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  • Non Standard Assets?

    So my portfolio is 100 stocks and bonds and besides my personal residence I own no real estate.  Got the pitch for 25% of my net worth should be in these non standard assets which include just about everything from Bitcoins, private placements to real estate.  Does anyone have any thoughts?  I have always valued liquidity and simplicity so not really sure if this would be something appropriate or not.

  • #2




    So my portfolio is 100 stocks and bonds and besides my personal residence I own no real estate.  Got the pitch for 25% of my net worth should be in these non standard assets which include just about everything from Bitcoins, private placements to real estate.  Does anyone have any thoughts?  I have always valued liquidity and simplicity so not really sure if this would be something appropriate or not.
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    You own 100 individual stocks and bonds? That's it? If so, that is totally scary to me. Putting 25% of your net worth into so-called "non-standard assets" (a gimmick if I ever heard one) would tilt you right into the Twilight Zone. jmo, of course.
    Financial planning, investment management and CPA services for medical and high-income professionals | 270-247-6087

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    • #3
      Stocks and bonds, 100 percent, perhaps?  I suspect you'd be fine.  Of course, you could argue to throw in a little extra real estate, but this would be antithetical to your desire of liquidity/simplicity.  I like a little precious metal; if gold loses all value, I'd have a nice doorstop or paperweight.

      25% of non-traditional assets sounds a little suspicious.  You could take a gamble on bitcoin.  As I've mentioned before, I prefer gambling on whisky; if the bottom drops out on the scotch market, I can drink my sorrows.

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      • #4




        Stocks and bonds, 100 percent, perhaps?  I suspect you’d be fine.  Of course, you could argue to throw in a little extra real estate, but this would be antithetical to your desire of liquidity/simplicity.  I like a little precious metal; if gold loses all value, I’d have a nice doorstop or paperweight.

        25% of non-traditional assets sounds a little suspicious.  You could take a gamble on bitcoin.  As I’ve mentioned before, I prefer gambling on whisky; if the bottom drops out on the scotch market, I can drink my sorrows.
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        Whisky sounds like a good non-standard investment and hedge against inflation.  All of the preppers buying gold coins boggles my mind, I mean, how much food is a piece of metal going to buy you in some sort of economic collapse?  On the other hand, booze always has value

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        • #5
          I don't think that's a reasonable portfolio.

          I recommend against individual stocks and most individual bonds and I certainly recommend against Bitcoin and similar assets. There is very little about your portfolio that I like, and I am pretty liberal when it comes to what I think is a reasonable portfolio.

          https://www.whitecoatinvestor.com/150-portfolios-better-than-yours/

           
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #6
            I bet he meant 100% - forgot the % sign.

            WCI, that link goes to a post where you have combined some numbers like 45-50 and its just one portfolio. Wondering if that was just a title thing.

            Back to the OP's question though - I have been thinking recently after reading a couple of indexing books. What if we didn't have a stock market? I mean how would you grow money? Basically thinking fundamentally, why is the stocks and bonds "portfolio" considered great or the gold standard? I understand the spreading the risk/diversification,but before there were index fund, what did people do? I am sure they survived fine. Is it just coming down to the basics that you believe in US(s&p)+world(International stock) growth and putting money down in a group of companies that include the good and bad because one cannot pick the good from the bad (stock picking) anymore?

            Can people survive a 10 year bear market? Who says market can't decline for a while before going back up.

            Just doing thought experiments.

             

             

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            • #7
              I think 100% just stocks and bonds is fine. Individuals and no that would be a mess. Bitcoin, so many nos. Whiskey, definitely not, I invested in some whiskey earlier this evening, its already gone.

              Remember we have been in a market that has just this year hit inflation adjusted highs from 2000, its done nothing for 16+ years. Yes, its been doing great for the last 8, but thats easy when you loser 50+% in short order two times. We didnt even hit the 2007 highs until March 2013. Some might say we've just started another bull run after a terrible 16 years.

              If you didnt have the market you'd probably be more reliant on real estate and entrepreneurship.

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              • #8


                I invested in some whiskey earlier this evening, its already gone.
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                Some investments are knocked down for being illiquid.

                One thing whiskey has going for it is a lack of illiquidity.

                Cheers!

                -PoF

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                • #9




                  I bet he meant 100% – forgot the % sign.

                  WCI, that link goes to a post where you have combined some numbers like 45-50 and its just one portfolio. Wondering if that was just a title thing.

                  Back to the OP’s question though – I have been thinking recently after reading a couple of indexing books. What if we didn’t have a stock market? I mean how would you grow money? Basically thinking fundamentally, why is the stocks and bonds “portfolio” considered great or the gold standard? I understand the spreading the risk/diversification,but before there were index fund, what did people do? I am sure they survived fine. Is it just coming down to the basics that you believe in US(s&p)+world(International stock) growth and putting money down in a group of companies that include the good and bad because one cannot pick the good from the bad (stock picking) anymore?

                  Can people survive a 10 year bear market? Who says market can’t decline for a while before going back up.

                  Just doing thought experiments.

                   

                   
                  Click to expand...


                  If there were no index funds I would look for some low cost, low turnover actively managed funds. If they didn't exist, I'd buy individual stocks and bonds. If the market didn't exist, I'd look to buy into privately owned companies, start my own, buy real estate etc.
                  Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                  • #10
                    Sorry 100%, yes my portfolio is out of position. But over the long term I have found that very few assets return what stocks do without the hassle of partnerships and real estate. So it seems the consensus is no to the non standard assets.  I do plan on revamping the portfolio into a Boglehead three fund portfolio later this year.

                     

                    And yes whiskey seems like a better NSA.

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                    • #11
                      http://www.rarewhisky101.com/my_files/Charts%20and%20Insight/h.%20Jan%202017%20Charts/Apex_indices_31012016.png

                      Just three years ago, you could buy a Macallan 25 for $700.  It is now $1500 at my local bottle shop.  Even with a 25% commission/shipping fee to auction house, this would still be a good profit.  This isn't even a rare whisky.

                      Since I plan to (eventually) drink my booze, I guess it would be less of an investment and more a collection.  However, similar to Munch's The Scream or Semper augustus bulbs, as long as somebody is willing to pay you more than you spent, until the bubble pops it should be considered an asset.  Besides, the hunt for this year's Pappy or the newest Balvenie release is a lot more fun than the other 99% of my investing!

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                      • #12




                        http://www.rarewhisky101.com/my_files/Charts%20and%20Insight/h.%20Jan%202017%20Charts/Apex_indices_31012016.png

                        Just three years ago, you could buy a Macallan 25 for $700.  It is now $1500 at my local bottle shop.  Even with a 25% commission/shipping fee to auction house, this would still be a good profit.  This isn’t even a rare whisky.

                        Since I plan to (eventually) drink my booze, I guess it would be less of an investment and more a collection.  However, similar to Munch’s The Scream or Semper augustus bulbs, as long as somebody is willing to pay you more than you spent, until the bubble pops it should be considered an asset.  Besides, the hunt for this year’s Pappy or the newest Balvenie release is a lot more fun than the other 99% of my investing!
                        Click to expand...


                        Post of the day!

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                        • #13
                          We own one small rental property worth less than 10% of our net worth, and we buy EE and I bonds every year. Everything else is either primary home equity or index mutual funds in retirement accounts or taxable accounts. Completely comfortable with this arrangement, and very happy with the price (9 basis points across entire portfolio).

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