MICHEL PIREU: Six investment options that may tempt you in low-return markets
In September’s memo, Oaktree Capital’s Howard Marks tackles the fact that his prior memo, There They Go Again … Again, of July 26, "generated the most response" in the 28 years he’s been writing memos and a lot of questions in one form or another of, "So what should I do?". "In the low-return world I described in the memo," says Marks, "the options are limited: 1. Invest as you always have and expect your historic returns. 2. Invest as you always have and settle for today’s low returns. 3. Reduce risk to prepare for a correction and accept still lower returns. 4. Go to cash at a near-zero return and wait for a better environment. 5. Increase risk in pursuit of higher returns. 6. Put more into special niches and special investment managers. "It would be sheer folly to expect to earn traditional returns today from investing like you’ve done traditionally (#1). With the risk-free rate of interest near zero and the returns on all other investments scaled based on that … few if any asset...
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