These Market Returns Suck

Captain Obvious reporting. I was reading the Wall Street Journal yesterday and saw how bad things are right now in terms of available returns on investment.

You can tell the bad news by just reading the headlines and some of the charts:

  • Steep Fall for High-Flyers  (China and India stock markets are down over 50%)
  • Even Defensive Names Take Hits  (Merck and Pfizer at multi-year lows)
  • The Dow is down 10.7% this year and 11.7% vs one year ago.

How about some Consumer-type Rates of Return:

  • Money Market Accounts (average):       2.41%
  • Five year CD:                                       3.85%

And the kicker – take a look at the average annual Return on Investment for the major stock indexes over the last three years:

  • DOW:                3.7%
  • Nasdaq:            4.8%
  • S&P 500:           2.7%
  • Russell 2000      4.2%

Now think about what happens to these anemic returns when you consider the impact of  inflation, which, according the Wall Street Journal is now 4.2%.

How many opportunities are there to actually break even right now much less make money?? 

By the looks of these numbers, there aren’t many. If you follow the crowd and “conventional wisdom”.

But now let me run some other numbers by you:

Scenario #1:
Total Cash Investment:            $14,000
Annual Cash Return:                $3,529
Annual Cash ROI:                      25%

Scenario #2:
Total Cash Investment:            $70,000
Annual Cash Return:                 $5,873
Annual Cash ROI:                      8.4%

So what are these investments? Hedge funds? Private equity? Made up case studies? Wishful thinking? MLM?

No. Real estate.

Both of these are examples of actual returns on properties that I own. Boring, unsexy, single family rental homes. And the best part is – you can invest your IRA savings in real estate.

So how would those returns look growing tax-free in your retirement account?

So stop following the crowd and start doing the opposite of what they do. That’s where the money always is.

If Scenario 1 caught your eye and you want to know more, I just launched a special free coaching program to show you how it’s done. You can see an overview here: http://cashflowmercenary.com/cash-flow-coaching/

If Scenario 2 is more your speed, then take a look at my Silver, Gold and Platinum programs here: http://greatlakesinvestmentfund.com/

To your higher returns . . . . .

Comments