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Senior Contributor
Posts: 594
Registered: ‎11-20-2016
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Re: Buy the farm/Sell the farm question????

you should diversify your assets.....the old school method was 1/3 in hard assets like real estate, 1/3 in stocks, and 1/3 in bonds and CD's......and then rebalance every so many years so that you are forced to buy low and sell high.

Advisor
Posts: 8,555
Registered: ‎02-06-2014
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Re: Buy the farm/Sell the farm question????

If it is a cash deal I think I'd keep my powder dry and wait for blood in the streets in something, which will come in something, some time.

 

Although I'll admit that I've never gotten fully reinvested in stocks since I cashed out in '07.

 

Not as bad as it seems though, in fact money moved to bonds has outperformed the SP 500 since then. Although money that was out and went back in somewhere near the low has performed spectacularly.

 

That said, the bonds have been sold and sitting on nil yield and waiting isn't fun. I'm still having a hard time finding any value anywhere.

 

You have to admit that the central banks and governments have navigated around potholes sensationally over the last 8 years-far beyond my expectations (although sluggish growth was nice for bonds).

 

My worldview says that is never a permanent thing, regardless of who's in charge.

Advisor
Posts: 8,555
Registered: ‎02-06-2014
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Re: Buy the farm/Sell the farm question????

BTW, that's if you're treating the farmland entirely as an investment decision- a different deal for a young farmer or someone with tons pf paid for land, if they happen to want it.

 

I'm a closer to the end of my investment horizon than the beginning, did OK through both the '00 and '08 crashes.

 

But for youngsters I'd observe that plain old fashioned portfolio theory worked pretty well (not, all stocks, all the time because they only go up) throughout, in hindsight.

 

Make regular contributions. Keep a percent equal to your age in stocks with the balance in bonds and rebalance with regular discipline- say quarterly. When stocks are going up you automatically take some money off the table. When stocks are going down bonds typically go up and you've got some powder to buy them cheaper.

 

A set of circumstances may present where nothing works but that is about as simple and easy as it gets and well proven over many decades.

 

It is the allocations and rebalancing that is key.

Advisor
Posts: 8,555
Registered: ‎02-06-2014
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Re: Buy the farm/Sell the farm question????

Misstated that. It would be % bonds equals age.