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Long term your best bet is still stocks. Stocks naturally resist inflation- when inflation goes up earnings will go up with them. The current P/E is high but

by YZF 4y ago

Long term your best bet is still stocks. Stocks naturally resist inflation- when inflation goes up earnings will go up with them. The current P/E is high but it's not insanely high. Sure, stocks can still go down 10% or 20% (or 30% or 40% though less likely) but your cash is also going to get eroded by that much over the next few years and at least you have a productive investment. Whether real estate is worthwhile depends on your local markets. In some parts of Europe it might be. If you need a place to live, and you think the prices are reasonable (e.g. it's a market that hasn't seen crazy prices due to QE and low rates) and you can afford it then I'd definitely consider keeping in mind that it's also a long term play, not a short term one. If it's purely investment property the calculation is different.

comex 4y ago
> Sure, stocks can still go down 10% or 20% (or 30% or 40% though less likely) but your cash is also going to get eroded by that much over the next few years and at least you have a productive investment. The current trend is that stocks are going down in dollar value, not just in real value after adjusting for inflation. Are you saying you expect that to reverse?
- majormajor 4y ago
  I'm not convinced the current trend is going to go particularly negative from a 2+ year perspective. Things got super overheated in 2020-2021 but demand is still strong, so I wouldn't be surprised if things level back off after the steam is let out.
- YZF 4y ago
  Ofcourse it will reverse. Sure, the P/E is on the high side and so the expected returns won't be as good as they can be but hey, you're already 20% down (or more in real terms). If we we're going to see 8% inflation over the next few years then sitting in cash is going to see your money get erased. Bond rates are still way too low. Housing is somewhat inflation resistant but it has also been terribly inflated. So stocks look like the best option right now, if we go more down they'll be even better ;) EDIT: Just to be more specific, I'm pretty sure that in ~5 years you'll at least maintain your real value and in 10 years you'll have a decent real return. Pretty decent probability anyways. In 10 years you'll beat the 10 year bond and the housing market (or gold, or cash or bitcoin). I'm sure some sectors will over-perform and some will under.

by YZF 4y ago

comex 4y ago

> Sure, stocks can still go down 10% or 20% (or 30% or 40% though less likely) but your cash is also going to get eroded by that much over the next few years and at least you have a productive investment. The current trend is that stocks are going down in dollar value, not just in real value after adjusting for inflation. Are you saying you expect that to reverse?

majormajor 4y ago
I'm not convinced the current trend is going to go particularly negative from a 2+ year perspective. Things got super overheated in 2020-2021 but demand is still strong, so I wouldn't be surprised if things level back off after the steam is let out.
YZF 4y ago
Ofcourse it will reverse. Sure, the P/E is on the high side and so the expected returns won't be as good as they can be but hey, you're already 20% down (or more in real terms). If we we're going to see 8% inflation over the next few years then sitting in cash is going to see your money get erased. Bond rates are still way too low. Housing is somewhat inflation resistant but it has also been terribly inflated. So stocks look like the best option right now, if we go more down they'll be even better ;) EDIT: Just to be more specific, I'm pretty sure that in ~5 years you'll at least maintain your real value and in 10 years you'll have a decent real return. Pretty decent probability anyways. In 10 years you'll beat the 10 year bond and the housing market (or gold, or cash or bitcoin). I'm sure some sectors will over-perform and some will under.