Finance/Investing ITT

[nando]

I'm not saying you're wrong. But I think it would be a good idea to study the currencies that have collapsed and see what actually worked. Was it really gold/hard assets? Or armed thugs who got what they needed by using force/violence? Keeping in mind Americans are one of the most heavily armed (and violent) populations on Earth.

25% of your investments is not just a hedge, it's a bet. I don't have 25% of anything sunk into one investment (I have a lot more than the $8k account i mentioned above, too).

as far as my investments in "paper". That was my point - if everything collapsed, I don't give a crap about gold, dollars, or whatever. I want a sawed off shotgun and as much ammo as I can hold onto. Then I'm coming over to your house, shooting you dead, and taking your womenz and foodz :p

[Farbin Kaiber]

^ Well because exactly just that, it will come back. So, how else would you hold onto a commodity of value to transfer into new, "rebuilt" financial market? The pages of worthless copy paper of the stocks and ETF statements? Documents referring to a currency called a "Dollar" that would no longer exist? Really, you are putting a lot of faith into a concept without backing. All I'm saying is having some backup is a wise move. You don't have to listen to me, or even say I'm right/wrong, just view it as an alternative to the norm.

[nando]

"when"... except you have no precedence. Even massive economic collapses in places like Russia eventually worked themselves out. I think if something like that happened (US currency "dissolves", total economic collapse, the fall of the US government, anarchy, etc), we'll have a hell of a lot more to worry about than where we're going to fill up our tanks.

Basically it will be whoever has the most bullets, not who has the most shiny trinkety stuff. Think about what happened during hurricane Katrina, on a massive scale. What are you going to use the gold for, bullet proof shield? throw it through windows so you can maybe find scraps of food in a shopping center?

And that's assuming you have actual bullion in your posession. Most of the gold securities don't hold any bullion or it's locked away far from the investors. If there's no market, how will you collect? how much of it is tucked away in your house in case the entire world economic system collapses as you fear? If you work for the security company that's paid by a market system to protect the asset, and that market system is gone, what is the incentive not to use your weapons/training to keep it for yourself?

It's really, really far fetched. But it's not far fetched to say that a 500%+ price appreciation in an asset that has limited uses could potentially be in a bubble.

[Farbin Kaiber]

And when a paper currency dissolves, and oil still costs something, one who listened to me would have silver to buy it with.

[nando]

You really think there is gonna be a bubble on a limited resource? That's like saying the oil bubble is gonna pop and we will be back to 99c/gal. for fuel.

Tulips.

Oil has many, many uses and drives most of the world's economy. Gold is useful for electronics, some industrial applications and... shiney trinkets? if 90% of the world's gold supply disappeared, would we still have more than enough of for all of the uses in manufacturing and electronics? I think yes..

where does demand for gold/silver come from?

where does demand for oil come from?

there are many, many examples of limited resources that have been in bubbles. *everything* has limited resources. Unless you've found the secret of perpetual motion.. ;)

[nando]

Investing in anything that yields a return in "dollars" seems like a risky move to me these days ;)

so I suppose working for dollars is risky too? ;)

if you really want to hedge, how about commodities that have real uses? like I dunno, oil, steel, copper, etc? or even better, the companies that create/extract them, and happen to pay good dividends? :)

plus, there's a lot of quality ADRs, that are priced in dollars, but earn their income in other currencies. If the dollar deflates your assets will appreciate with it. If you hold onto bonds, obviously you lose. When people realize that there's a huge bubble in certain commodities, and stop buying at some point, the house of cards will collapse, fast.

When people are burning wheelbarrows full of cash to keep warm, the huge spike in metals could be valid. But so far I don't see many people with a lot of excess cash.. usually the opposite.

[z31maniac]

You really think there is gonna be a bubble on a limited resource?

You really think there isn't?

[Farbin Kaiber]

You really think there is gonna be a bubble on a limited resource? That's like saying the oil bubble is gonna pop and we will be back to 99c/gal. for fuel.

[87e30]

(ever read a balance sheet? ZZZZZZZZZZzzzzzzzzzzzzz).

As an accounting student I will second this, haha.

Pretty good level headed in advice in here. My finance teacher (worked on wall street in the past) was saying similar things. Diversify in a market portfolio and relax. Trying to beat the market is a recipe for failure. Just look at the hedge funds...

[nando]

Yeah, but it's sometimes tough to start investing in "vapor" and getting into something tangible can be a great starting point. Plus many people suggest having at least 25% of your total investments in Precious Metals.

and it's going to hurt when the bubble pops.

[rwh11385]

Yeah, but it's sometimes tough to start investing in "vapor" and getting into something tangible can be a great starting point. Plus many people suggest having at least 25% of your total investments in Precious Metals.

Who? Jim Cramer? ... Most people who make money off giving you financial advice want you to think it's complicated or that you ought to make more transactions than you really need.

It's not tough. Invest money 44% - 28% - 28% in VTI - VNQ - VEU (for example). Simple. $21 for commissions total on Scottrade, and not a million different things to buy in order to be diversified. Repeat once a year or whatever, depending on how much you save/invest. Overthinking investment or trying to best the system is an exercise in futility.

The pros are collecting tons of data, having macros analyze it for them, and making money on making transactions seconds before the market as a whole acts. With efficient markets, you ought not to much better returns, so why not earn the market average returns with a broad market-wide ETF? Why live for your life working and also working on trying to beat the market by gambling?

Might as well pack up a suitcase with money and hit the blackjack tables. At least you're given free booze while you do it, as opposed to stressing out at your computer looking at the DJI or your stock/commodity price updates.

[rwh11385]

Investing in anything that yields a return in "dollars" seems like a risky move to me these days ;)

I mean, it's not as good of investment opportunity as BiosLife, but assets should appreciate in line with dollar. Bonds would be hurt a lot by inflation though.

Besides, VEU is the entire world market outside of the US, so you can diversify internationally if you have little faith here. And dividends, regardless of currency denomination, sure help as opposed to simply price appreciation of a traded good.

[Farbin Kaiber]

Yeah, but it's sometimes tough to start investing in "vapor" and getting into something tangible can be a great starting point. Plus many people suggest having at least 25% of your total investments in Precious Metals.

[Kruzen]

or you could just open a ROTH and buy some low cost index based ETFs as heeter suggests. cheap, effective, and far less risky. the risk component is especially important for somebody who doesn't have experience.

Investing in anything that yields a return in "dollars" seems like a risky move to me these days ;)

[nando]

or you could just open a ROTH and buy some low cost index based ETFs as heeter suggests. cheap, effective, and far less risky. the risk component is especially important for somebody who doesn't have experience.