Equity Market Returns - What to Expect - Bad News

Did you know that you should expect equity investments in the UK or US to return only about 5-6% each year. Surely not you say, what about the recent very high returns from the early eighties until recently. Well, I'm afraid they were mostly an illusion. Sure, they happened, but my point is don't expect them to be repeated anytime soon.

Over time, equity investments can only deliver returns based on increases in a countries Nominal GDP, for if they returned more, then they would be making more and more profit. Fine you say, what's the problem with that, but let me tell you the profit they make is at your expense. Yes, that's right. You see, it's like a pie, and each 'thing' that produces gets a share of that pie. Now, GDP is the pie, while companies, people and resources like raw materials and land are the slices.

So, what about those recent high returning years? Well, as I said, it is an illusion to think they are repeatable anytime soon. Since the early 80's, a number of elements combined together which re-rated investors perceptions of value. For example, interest rates fell. And as investors received lower and lower yields on cash and bonds, so they switched into equities and boosted their price. Of course, here in January 2009, interest rates and yields are very low; you don't need me to tell you which way they go next. There were other effects as well, but we will leave those for time.

So, if equity investments really do produce such low returns in the long-run, what does this mean for you retirement portfolio? There is very little good news I'm afraid. Firstly, I suspect that a return of 5-6% over the next few years is optimistic. Excesses of the past ten years or so need to be unwound, and some of the 'secular' elements I described above will reverse. Investors need to reappraise their portfolio and retirement planning in the light of a less rosy future and consider selling equities into any 2009Q1 rally.

Disclaimer: This Essay is a personal opinion and does not constitute investment advice

Richard Noble
http://moneydelusion.blogspot.com/

How YOU Can Help Save Thousands Of US Soldiers In Iraq

No matter what argument the USA government has put forward on why they had to do the Iraq war, it's obvious that OIL is one of the reasons for the war. And because of this war in Iraq, US soldiers continue to die on a daily basis.

And no matter how much you hate and scuff at the US government for the war, they didn't have much choice. The people of USA need the oil and the government has to get it for them at ANY cost. Even at the cost of its soldiers' lives.

But do you know what is tragic? It's the fact that such deaths from such wars as the Iraq war can be avoided!

They can be avoided if we can reduce our dependence on oil. And we can reduce our dependence on oil by using alternative energy to power our vehicles and other such fuel consuming machines such as generators.

As incredible as this sounds, it's possible and even now a reality.

we can do without all that oil that we consume on a daily basis, not only in the USA but all over the world.

The oil we consume in powering our cars and other vehicles can be reduced drastically...

... by powering our vehicles with WATER!

Yes, you heard that right. We can now power our cars with water and by so doing reduce our dependence on oil.

The less we get dependent on oil, the less we would need to get involved in such wars as that in Iraq.

And the less we get involved in such wars, the less our soldiers will die!

So, yes, you too can get involved in helping to save the lives of US soldiers in Iraq by powering your car with water and helping to spread the word about it.

To get involved in knowing all there is to know and in learning how to POWER YOUR CAR WITH WATER for FREE, visit Water for Gas Secrets ==>
http://www.WaterCarSecrets.com

Buying a Hybrid Consider the Costs

Even though hybrid cars currently cost more initially than the conventional car, many people are coming round to the idea of owning & driving a hybrid car. This is because hybrid cars are both environmentally-safe and fuel efficient. If more people drove hybrid cars, the environment would be less polluted and safer for everyone.

On the increase

Over the past ten years or so, the number of hybrid cars on the road has increased rapidly. Indicating that people are becoming more concerned about the state of the environment. If you're not sure whether or not it is worth it to purchase a hybrid car, this article will help you make an educated decision. We'll be going over the cost of hybrid cars.

Tax Breaks for US Drivers

One thing that helps make the hybrid car more affordable is that the U.S. government now offers a tax deduction for those who choose to use hybrid cars. The law, passed by the U.S. Congress, took effect on January 1, 2006. Despite the fact that the deduction is only in its first year, as much as $5,000 USD can be deducted from your taxes just for driving a hybrid car.

Reduced Gas Costs & helping the Environment

When you consider the fact that hybrid cars cost about $4,000 USD more than the average conventional car, the tax deduction means you'll only have to pay around $900 extra dollars out of pocket for a much better, safer car. Also, when you factor in how much less gas you'll have to purchase for a hybrid, the idea of purchasing a hybrid car becomes even more appealing.

Higher Repair Bills?

A lot has been written about how hybrid car owners have to live with the higher cost of repairs on their vehicles However, this slight disadvantage is overshadowed in real terms by the huge amount of fuel savings hybrid cars provide over time..

Hybrid cars get approximately 70 miles per gallon on the highway and 50 miles per gallon in the city. Conventional fuel efficient cars only get around 27 miles per gallon in the city and 30 miles per gallon on the highway. This is a big difference and results in hundreds of dollars of saving over time.

Replacement Battery Costs

A perceived disadvantage to hybrid cars is the cost of a replacement battery. Replacement batteries for regular cars are around $50-150 USD, while it costs around $2000-$3000 USD to replace a hybrid car's battery. However, this isn't that much of disadvantage because the hybrid car's battery only needs to be replaced every 8-10 years, so spread that cost over a period, put it against fuel savings & its not really an issue.

Tyre Costs

Tyres on a hybrid car are also a bit more expensive to replace than on a conventional car. This is because hybrids require the use of special high mileage tyres.. On the positive side, hybrid cars only need new tyres every 30,000 miles, which is better than conventional cars which need new tyres more frequently..

The hybrid car's internal combustion engine is smaller and lighter than the conventional car's combustion engine. Thus, a hybrid car's engine is more efficient than a regular car's engine is.

Insurance Savings

Another advantage to hybrid cars is that most insurance companies now offer a discount to hybrid car owners. This is because hybrid cars are much less likely to be involved in accidents, which saves car insurance companies money.

There is a general consensus among many people that the hybrid car essentially pays for itself over the long run. It may seem expensive at first, but it is a worthwhile investment. Why not save some money in the long run by purchasing a hybrid car now?

Toby Russell & his website http://www.hybridcarlatest.com offers, news, views and information about the hybrid vehicle market and the developments in that market sector just around the corner.