My 3 Favorite Investments for Right Now | Summary and Q&A

TL;DR

Stocks are expensive and indicators point to lower returns, making it crucial to diversify investments to protect against a potential stock market crash. Three recommended investments are peer-to-peer lending, real estate crowdfunding, and robo investing.

Key Insights

• 🥳 Stocks are currently expensive, with an average price to earnings ratio well above historical averages.
• 😘 Indicators such as higher interest rates and wages suggest potential lower returns and a stock market correction.
• 🤖 Diversifying investments with peer-to-peer lending, real estate crowdfunding, and robo investing can protect against a stock market crash.
• 👻 Peer-to-peer lending allows direct connection between borrowers and investors, with low minimum investment amounts.
• ✋ Real estate crowdfunding provides the opportunity to invest smaller amounts in different types of properties, with professional management and high returns.
• 🥶 Robo investing automates investments based on individual needs, reducing the risk of panic selling and providing a stress-free investment option.

Transcript

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Questions & Answers

Q: Why are stocks considered expensive right now?

Stocks are considered expensive due to an average price to earnings ratio in the S&P 500 at 25 times trailing earnings, well above historical averages.

Q: What indicators suggest lower returns for stocks and a potential stock market correction?

Higher interest rates and wages, as well as the reversal of monetary stimulus from central banks, have historically led to lower returns and bear markets in the past.

Q: How does peer-to-peer lending work as an investment?

Peer-to-peer lending platforms like Lending Club connect borrowers directly with investors, cutting out the middleman. Investors can invest as little as $25 in loans and receive principal and interest payments from borrowers.

Q: Why is real estate crowdfunding a recommended investment?

Real estate crowdfunding allows investors to invest smaller amounts in different types of properties, diversifying risk. The platforms handle all the payments and returns, providing professional management and high returns.

Q: What are the benefits of robo investing?

Robo investing platforms like Wealthsimple and Betterment automate investments based on individual needs, age, and other factors. They invest in groups of stocks and bonds, reducing the risk of panic selling and providing a stress-free investment option.

Summary & Key Takeaways

• Stocks are currently expensive, with an average price to earnings ratio in the S&P 500 at 25 times trailing earnings.

• Indicators such as higher interest rates and wages suggest potential lower returns and a stock market correction.

• Diversifying investments with alternative asset classes like peer-to-peer lending, real estate crowdfunding, and robo investing can protect from a stock market crash.