Originally posted by snehaldani
The idea is to have ready liquidity available throughout the year, without foregoing the returns in total. Of course, lower returns will come from these investments but even a once in a 2/3 year opportunity of bargain basement prices could more than make up the intermediate compromise of the returns.
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I agree with this, and I intend to time the market with the above startegy (yeah,
"good luck", I know). Managing the debt portfolio by keeping a keen eye on the interest rates and investing in gilt funds can also give a 1 year return of 20 - 30%.
"High" interest rates can be a pretty good indicator of when the stock market will crash. Don't ask me how high is "high" though.
Extra-ordinary returns cannot be made by "buying and holding" stocks - at best, one can get around 20 - 25% per annum. To get that kicker in returns, one needs to either -
- Dabble in futures and options
- Take leverage
- Time the market.
Since I don't understand futures/options and don't have the guts to take leverage, the last option is my only available bet.
| I think switching on the basis of valuation would make more sense |
Tried it already in 2006/2007 and failed
| A 30% jump followed by a 20% CAGR for 3 years generates a return of 30% CAGR! I like working on similar situations of taking some money off a wild stoick and then getting into the stable names |
This I agree with. But I'm trying to achieve this by not switching but by buying 20% CAGR growth small cap stocks at 5 P/E.
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