Bear Market in Stocks Isn't Over Yet

In short, the great bear market in stocks isn't over. You absolutely need to consider diversifying your wealth into other assets outside of the stock market.

It's the five-year anniversary of Nasdaq 5,000.

Now you need a plan to make your investments perform for the next five years. And it should include assets outside the stock market. So review the list of assets above in Charting Investment Performance that performed best in the last great bear market And join us at our 7th Annual Investment U conference this March to learn from the best.

Then make the changes to your portfolio you know that you need to make. You'll be glad you did.

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Today's IU Cribsheet

Good investing,

Steve

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