Five investors on investing in the 5% world

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Key Points

Gabelli says most investors are overly focused on the tension between the Federal Reserves campaign to rein in inflation with higher interest rates and the governments effort to revive manufacturing and growth in the U.S. ..

. Gabelli expects the higher debt to drag on stocks, preventing the 10.2% annualized returns that stock investing provided investors for the past 100 years..

But equity markets have significantly outperformed cash." Malik says that some investors have been trying to time the stock markets decline or rise since the Federal Reserve began changing interest rates, but she says most fail to do so successfully, often getting in and out of the market at precisely the wrong time..

Investing in less-traditional holdings like farmland, timberland, emerging-market stocks and private credit are good ideas at the moment, she says, especially with the prospects for rising government debt to ensure inflation remains high for years to come..

While investors have piled into short-term and cash-like assets, such as money-market funds, Gitlin says now is the time to extend out into longer-dated bonds, which rise in price more when yields fall..

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