Poll: What is today’s best 5-10 year investment?

What is today's best 5-10 year investment?

  • stocks (29%, 38 Votes)
  • real estate (23%, 30 Votes)
  • U.S. Treasury securities (6%, 8 Votes)
  • gold or other precious metals (18%, 24 Votes)
  • foreign investments (11%, 14 Votes)
  • other... (14%, 19 Votes)

Total Voters: 133

This poll was active 09.11.2011 through 09.17.2011.

0.00 avg. rating (0% score) - 0 votes

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

56 comments:

  1. 1
    Crashcadia says:

    Antiquities beat equities in the long run.

  2. 2
    Macro Investor says:

    9/11/01 to 9/11/11 — stocks are up 6% total. US gov bonds are essentially at 0% yield… nowhere to go from there.

    Gold has had a huge run. Some people think bull markets last forever, even though none ever has. Real estate? Good luck with that one ;)

    Foreign investments means what, exactly?

    I vote for “other”. Cash and maybe commodities. I’ve heard the world population doubles every 40 years. Resources are getting more scarce, especially oil.

  3. 3

    I’m thinking the best investment over the next 5-10 years would be things like canned goods, bottled water, and ammo. Or whiskey.

  4. 4
    rentfornow says:

    Shotguns, bicycles

  5. 5
    Ray Pepper says:

    800 sq foot homes that are 2 bed 1 bath, have electric baseboard heat for low maintenance, 6000 sq ft lots, rent for 1000 a month and can be found in South Tacoma and other areas currently for 50k.

    Here is an exp of one in Tukwila: http://www.zillow.com/homedetails/13819-38th-Ave-S-Tukwila-WA-98168/49107636_zpid/

    These 1940’s lil box homes are CASH COWS!

  6. 6
    David Losh says:

    RE: Ray Pepper @ 5

    Why would any one gift the owner $880 per month for that dump?

    I can see moving in, and filing a complaint against the land lord then squating in the home until the sherrif comes, that I can see. Maybe some one rents the place out to ten crack heads at $100 per month, then not pay the land lord. I can for sure see that happening.

    I can see a renter going to the owner’s home each month and giving the owner the gift of about $400 if the owner is lucky, then telling the owner they better like it, or the renter will be back, with friends, probably the crack heads who would be losing a home.

    You may not remember the 1970s and what land lords went through to collect the gift of rent. Slum lording is going to get real messy this time.

  7. 7
    David S says:

    RE: Ira Sacharoff @ 3 – Yes, precious metals like copper, lead, brass.

  8. 8
    Ray Pepper says:

    RE: David Losh @ 6

    880? I said 1000 a month..!! You see David when the cost of apartment living in a 500 sq foot unit is 700-800, landlords easily pull in 1000 a month on these.

    No crack dens! Just a wonderful buying environment for the next few years to build a portfolio to retire on!

    There are GEMS on wonderful streets everywhere ( and for years to come) but the question is David……………….DO U HAVE THE CASH?

  9. 9
    Ray Pepper says:

    here is another David! A bit outside of Washington State but our offer of 55k met 3 other offers and unfortunately it appears shes going at 69k. Rents all day long for 950 and hit a high of 280k. When built in the 80’s she came outta the gates at 130kish and is a GEM all day long!

    http://www.realtor.com/realestateandhomes-detail/225-Woodlake-Cir_Dayton_NV_89403_M26421-40239

    You just gotta do your DD David and when the cost to build is currently 3 x that of the current asset value with rental returns of 20% or greater be ready to STRIKE!

  10. 10
    David Losh says:

    RE: Ray Pepper @ 8

    Whoa, I don’t see apartment rents staying at $800. Actually it’s not important. Once the shadow inventory is forced to the market you can expect people to decide who they want to gift rent money to.

    Now about that cash. Why would any one tie up cash in today’s market place only to lose it?

    Why?

    I think that right now rents are as extremely high as the price of housing units.

    Did you say $50K? I thought that house was $100K or something outlandish like that. Still $50K would be a lot for one of those proeprties.

  11. 11
    David Losh says:

    RE: Ray Pepper @ 9

    Wait a minute, you’re kidding, right? That place has been $69K for over twenty years. It rents for about $450 if you’re lucky.

    Rents are high today for the same reason housing prices are high. People pay too much, but they won’t stay stupid forever.

    BTW two of our friends told us this week end they are walking away from their properties. Both had modifications that the bank screwed up, and they are tired of dealing with them. I think we are just getting started with the collapse of Real Estate prices.

  12. 12
    David Losh says:

    On a brighter note, I think small business is a gamble worth taking.

  13. 13
    Ray Pepper says:

    RE: David Losh @ 11

    “BTW two of our friends told us this week end they are walking away from their properties”

    What took them so long to come to this realization of walking away? Didn’t you educate them 3.5 years ago when I was clammoring about it?

    David let me tell you a lil secret about modifications. There is no such thing!! Loan modifications( as they sit today) with BAC, WFC, and JPM might as well just be called “kick-d-can-down-da-roadifications” . On a REAL LOAN MODIFICATION just look at one thing: What is your principle balance before and then after the “modification.” Then you will see if you truly got a modification. However, the real positive of attempting a “modification” is the 6 months to a year or two for the banks to realize your friends do NOT qualify. Now thats REAL money!

    If they have already made this decision then support them but above all make sure they do it properly and SAVE like they never have before! The cash they save will be integral in the coming years.

  14. 14
    Ray Pepper says:

    RE: David Losh @ 12

    Can you be more specific? Give some examples to help the masses here? Yogurt shops? Or dump money into small businesses in Peru. You seem to refer to that region alot.

    Enlighten us…….Its all within the guidelines of this topic.

  15. 15
  16. 16

    By Blurtman @ 15:

    RE: Ira Sacharoff @ 3 – Why?

    Just envisioning a Mad Max type scenario, with a combination of scarcer natural resources, less government and more Wild West stuff going on, global climate change resulting in less fresh fruits and vegetables. Hope it’ll be a lot longer than 5-10 years.

  17. 17
    Blurtman says:

    RE: Ira Sacharoff @ 16 – Seriously?

  18. 18
    Real World Express says:

    Having a category “stocks” is like having a category “department store goods”.

    The question is which stock or stock group.

    My money is in dollars and technology small caps.

    When I stop posting, it either means I’ve retired to North Dakota, or am broke and on the street…either way….life goes on….

  19. 19

    By Blurtman @ 17:

    RE: Ira Sacharoff @ 16 – Seriously?

    Not totally serious, but the economy doesn’t look pretty, less revenues for govt and a populace that’s hellbent on reducing taxes, an increasing number of people making less money , angry unemployed masses, but underfunded and smaller police forces .I hope I’m wrong. But investing in whiskey is probably is a good idea no matter what.

  20. 20
    HappyRenter says:

    Invest in skills. You know how to do something well, you will always find a job.

  21. 21
    Blurtman says:

    RE: Ira Sacharoff @ 19 – A few years back I remember watching footage of a group of angry Americans, organized by a Save Our Homes type of group, march to the gated mansion of a well known Wall Street exec, possibly in NY or Connecticut. As the crowd massed outside the gates of the mansion, one of several homes owned by this fellow, a few suited security folks were taking defensive positions. Was this outraged group really going to take over this luxurious estate, possibly acquired through ill gotten gains and activities not beneficial to America? There seemed to be a moment where things might have been much different if a certain course of action was taken, but the leader of the group led the masses in a slogan shouting chorus, and then moved on.

  22. 22
    lecadidupe says:

    Well, farmland seems to be the thing recently, for obvious reasons. If your house has only 5000 sq ft of farmland, you’ll have to very selective in what you choose to grow: premium organic berries, fungi, savory herbs and spices, and pink pony feed – the kind of stuff you can barter with at local festivals.

  23. 23
    Pegasus says:

    Invest in guns and ammo.

  24. 24

    Gold is a bubble waiting to happen (in a year or so). Is anyone doing a GoldBubble.com blog?

  25. 25
    Cheap South says:

    The problem is not population growth (which globally has slowed down significantly); the problem is the existing population (read China and India – 1 of every 3 people on the planet), starting to consume resources like industrialized nations. This is the real issue.

  26. 26
    David S says:

    RE: Pegasus @ 23 – Yes, invest in government: Bureau of ATF & E.

  27. 27
    David Losh says:

    RE: Ray Pepper @ 13

    Wait another minute, you left my comment unchallenged.

    That place in Nevada, like those places is Tukwila are called affordable housing. They don’t pass the investment test, so they are home owner bait. The mortgage payment is about what the rents would be.

    There is no reason to invest your cash in a break even situation that has sever risk.

  28. 28
    David Losh says:

    RE: Ray Pepper @ 14

    Property preservation will be a growth industry. A small bob cat, back hoe, or a basket lift would be good investments.

  29. 29
    doug says:

    I’m investing in my education and getting my MBA. Maybe not the best idea for everyone, as school prices are so high. However, my job picks up about half the tab, so it’s not a bad deal for me.

  30. 30
    Blurtman says:

    RE: doug @ 29 – Are you learning anything useful? Have you gotten to Firm Handshake 101, yet?

  31. 31
    Blurtman says:

    Going long guillotines might be a good call.

  32. 32
    doug says:

    RE: Blurtman @ 30

    To be honest? I really enjoyed my project management class.

    I haven’t learned a thing from any other class that I didn’t know from casual interest in economics – and I’m doing very well in the classes. I’m going for the piece of paper. Sometimes you just have to play the game.

    I knew I wouldn’t need to know calculus, differential equations and linear algebra to be an engineer, but I took them anyway, because that’s what you do.

    I’ll spare you my boring rant about how higher education is in a completely unsustainable bubble of its own ;-)

  33. 33

    RE: Ira Sacharoff @ 3

    I Agree Ira

    I’d add canned coffee and freeze dried food [it has no expiration date]. Hide it well though, if all hades breaks loose, the neighbors will be using their guns and baseball bats to get at it.

  34. 34

    RE: doug @ 32

    You Got It Doug

    I did use Calculus once to estimate the deflection of a linearly changing beam cross section….

    I minored in math and don’t regret it as an engineer, even the post graduate courses in complex linear algebra…..all math teaches you to think structured and logically.

    This country would have a much better chance of solving its economic problems if it put engineers in charge of MBAs….we’d get better products that would sell, instead of always doing it the old way on the cheap.

  35. 35
    Pegasus says:

    By softwarengineer @ 33:

    RE: Ira Sacharoff @ 3

    I Agree Ira

    I’d add canned coffee and freeze dried food [it has no expiration date]. Hide it well though, if all hades breaks loose, the neighbors will be using their guns and baseball bats to get at it.

    Don’t forget to get some SPAM. Comes in all kinds of flavors now.

    http://www.spam.com/

  36. 36

    RE: Pegasus @ 35 – Spam with bacon–that sounds healthy.

    On the other hand, Spam Hot & Spicy might be interesting.

  37. 37
    Blurtman says:

    RE: doug @ 32 – Any education is a good thing. You better yourself and you really can’t predict when what you learn might come in handy. Why not take a few investment finance classes, if for no other reason than to equip yourself for understanding that game?

  38. 38
    Blurtman says:

    RE: softwarengineer @ 34 – You might get products that worked, but that appealed to no one.

  39. 39

    RE: Blurtman @ 38

    You’ve Got a Point

    A lot of the blind “foreign lobbyist” type consumers enjoy the options of buying junk and if given a product that works and looks nicer for less money….they would bad mouth it. Especially if American engineers designed it.

    Have you seen what American engineering did to the 2011 Dodge Charger [the changes/improvements from 2010 was fantastic]? Now, what in hades do the foreigners’ engineers design that competes with that 4200 lb muscle car beauty that get’s like 30 mpg and 300 hp….I know, you come up nada.

    The foregn lobbyists wildly allegate our college educated and our unskilled workers have no brains, the foreign replacements are always much cheaper and better. I say enjoy that $30,000 Rav, it costs FAR more and gets less power/mpg than the Charger. It looks junky and dinky too, IMO. The foreign lobbyist type MBAs probably brag about it and drive it too.

  40. 40
    Blurtman says:

    RE: softwarengineer @ 39 – Nothing can ever compete with the Aztek! I see a lot of Chargers on the road, and I assume some are non-rentals, so it must be a succesful product. I am not a huge fan, myself. I like the looks of the re-done Challenger a lot. Kind of faithful to the mid-’70’s original. Ditto the re-done Camaro.

    My fave car/’70’s movie – Vanishing Point.

  41. 41
    Dirty Renter says:

    As Buffett says… investment analysis says more about the analyst than the subject itself.
    I like stocks & bonds – which are backed by strong financials, free cash flow, and little debt. I like their products to be of the inelastic demand sort, like go-juice, for example. Hmm, I wonder what that says about me? One more thing – whatever you invest in…try to ensure the CEO is honest and has your back. I’ve found that more important than ever, these days.

  42. 42
    Dirty Renter says:

    I always recommend that folks take accounting 101 & 102, before investment classes. You need that basic understanding so you can sort out the liars & know-nothings. You should know the entire path of each and every financial transaction. A good foundation of economics is also valuable.

  43. 43
    Pete says:

    By Conor MacEvilly @ 24:

    Gold is a bubble waiting to happen (in a year or so). Is anyone doing a GoldBubble.com blog?

    All markets move in cycles, some are decades long. Stocks were a great investment from 1982 to 2000, terrible from 2000 to today. Housing from 1992-2006 (or longer), probably not a great investment for several years, unless you get a great buy ( 2005 prices are still too high). Gold bull market from 2001 ’till (?). I doubt it will end anytime soon as there are plenty of naysayers who refuse to participate. There have been plenty of 10-20% corretions to shake out the short term speculators without breaking the long term up trend. It may correct 20% from here, but would still not break it’s uptrend line on the chart. None of the fundamentals for Gold has changed, and none look likely to change in the near future.

    There have been Gold bubble callers since 2003. If you had listened to them you didn’t make 20%+ per year. An honest bubble caller got it right when he said “My previous forecast for a drop in gold price have been proven wrong, so my credibility at this point is very low…”

    Metals have my vote- and I put my money where my mouth is. I also bought farmland and a house (at 2000 prices).

  44. 44
    doug says:

    RE: Pete @ 43

    I do think gold is in for a major correction, is overvalued now, and is nearing its peak (probably around $2100). I just go back to the fact that it’s near its historic, inflation-adjusted, peak, and that peak occurred when inflation was much, much higher than it is today. After that previous peak, gold crashed.

    Sure, the dollar is weakening, but it’s not weakening to nearly the extent that gold should be climbing something like 10% a month. Gold is not more utile than it was; it’s selling on a fear of a weakening dollar that’s outpacing the reality of the weakening dollar.

    The second any sector of the economy starts to pick up, or interest rates rise, gold is going to drop like a rock. (I grant you this may be quite a ways off)

    If you buy now, maybe you make a killing on gold in the next two years, maybe you lose your pants. But gold is high enough now that I’m selling my modest collection from buying storage units. I think I’ll be glad I did.

  45. 45
    Scotsman says:

    Lawyers, guns, and butter!

    Ray, you’re early- again. Wages will fall, then home prices. Again. what percentage of those who lose their jobs are rehired into better paying positions?

    The presidents long awaited jobs bill is now out. It includes $4,000 tax credits for any company that hires someone who has been layed for for 6 months or more. I can just see companies laying off current workers to hire those who come with a tax credit- and probably at a lower hourly rate. Another fix with the potential to make the problem worse.

  46. 46
    One Eyed Man says:

    RE: Dirty Renter @ 42

    Without a little accounting background and sufficient industry knowledge, you’re just the investment equivalent of a tootsie roll pop. Give a sweet toothed promoter or flipper a couple of yrs and they can generate the needed financials to make a break even apt complex, office building or other business look like a block buster investment. When it comes to apartments, all you need to do is defer most of the routine maintenance, but make sure the facade is kept neatly painted and clean. Of course you don’t re-roof or re-surface the parking lot. And never replace the carpet on vacancy when you can get-by by having the maintenance guy who makes $2K/mo hit it for a half day with a steam cleaner, etc, etc. The manipulation of the operating costs results in a misleading increase in net operating profit and an inappropriate increase in the value based upon the going CAP rate, unless your savy enough to spot the deferred maintenance and adjust the past operating profit for it.

    If you know a little accounting and how the industry can keep its sins off the P & L, and in some non-existent or not transparent accounting category even a small time schmuck can operate his own little Enron.

    And the same is generally true of much larger enterprises. Unless you know how the financial statements are put together and what the normal operating statements should look like you better be careful cause a would-be Jeff Skilling might bite you just to get at your gooey center.

  47. 47
    Blurtman says:

    RE: One Eyed Man @ 46 – Jeff Skilling is a tragic victim of Obama’s anti-business rhetoric.

  48. 48
    microsofties says:

    RE: doug @ 44

    Gold isn’t overvalued.

    Debt as a % of GDP was 45% in 1980. Today, we’re at 115% or so.

    We’re Greece, buddy. Our banks are all insolvent, we are hemorrhaging money to service a debt load that continues to expand faster than ever, we have an enormous trade imbalance, too much liability in entitlement programs, and a contracting workforce.

    The real unemployment rate for kids 16-25 is close to 55% today.

    Obama needs to spend 400B to get a few thousand people back to work according to his plan. At that rate, it’s going to take him roughly 20T to even make a dent in unemployment.

    It took the Romans nearly 200 years to devalue their currency 100% and render it worthless via the same approach as we are taking now. We’re way ahead of the curve as we’ve devalued the dollar 97% since the 1960s.

    US dollars are destined to fail as a global reserve currency. Who in their right mind would keep buying an asset that is guaranteed to depreciate in both the short and long term?

  49. 49
    Ron says:

    I’ve noticing that Room Rental rates have been on the slide the Last couple of years…
    Room sharing apparently the market is saturated with people just trying to make ends meet..

    I’m thinking this is could work its way into other parts of the rental market…
    I been driving around recently looking at real estate it seems there are more rentals than homes for sale, just my observations…

  50. 50
    Blurtman says:

    RE: microsofties @ 48 – Yeah, but….

  51. 51
    David Losh says:

    RE: microsofties @ 48

    Gold does not equate currency. The gold standard is dead, dead, and dead. China can keep it, and put gold foil on the pagodas, God bless them for it.

    Gold will continue to go up to $2400 per ounce? Is that right? I forget, but I think that is the 1980s value plus inflation.

  52. 52
    iShortedYourHouse says:

    Stocks and foreign investment could, almost, be rolled-up into the same category. A bet on the US stock market is really a bet on foreign markets as so many of the companies are mutinationals. This is the reason the reason the Dow is still 11k when the US economy is effed and why Euro debt crisis news causes sell-offs here.

    Precious metals and REEs (rare earth elements) are a bubble. As for real estate….well. Did I miss the mattress option?

  53. 53
    doug says:

    RE: microsofties @ 48

    These are all excellent reasons for gold to increase in value. But not for gold to sextuple in value. We’re talking degrees of magnitude here.

    Has any nation’s currency had anything approaching this? The Chinese Yuan has gone up something like 22% in the last 5 years. If the dollar was so weak as to cause the value of gold to sextuple, wouldn’t SOME country’s currency be rising incredibly quickly versus the dollar?

    P.S. U.S. debt is about 101% of GDP… Not that that is great.

  54. 54
    Pete says:

    By David Losh @ 51:

    RE: microsofties @ 48

    Gold does not equate currency. The gold standard is dead, dead, and dead. .

    The Gold standard is dead only in the textbook you read it in. Every major central bank and country in the world holds Gold because it is still MONEY. Every major city in the world has someone who will exchange Gold or Silver for the local paper currency. The Gold and Silver standard lives on because it is part of nature and cannot be done away with just because some politician passes a law. It can not be devalued because some politician wants to spend more money than he has received in taxes.

    Simple fact is that Gold and Silver are still in a bull market that is 10 years old. Any forecast that it has reached too high and is going to head down IS speculation. All such speculation has been wrong for the last 8 years. Not a good track record. Until it changes direction on the chart, it is still going up.

  55. 55
    Pete says:

    By doug @ 53:

    RE: microsofties @ 48

    These are all excellent reasons for gold to increase in value. But not for gold to sextuple in value. We’re talking degrees of magnitude here.

    Since Golds sextupling in value does not match your view of things, perhaps it means you need to change your view? To put it another way, at what dollar value of Gold would make you change your mind? There are a lot of smart people who own Gold, it’s not what a lot of red necks are buying and burying in the back yard.

  56. 56
    doug says:

    RE: Pete @ 54
    Gold not being a currency doesn’t mean it does not have value. Whether gold is a currency is really pretty incosenquential… Do you not agree that gold can be undervalued? Does that not also mean that it can be overvalued?

    “To put it another way, at what dollar value of Gold would make you change your mind?”

    About $900 an ounce :-)

    A higher value of gold isn’t going to change my mind, quite the contrary. $10 gallons of milk is what would make me change my mind!

    I don’t think my worldview is the one that is skewed… Measured against almost any commodity or any world currency, I can buy, at the least, about 75% of what I could in 2001 with my dollar. I can buy about 17% of the gold I could have bought back then.

    With a gold-centric worldview, everything in the world has dropped precipitously in value, except gold. I personally don’t believe that is the case.

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