Finance/Investing ITT

[nando]

but silver has vastly outperformed gold. Compare the two over the last 20 years. Silver spikes massively, even compared to gold's recent spike.

saying it's going up forever is exactly the same mentality that led to the housing bubble. The only difference is, houses are actually useful. You can't eat silver, or live in it, or use it to keep yourself warm. It's shiny, but gold is better at everything silver is good at (conductivity, resistance to tarnishing). There are at least manufacturing applications for gold, other than trinkets.

it's a bubble. also, over the long term, their price appreciation isn't as impressive. 5x increase in money over 15-20 years isn't that great. Although surely it would have been better than spending it.

It's your money, so do what you feel is best for you. I'll stick to equities where I can calculate my risk, instead of jumping into a market that looks like a huge spike on an asset that has limited applications.

[Kershaw]

so what do you recommend getting into right now, nando?

[rwh11385]

but silver has vastly outperformed gold. Compare the two over the last 20 years. Silver spikes massively, even compared to gold's recent spike.

saying it's going up forever is exactly the same mentality that led to the housing bubble. The only difference is, houses are actually useful. You can't eat silver, or live in it, or use it to keep yourself warm. It's shiny, but gold is better at everything silver is good at (conductivity, resistance to tarnishing). There are at least manufacturing applications for gold, other than trinkets.

it's a bubble. also, over the long term, their price appreciation isn't as impressive. 5x increase in money over 15-20 years isn't that great. Although surely it would have been better than spending it.

It's your money, so do what you feel is best for you. I'll stick to equities where I can calculate my risk, instead of jumping into a market that looks like a huge spike on an asset that has limited applications.

genius post bro. would read again.

Throw money in market-wide ETFs, call it a day. (Scottrade has commission-free ETFs, but my favorite from Vanguard are VNQ, VEU, and VTI). Spend time working, learning, or spending time with friends and loved one, not trying to beat the market... you'll end up losing sometime or at least not doing any better than market average.

[nando]

so what do you recommend getting into right now, nando?

I'm not really qualified to say buy this or buy that. right now I'm saving cash for another dip (but paying off debts first), and I like to buy companies that A) earn money B) have solid balance sheets C) pay dividends. I mean, basically you can't go wrong buying solid companies, just don't pay too much. :)

metals don't pay dividends either, because they don't earn money.. they actually cost money to own (the physical asset) because you have to pay for storage, security, transport, etc. the ETFs don't have this drawback, but you're basically relying on the hope that the price will keep going up, but it's only going up because other people are buying it, not because it's earning power is growing or other fundamentals. Look up what happened to the Tulip market a couple hundred years ago in europe for an excellent example.

if I wanted to play metals, I'd probably buy the mining companies (that do create earnings/value), but unfortunately I think that ship has already sailed.

[Kershaw]

sure.

i've had an e30 or 2 worth of cash just sitting in my zecco account. my last venture didnt pan out very well, so i just kind of forgot about it for a year. lately i've been meaning to do something useful with it. i could have at least put it into google and made some money over the last year. but nope... just forgot about it.

[nando]

But that's exactly what you don't want to do. hindsight is 20/20 - but what if that single investment (google) didn't pay out? what if it went the other way? and also sitting on cash isn't doing you any good either, especially in a low interest/inflationary environment.

I've been guilty of both mistakes. I wanted to buy Ford when it was like $1. It was a very small risk (probably 100-200 shares), but I went with my fears like everyone else (march 2009) and missed out on a 1500% return. I've also jumped on a bandwagon and lost 50%. the trick is to not repeat those kinds of mistakes. :)

I started out with like $2500 in a rollover, it's like $8k now. I think I've put another $1500 into it, the rest being asset appreciation and dividends. I "coulda" put it all into one stock and made a lot of dough (some up to 300% return), but the odds of getting that lucky on one single bet are against me. Instead I spread it out over about 8-15 different (quality) stocks that were solid companies. A few didn't play out, so I sold them. the rest are well into the double digits and a few 100% or more. Most of that is just luck, backed with fundamentals and basic research (ever read a balance sheet? ZZZZZZZZZZzzzzzzzzzzzzz).

I like some of the basic advice you can find anywhere:
-diversify (IE don't sink all of your cash into one stock/bond/commodity/whatever)
-don't invest in what you don't understand
-fundamentals are key
-tax deferred or sheltered accounts are a good thing (Roth/401k)
-keep at least some cash on hand for a "rainy day" (IE everyone else is panicking and selling securities for a song)

investing is taking a calculated risk for a realistic return. gambling is throwing everything you have into one hat and hoping to god you get a huge payout.

[j0oftheworld]

#1 post college mistake = new/pricey car !!

-Put into your 401k whatever your company is willing to match to start.
-If you start making good money and live in a city that you can see yourself in for a while buy a small condo or house that you can pay off in <5yrs. Paying a bank $1000/mo in interest for 30yrs is NOT the American dream!

Notorious B.I.G. said it best: "Condo paid for; no car payment" :)

I'm 30 now and my 401k is ~$80k. I could have been SO much further ahead in life if I would've never stopped living like I did when I was in High School.. If I wanted something, I saved up for it and then bought it! I ditched all my revolving credit in '06 and now have a REALLY low cost of living to income ratio and have a deposit box full of cash.

Keeping up w. the Jones' and worrying about what people think will get you nowhere.

[Kruzen]

Right now Gold seems to be a great long investment (or short)

http://online.wsj.com/article/SB10001424052748704889404576277361924031364.html

Peter schiff is saying we may see $5,000 dollar levels in coming years (he accurately predicted the stock market and housing bubbles)

[Farbin Kaiber]

I guess I was more suggesting silver as a good, low cost investment to get into the market, something akin to playing blackjack on the $5 max bet tables, get your feet wet kinda thing. Inevitably, anyone who does so will get into the markets more and will diversify.

[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.

[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 ;)

[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.

[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.

[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.

[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.