2011 was not a good year!!!

[ucanit]

My net worth dropped $5,456.88 over this past year. Damnit!!! I'm spending it faster than I'm making it!!

[daisycutter]

ucanit, I don't think anyone had a good year in 2011. With your investing knowledge, I have no doubt that you will make that up in no time! I think 2012 will be better, because so many damn people are so negative.

[ucanit]

Hell, it's even worse than I thought, daisy!! My income for 2011 was up $9,568 over 2010...and I still had that $5,456.88 loss in personal net worth. My son, who will inherit all my stuff someday, thinks I'm living too high-on-the-harley (oh, excuse me, that's supposed to be high-on-the-hog...no, I really was high on my Harley...damned good thing I didn't get pulled and have to blow into that little breathalyzer straw! )

Honestly, the depreciation on my E350-4Matic is what dropped my net worth value. We sure take an ass-kicking when we purchase a car, don't we?

[daisycutter]

ucanit, I have been told that when you buy a new car, it loses 25% of its value as soon as you drive it off the lot. But I look at it as a good investment if you hold onto that new car for at least 12 years or more. The way these cars are made now, the average person should have no problem getting at least 150,000 miles out of a car.

Is that E350-4matic a BMW, or Lexus?

Also, do you think 2012 will be a good year as far as the financial markets are concerned? When I see so many people negative on the markets, I look at that as a contrary indicator, and kinda get excited!

[ucanit]

It's a Benz.

I don't know about the financial markets in 2012, daisy. I don't expect that we'll see much of a change over what happened in 2011. Maybe a little better...my guess is around a 2-4% annual gain...IF, that much.

Here's the deal. Euro markets will continue to wallow...causing exchange rates to be unfavorable for us. China will temper the strength of the Yuan, also having a negative impact on dollar exchange rates. The U.S. will continue to try to borrow our way out of economic distress...lowering the purchasing power of dollars. Unemployment will remain above 6.5%, salary rates will remain basically flat (the employed will get small raises but unemployed people forced to eventually return to work will earn considerably less). Banks will begin trying to unwind their "shadow inventory" of housing...keeping market prices and new construction low. There is not a lot of positive news for investors.

Cyclical investing will continue to work well. There are some companies that go through the same cycles year after year after year. The overall market will increase slightly during the first quarter and into the second (about a 4-7% increase), followed by a significant pull back (probably a 6-8% drop), and that followed by a small increase just before the election (5% or so), about a 3-4% drop after the election and a year-end rally that will put the stock market averages back within 2% of today's numbers.

I've said it before and I'll say it again...only invest in companies that deal in necessary commodities with elastic pricing and also own assets that increase in value with inflation (have intrinsic value) AND have the ability to continue to grow market share by eliminating competitors and by attracting the limited amount of organic growth as it becomes available.

[daisycutter]

ucanit, It seems like we have a ton of stuff to worry about this upcoming year. Israel could confront Iran this year, and the United States could take part. But the TREMENDOUS debt burden of Europe, and the United States is my biggest worry. Both parties better confront the debt burden or we face yet another downgrade from credit agencies. Like i said over and over again, either we take care of our debt, or the market will do it for us, with devastating consequences.

On a brighter note, our dividend growth fund from Vanguard scored a nice gain this year, of close to 9 and a half percent! I guess that proves your theory of "intrinsic value". I plan to hold this fund for quite a while!