The 16% Solution by Moskowitz - Posted by Robert Campbell
Posted by Robert Campbell on August 17, 2003 at 12:34:19:
As evidenced by the Amazon.com sales rankings, the book on tax lien investing by Moskowitz (The 16% Solution) that was written in 1994 continues to be a best seller.
In reading some of the reviews, it was mentioned that 16% returns are no longer readily available. Since the Moskowitz book was published - and this lucrative area of investment was widely exposed to the general public - competition (institutional and private) has driven yields down to single digets.
In fact, one reviewer said 4% was more like it today, not 16%, for the majority of tax lien investors.
Can anyone verify or refute this observation?
Second question for comments …
If an investor knew a tested stock market timing system (using no-load, S&P 500 Index funds) that has yielded 14.8% annual returns since 1954, would most investors consider this to be a more attractive alternative to investing in tax liens?
The buy and hold method of stock market investing (no timing) has yield a 12% return since 1954. Compound this 2 to 3 percent advantage over the course of 50 years and you’ll see why “compounding” in the 8th Wonder of the World.
Interestingly, you rarely hear about timing the stock market with no-load mutual funds because no one has a vested interest in telling you about it.
I’d be grateful for insightful comments.