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07-Feb-2007

Best Investments For The Next Decade

The biggest question on the minds of the smart investors at the moment is what will be the best investment in the next ten years? In last ten years it has been oil, metals, SnP 500 and residential real estate. There is no reason to think that history will repeat for these four again. As a matter of fact, these four could slump like never before.

Stocks will go down due to economy and its debt burden. Metal will lose its lustre because of supply demand relationship and burst of bubble. Alternatives are replacing oil and better technologies will find more oil in the ocean. The biggest reason for oil’s slump in price is the coming Great Depression of Asia. India and China will require very little oil as they experience double-digit contraction. Residential real estate is in trouble because of the mortgage debt burden. In addition, the Federal budget deficit, social security burden and medicare promises are slowly and steadily shifting to property taxes. Property taxes will quadruple in the next ten to twenty years sealing the fate for residential real estate.

Where can one invest from here? Three areas in particular are hotly tipped. These three are Domain Names, farmland and cash in the bank. A fortune will be made buying and selling domain names. Buying domain names for cheap and then flipping the same to an interested buyer is picking up heat, and there are investors making hundreds of thousands of dollars buying and selling domain names.

Farmland is virtually real estate tax exempt in many states, and in those where it isn’t, the real estate tax on farmland is still very low. In addition price of Wheat, Corn, Soybean, Oat, Rice is set to quadruple in the next ten years due to climate changes, drought and excess demand from alternative fuel requirements. The Farm output will be something people will like. The farmland all over the country will accumulate slowly and steadily while residential real estate (developments, condos, town homes and non-farm single family homes) will drop in price.

The other option is keeping cash in the bank. People who try their best to get debt free and then keep their cash in the bank in CDs will benefit, under the following scenario. If the economy goes south three percent per year, and you make one percent in the bank then you have preserved your capital, and after ten years, your buying power has increased by 50% (compounded).