Related topics: bonds, ETF, gold, investing strategy, real estate
Only the most bearish market analysts expect stocks to return to their March 2009 lows anytime soon.
The recession was recently declared over as of June 2009, and there's less gloom and doom on Wall Street now that the economy is eking out a bit of growth.
So, does this mean it's OK to sound the all-clear for the stock market? Hardly.
The economy may be improving, but stocks are, at best, moving sideways. When you consider that a host of investments are trouncing equities, it may make sense to sell stocks and move at least part of your nest egg elsewhere.
Here are seven investments outperforming stocks. Some are obvious, and some are a bit unconventional. But all are worth considering in these uncertain times.
1. Gold
Gold bugs can get a bad rap because a handful of gold investors are convinced that the dollar will disappear as a solvent currency and we'll all go back to bartering sheep. But it's hard to knock gold's performance over the last year or the past decade. Gold prices are up about 25% in the past two months, far outpacing the roughly 4% gain for the Standard & Poor's 500 Index ($INX) in the period.
A decade ago, an ounce of gold cost $300, less than 25% of what it fetches today. An investment of $300 in a mutual fund keyed to the S & P 500 a decade ago would be worth about $240 today. Don't care for messing with heavy coins? SPDR Gold Shares (GLD, news) exchange-traded fund was launched in November 2004, and initial investors who have held on to their shares are sitting on a hefty 170% return.
2. A self-storage business
An influx of smart money has created a boom in the business of public storage. The chief executive of a California self-storage company recently told The Wall Street Journal that he was getting calls from institutional investors such as Michigan's state retirement system and Goldman Sachs Group (GS, news). Why? Because, managed properly, a self-storage business produces annual returns of 5% to 10%. You buy a property, outfit it with locks and collect rent payments -- you're a landlord without the hassle of fixing sinks or window latches for tenants. To top it off, you may also find tax advantages to owning your own business and writing off expenses.
There are risks, of course. High vacancy rates, theft and property damage can erode profits. Also, a self-storage business is illiquid and could take time to sell once you're ready to invest elsewhere or retire.
