Finance/Investing ITT

[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.

[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)

[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.

[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.

[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]

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.

[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.

[Kershaw]

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

[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.

[Farbin Kaiber]

Not so much that, but as gold continues to get farther out of reach, silver, as a precious metal, will continue to rise, tied to golds price. I was saying get into silver before it goes to 100+/oz. Because it will, and it will stay there. So moreso, I'm saying, look into silver, see it's trends, and when there is a drop, buy in, because it will go back up, and continue to do so in the future.

I had a chance to invest into gold when I was in HS, and didn't. Now I look back, I wish I did, I would have had a 5x increase on investment in about 13 years. Instead, I blew that money.

[nando]

Mark my words, get into silver, now.

buy high, sell low?

https://news.fidelity.com/news/news.jhtml?cat=Opinion&articleid=201104250001SMRTMONYNEWS_____30694&IMG=N

[gte175x]

Mark my words, get into silver, now.

reason?

[gte175x]

yes, and do the Roth since you don't pay much taxes right now so bringing down your tax bracket isn't very important. but I wouldn't put all of it into an IRA. I would keep 1-2k in savings for emergencies. Otherwise if something happens and you have no cash, you're stuck using a credit card and you don't want to get on that merry go round.

I agree...do the roth...if you need to you can remove the principal, you can do so without penalty. Just in case you ever need it....you can't use it like a checking account tho...

the profits are not taxed, and you will not be able to do a roth once you make more than 90K a year so getting them in early now can be important....and there is a 5k a year max input.

you just need to figure out, what you will invest in for the roth contributions.

[Kershaw]

havent opened a forex account with zecco. dont know why you cant just expand your normal trading account into forex. either way, spot metals or currency trading is really dangerous and im not sure i want to get into that right now.

anything else you'd suggest?

[Farbin Kaiber]

Mark my words, get into silver, now.