WSJ/Burton Malkiel: Where to Put Your Money in 2012

WSJ/Burton Malkiel: Where to Put Your Money in 2012

<http://online.wsj.com/article/SB10001424052970203462304577134772867322582.html?mod=googlenews_wsj&gt;

Another excellent op-ed piece by Burton Malkiel, author of the classic “A Random Walk Down Wall Street”.

Malkiel makes the following points (summarized – but you should really read the article):

  • Bonds, especially US and Europe, are not positioned to do very well in the future
  • Stocks, especially the US and Emerging Markets are
  • Emerging Markets, in general but especially Brazil and China and even India look good (natural resources, demographics, etc)
  • Single-family houses in the US are less expensive and with ultra-low mortgage rates (see “Bonds” above — a mortgage is the opposite side of buying a bond – it’s borrowing rather than lending!) look good.  (“Housing affordability has never been better.”  Though, of course, that’s contingent on good credit and probably a job.)
  • Costs matter – this was the final paragraph and it’s always worth repeating: “Control the thing you can control — minimize investment costs.  That is especially important in a low-return environment.  Make low-cost index mutual funds or ETFs the core of your portfolio and ensure that any actively-managed investment funds you purchase are low-expense as well.”

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