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Obviously this article shows up when the negative rates are already here, with the benefit of hindsight. What I am more interested in at this point is what is a good, safe alternative for a small time investor who’s already overweight on equities and housing. Bonds used to be the sensible pillar that worked at times when stock market crashed and now it doesn’t really make sense to use them for a small guy.

Not sure what your criteria for "good, safe" is but if you're interested in similar asset classes:

Government bonds in foreign currencies. Of course this exposes you to whatever that country does with their central bank and to foreign exchange rates.

Corporate bonds, obviously riskier than government bonds but at least you can get positive interest rates in your preferred currency

Preferred stock, which are similar to bonds. Before you invest in these, make sure you know how they work. They can be called back by the issuer

Other asset classes which are less safe but could help you diversify: crypto, commodities and precious metals, collector's items and art, foreign currencies. Wouldn't really recommend putting too much money in this

Invest in reducing your energy bill if you haven't done so yet. solar plus storage plus house isolation. Should also raise the value of the house. In theory.

Can you or anyone recommend a unbiased solar ROI calculator? I have been looking for something, bu every site that I find is trying to sell me solar, so it's not too unbiased. I already have a couple quotes, and I know roughly what my rates will be, so I should be able to plug all the numbers into something to find out what % ROI I will get.

Make a spreadsheet with one row per year. You can assume your system will last 25 years, depending on the panels and type of inverters you get.

Put your upfront costs at the first year's row (you're buying the system).

Calculate how much the system will save you in the current year (365 days), and put that in another column ("energy income") on the first row.

Each future energy income row gets discounted by ~7% multiplicatively: (1/1.07) * prev_row. This is to account for your ability to earn money from other investments, and to discount the future energy flows because of uncertainty. You can tweak this number up or down if you think the regulatory or technical value of solar energy is riskier than I do, or have different opinions about the stock market.

If the sum of the energy income column is bigger than the sum of the expense column, it's a good idea to buy solar. Shop around for the best deal you can get.

Rough numbers: https://www.solarpowerrocks.com/wp-content/uploads/2016/12/s...

Google Sunroof: https://www.google.com/get/sunroof

Always buy the panels (no PPA), don't buy storage unless your net metering agreement with the utility is terrible (likely kills the ROI, storage isn't cheap enough yet). Ensure your tax liability is enough to capture the full 30% federal tax credit. Check for state, utility, and SREC benefits in your area. Panels are 25 year warranty, stay away from SolarEdge inverters; their mortality rate has skyrocketed over the last 12-18 months. Paying cash is best, otherwise find the cheapest debt you can find to finance whatever remains after incentives.

I don't have a good calculator, but step 1 is to make sure you BUY the panels, and not rent them or fall into any kind of weird plans where you resell some energy for free panels or whatever.

So your ROI is pretty much calculated with: How much do the panels cost (installed) How long do they last, whats expected maintenance, etc How much energy are they expected to produce Whats your electricity bill.

From there its pretty simple math. The hardest part is how much energy they are expected to produce, and no online calculator will help figuring out how much sun hits your roof.

For the production side of the calculation, take a look at the National Renewable Energy Laboratory's PVWatts tool. Most of the installers build their ROI tools on top of this. https://pvwatts.nrel.gov

Just make one? Calculate how much the install costs per kw, and how much your electric costs...

Take the portion you want to protect with least risk, divide it into $250K chunks (the FDIC limit) and put each in a savings account with a different bank. You'll make a small interest rate and you'll have FDIC insurance covering the entire amount. That's safer than any of the Treasury securities since you will still have the backing of the US government, you can use it to rebalance your portfolio at any time, and you don't have interest rate risk. This is one area where you have an advantage over the big players like Pimco, who can't protect themselves with FDIC insurance.

If in the U.S., buy your $10k quota of Savings Bond, Series I: Pays at least the CPI-U inflation rate, liquid after one year, favorable tax treatment, highly convenient.


At least at the moment, it would seemingly make more sense to invest in 1-year treasury bonds. The interest rate is higher, they are more liquid, they are more convenient to buy and sell, and they are taxed the same as I-bonds.

There's also no limit to the amount you can buy.

And what are you going to do with that money in one year. If you’ll need to invest it again the answer is not so obvious.

If you expect interest rates to go down in the future, the 10 year bonds would be a better investment

If you expect interest rates to decline, bonds still make sense as their value increases. US fiscal policy is unlikely to have negative rates in the foreseeable future.

It's only government bonds that go negative. Corporate bonds will always provide a positive yield.

Apple issued negative bonds in some European country recently, if I understand this[0] correctly. Anyway, I don't think there's anything preventing a company from issuing negative bonds. Whether or not anyone would buy them is another question.

[0] https://markets.businessinsider.com/bonds/apple_incsf-notes_...

Except they don’t already in many cases.


Well one has to consider that it's pretty much the same big pool of money chasing both. This money pool thinks that German 10Y yield should be around -0.60%, while the Italian 10Y yields a juicy 1.62%. That says quite a bit about the future solvency issues around Italy.

Bottom line is that if there are still positive yielding bonds in a market dominated by negatives (we're not yet there) the risk of default is priced in.

If you can look into the future w that certainty you should trade stuff.

Bitcoin and gold imo, in addition to a balanced portfolio of stocks, bonds and real estate.

> Bitcoin and gold imo

Bitcoin makes zero sense as an investment. Doubly so during a recession.

On that second point, we don't know that yet. It didn't exist during the last recession, so it's still a guess as to what'll happen.

Aside from buying physical gold at a refinery, is there a place to buy gold from the equities market? Sorry if this question sounds naive/ridiculous. If it's in my country, people would go to gold/jewelry shops and buy gold. In the US, I'm not sure if it's the case. Thank you.

Check out gold ETF's. They hold the physical gold so you don't have to, you just buy a stake in the physical assets. The ETF prices will vary depending on the specific ETF, but you can find ones that track very closely.

You can buy a Gold ETF such as GLD: https://www.spdrgoldshares.com/


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