Would the average investor be satisfied with a 6% annual return? Is that a modest rate of return? Is a 6% annual return realistic for the average investor?
Not a hope in hell!
17 trillion dollars are invested at negative interest rates today. Much of that is smart money. That means that putting money in a bank would require depositors to pay the bank rather than expect some interest payment from the bank.
Depositors paying the bank?
In his profoundly influential book, The Battle for Investment Survival, originally written in 1935, Gerald Loeb states: “Indeed, should some super-solvent agency agree to preserve the buying power of capital for a substantial length of time at a stated fee per annum, informed people would embrace the plan enthusiastically if they felt there was any real possibility of the agency staying solvent.”
Throughout history, hyperinflation, inflation rate of 50% or more per month, has victimized savers. The Weimar republic after World War I, Venezuela, Hungary, Zimbabwe, and Yugoslavia more recently, are examples. Wouldn’t savers gladly pay 1% annually to keep their money in safe-haven assets such as the Swiss franc or the US dollar, backed by the largest economy in history?
In this global environment, Monday Morning members have averaged a 6% real return for several decades now. How do they do that?You need to login to view the rest of the content. Please Login. Not a Member? You can now sign up for a one-month free trial membership. Join Us