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alternative investments to stocks

By Terry Savage on August 06, 2017 |

What are some good options to move my investments into, if adjusting my money out of stock funds. I have moved some into european real estate funds. Would bond etfs be a good option? What other options would you recommend? Thank you

Terry Says

Aha, that's the question on everyone's mind:  Where do I go if I don't stay in stocks?  The alternatives are not very attractive these days.  Money in the bank pays literally nothing.  But bonds can lose value when interest rates rise -- and the Fed promises to raise rates.  (Why be stuck in a 3% long-term bond, if higher rate bonds will soon be available??)  Real estate is an interesting  alternative, but has its own set of risks.  Likely you'd want to do that through a Real Estate Investment Trust (REIT).  (And, by the way, what makes you so bullish on real estate in Europe??)If investing in bonds, I'd keep maturities (duration) shorter than three years. Recognize that higher yields imply higher risk.  So pick a short-term bond fund.   And perhaps you might want to move into more conservative stock funds -- balanced funds  or equity-income funds --and let the professional make those decisions for you.

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