I'm 22. Just graduated from college half a year ago. Been working since then and have started my own brokerage account. Also have a 401k and Roth IRA.
- Roth has tanked 33% since inception (March of '11).
- 401K fluctuates around 1-2% daily. Losses and gains are minor and temporary.
- Brokerage account, same story as 401k. I'm long on all my stocks so I don't trade too much.
Before working, I never really paid attention to the markets or what was going on in terms of business news/events. I mean, I knew that the economy was going to shit at the beginning of my Sophomore year in college (Fall 08'), but before that I was completely clueless as to what was going on around me in the world.
What was it like to be an investor during the bull years? When the going was good and everyone was doing okay to great. Investments can range from real estate to simple long/short equity strategies, or the more advanced investing products HNW clients invest in.
What was it like? What kinds of returns could you realize in the short/long term?
I'm only curious because I was 'born' into this economic shit hole with my investments and it's been a boring/bumpy ride.
Can't wait for the recession to end. Tell me stories, sirs, of your magnificent, yet realistic, investment successes.
go to all cash. wait for euro collapse. USD will surge. all risk assets will go to crap. even gold might take a tumble. then put it all into LULU because we will have by then transitioned into a pure yoga-based economy.
haha, this is awesome
I focus on real estate private equity
In many ways it was tougher being an investor in the boom years (2005'ish to 2007) than post-Lehman (2008). The reason being that assets didn't seem cheep especially in 2006 - 2007. It was hard to tell that the sector was overvalued though, because other asset classes were overvalued as well and in some cases commercial property looked favourable compared to equity and fixed income in terms of relative valuations (dividend yields, yields to maturity, etc...).
The bigger reason why it was difficult was that there was so much competing money that was cheaper than ours. By the 2nd half of 2006 we came short on everything we bid on. It was great for our existing portfolio of asset that we had acquired in preceding years, but it was difficult to put capital to work responsibly. We sold most of the deals that I had worked on in 2006 / early 2007, not because we were geniuses, but because the valuations were so high. At those valuations deals that we had underwritten to make high teens IRRs net to investors made 25%+ and in come cases more than 30% due to the run up in valuations. We just wanted to realise our carried interest!
2009 / early 2010 were fabulous times to invest. Assets started to make sense in a text-book way again and there were interesting deals as long as we were able to look across the capital structure to see where the value was (e.g. mezz, senior debt, etc..). We even saw deals below replacement cost!
Since late 2010 it's been less interesting to invest due to the run up in valuations of commercial assets in key cities and the large REITs re-capitalising themselves during the downturn. There are still a lot more interesting deals to be done, but unlike pre 2005 these aren't usually outright asset acquisitions, but rather looking at refinancing situations and assets with troubled owners. All of the actions by the various governments and monetary authorities (quantitative easing, bank bailouts, etc...) has delayed the de-leveraging that needs to happen in the sector and has left fewer opportunities for opportunistic investors.
My advice to you would be to start saving money now to do a masters in a few years and to avoid getting into debt in the mean time. When it comes to personal and credit card debt, just say no.
The less leverage you have the more options you will have in your career, personal life and investments.
Thanks for the detailed write up. Interesting to see your point of view from a private equity perspective. What about your personal investments? Did you invest in the stock market? What kinds of returns did you see there?
As for my finances.. I have zero debt. Excellent credit. I'm very well in control of my spending and saving habits.
Thanks again.
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