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I would be very cautious about investing in any company that profited from the current pandemic. Many of these companies will see their market shrink over time.
This question is the inverse of “Which investments will perform best over the next ten years?” If we can’t know the best performers in advance, can we be confident we can identify the worst? As the next decade unfolds, there will likely be many unexpected events that will derail even the most carefully reasoned forecasts.
For example, it’s easy to forecast that bonds will be lackluster performers over the next decade due to current rock-bottom interest rates. But if we suffer a prolonged recession down the road, a flight to safety might give government bonds a better-than-expected 10-year return.
I intend to stick with my investment plan. If I’m encouraged by forecasts to tinker with my portfolio, I’ll likely experience tears, not cheers.
Not sure I would bet on the so-called meme stocks. In the short term, the stock market is a voting machine. In the long term, it is a weighing machine. So said Ben Graham, the father of investment analysis.
Treasury bonds. We’ve had a remarkable 40-year bull market in Treasurys. Yields fell to historic lows last year. I think they’ll continue to come back up, driving bond prices down. Yields don’t have to go really high to hurt bond investors—just back to the 3% range or so. That’s about double the current 10-year Treasury yield, but still modest by historical standards. Having said that, most of my fixed income position is in short to intermediate Treasurys. Government bonds provide the best diversification of a mostly stock portfolio.
US growth stocks.