Investments Discussion between, investment, stocks, discuss

DoubleDip

My fellow would be CFA charterholders (Hopefully) :-)

we discuss a lot of topics on this forum-some good , some bad and a lot of Bull Shi*. Why don't we use our so called investment skills that we are supposed to have championed by now to talk about our real life investments.

To start with what would you choose between the four if you have $50K to invest

- Real estate in US (NJ area)-ofcourse with leverage.
- US Stocks?
- Emerging market (India) stocks
- Emerging market real estate- again with leverage.

The aim is to maximize the total return (Income plus appreciation).
Where do you guys invest generally???



Edited 1 time(s). Last edit at Wednesday, July 21, 2010 at 05:38PM by sachin123.

bkballa

A new casino is Vegal has just opened up that promises attractive returns.

OR

you can send that $50K to me and my associate, Bernie Madoff, will send you a monthly statement that will show you whatever return you like to see.

On a serious note, out of the four options given, I'd put my money in EM stocks.

aidebaobao

uhm i thought the purpose of the charter was to train us not to think jus in terms of return but ratrher risk retrurn based on goals/life situation....................but ok for the sake of game in term of cap appreciation ( no mention was made as to time horizon ) then emerging stock would be your best bet but again we need to context the question ................apologies to all for my many typos and spelling

zwjy

Fair point pimpineasy.

Ok let us talk specific. I believe that EM stocks, specially India is overheated and is up for a correction. Which sector/Stocks are you referring to Ashwin?

and i feel the same for EM Real Est too. one year back the situation was different though.

I am bullish on US R.E. I think it has bottomed out or will bottom out in another 3 months.

Let us take this specific case of US RE
Cost of R.E- $420K
Down-$50K
Leverage for 30 yrs @5%- $370K. This makes monthly mortgage of $1985
Taxes pa.- $6k
Maint p.a.- $4.2 K
Rental Income- $25K p.a.

What do you say?

lcw77

$34k - outflow p.a.
$25k - inflow p.a.

What am I missing here?

__________________________
Beet Farmer, CFA

aidebaobao

I believe EM market is up for correction by the end of the year esp India.
I think developed market High Grade bonds will out perform as compared to the other assets classes you guys are talking about in the short run.

Zestt

Good luck finding financing for your investment property based on the the borrowing rate and debt service coverage.

__________________________
Beet Farmer, CFA

IAmNeil

Why limit yourself to real estate and stocks?

Corporate debts also present some attractive risk/reward opportunities.

I don't know how anyone can look at the housing inventory numbers, and the massive decline in activity coincident with the expiration of government subsidies, and think US real estate doesn't have another leg down. Do you know what would happen to housing if/when Fannie and Freddie stop buying mortgages? I work for a bank and there is no way I am lending @ 4.75% for 30 years on an asset that will plummet if the government stops financing its purchase. If I can flip the loan to the gov and collect a 4 figure "origination fee" of course I write the loan, but if I have to hold that on my books I need a higher ROIC.

Analti_Calte

sjuhawk Wrote:
-------------------------------------------------------
> Why limit yourself to real estate and stocks?
>
> Corporate debts also present some attractive
> risk/reward opportunities.
>
> I don't know how anyone can look at the housing
> inventory numbers, and the massive decline in
> activity coincident with the expiration of
> government subsidies, and think US real estate
> doesn't have another leg down. Do you know what
> would happen to housing if/when Fannie and Freddie
> stop buying mortgages? I work for a bank and
> there is no way I am lending @ 4.75% for 30 years
> on an asset that will plummet if the government
> stops financing its purchase. If I can flip the
> loan to the gov and collect a 4 figure
> "origination fee" of course I write the loan, but
> if I have to hold that on my books I need a higher
> ROIC.


That's a good point. Thanks.
But I have been told that with 15% down, 5% fixed is available for 30 yrs.

Darien

sachin123 Wrote:
-------------------------------------------------------
> Fair point pimpineasy.
>
> Ok let us talk specific. I believe that EM stocks,
> specially India is overheated and is up for a
> correction. Which sector/Stocks are you referring
> to Ashwin?
>
> and i feel the same for EM Real Est too. one year
> back the situation was different though.
>
> I am bullish on US R.E. I think it has bottomed
> out or will bottom out in another 3 months.
>
> Let us take this specific case of US RE
> Cost of R.E- $420K
> Down-$50K
> Leverage for 30 yrs @5%- $370K. This makes monthly
> mortgage of $1985
> Taxes pa.- $6k
> Maint p.a.- $4.2 K
> Rental Income- $25K p.a.
>
> What do you say?


This guy says it right. Although Indian markets are high, I have still invested in a few stocks, I will invest again when it falls.

If I have to choose, US stock market looks quite attractive now because of the fall.