gfp: A lot depends on current valuations. Past results are no guarantee of future results. Right now I would characterize general equities and residential real estate as overvalued. Hard assets have not had the run up seen with the other sectors. And if Mortgage rates stay above 7% or go higher then real estate is going to take a big hit. Right now there has been a bit of a standoff. Home owners thinking of selling are not, because why trade in a very low mortgage rate for a higher rate. But eventually there will be enough owners that NEED to sell due to financial or other circumstances. Once that happens there will be a re-pricing. My nephew is a regional head of a big mortgage firm. He's never seen this bad of a slowing of new contracts to purchase. In 30 years in the industry. He's had to lay off 3/4 of his staff of many multistate offices. So real estate of any kind over the next 2-3 years is going to be a losing proposition. It will vary by region. By neighborhood. But it's all going to be under pressure. And the PE ratio of the S&P 500 will have to drop under the historic mean before that is an area to buy into. For people like Bar who bought years ago at more attractive valuations it makes no sense to sell. But I would not be a buyer at this point in time. There will some individual exceptions, or sub sectors that might be able to outperform. But as a general proposition just going out and buying an S&P 500 index fund or ETF is not going to work out for you in the next 2-3 years.
Inflation is not under control. It can never be put under control if the Federal government keeps spending so far above it's ability to fund it. We just added ANOTHER TRILLION DOLLARS to the national debt in the last 3 months and 4 days. No Covid crisis (currently), no declared war. Just waste, fraud and theft in unfathomable numbers. And with the people we have sent to Washington DC do you think they will ever see the light, that THEY are responsible for the inflations that is driving up interest rates? Of course not. To them all government spending is necessary and fruitful. Even if it is put on the credit card of future (unfortunate) generations. So hard assets, stuff you can't print in the Eccles Building, is going to have it's day in the sun. You are already seeing this with energy.. Oil is up 40% in the last 4 months. Uranium will follow. Natural gas. Even coal. Pipeline operators. LNG terminals, exploration companies, extraction tool makers, etc. will all benefit. Thanks to our incredibly stupid geopolitical policies I think oil prices will continue to rise, with the occasional dip now and then. Rinear recommended VLO not that long ago. It's already had a nice run in a short time. And it will pay over a 4% Dividend yield while I wait for further capital gains. Hard assets and cash or cash equivalents. That's where to be positioned right now.
