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Berkeshire hathaway and AFLAC both have returned above your target rate over the course of decades. There are also many canadian resource companies that will
by lzw 16y ago
Berkeshire hathaway and AFLAC both have returned above your target rate over the course of decades. There are also many canadian resource companies that will return a good percentage in dividends and then stock appreciation, plus you'd benefit from the depreciation of the dollar against the CAD. IF you go that route, look for one that is adding resources faster than they are depleating them-- some have really high dividends but they are burning thru their reserves.
%12-%15 is not that hard to get, and doesn't involve substantial risk, but does involve doing your homework.
I would recommend one of Timothy Vick's books on Buffett for some advice.
Back when I was in the equities markets, I was able to predict the return I would get from a stock, buy it, and then, on average, exceed that return. Stocks are not gambling when you buy low, pre-calculate expected return over 5-10 years, and only buy when you are getting a good deal based on the expected return.
I'm out of the equities market because the US dollar is in serious danger, and I would not recommend bonds for this very same reason. I've been doing better in precious metals than I did in equities. But if I were in equities I'd also research some of the good precious metals companies-- some are very well run, and have both equity and growth appreciation by moving assets from discovery to production, as well as leverage to the decline in paper currencies which will cause their resources to have a larger market value. It is one thing to buy gold in the ground for $20 an ounce, it is quite another when gold is going up in price while you're doing it. But this sector takes more research.
IF you're willing to put in some time, it isn't that hard, but first I would recommend learning. The vick book, or Mary Buffetts "buffetology" are good resources. Find people who cover the sectors that interest you, learn all you can, and only invest in your circle of competance.
- lzw 16y agoAlso, one thing, if it is a new sector, consider if you can do some paper trading based on actual returns in the past. For instance, get annual reports from several companies from 2004. Try to get a survey of companies in the sector, and not be influenced based on what you know now about the companys. If you're married it would be best to have your spouse anonymize the companies by copying down the key figures from the annual reports, and then the price on Jan 30th, for each of the next 5 years. Have her keep the company key seperate. Analyze them on that basis, then look into the prices on the stock market in January 2005. Use those prices and discounted cash flow analysis to predict what their prices will be in 2010. Invest a fake $150,000 in the companies based on those calculations. Then wait a week. Each week, look up the prices for the companeis a year later and decide if your thesis still stands. For this example, lets just pretend like you have no access to news, no annual reports for 2005, just the price on Jan 30th, 2006. Decide to re-allocate if you want, but pay $100 for each transaction (sales and buys). IF you're down and you sell then you're locking in that loss. Do this for the next 5 weeks until you've covered the time period to Jan 30th 2010.... and then look to see how your companies did. Try to draw your conclusions before you connect the fake companies names with the real companies. Don't forget to account for dividends in the interim as well. This can be very instructive-- but be sure to learn about how DCF and current trading price affect risk. IF one of the companies did poorly, was it because of bad management? An externality that was unpredictable? etc.
- investiser 16y agoThanks for the suggestions. I will check out the book, and the method you suggest seems very fair enough. Appreciate it very much.