What do you know about investing?
 

With the falling dollar and a post war economy coming, I think we may be looking at an inflation spike in the next few years. What's the best way to deal with it?

a) Gold
b) commodities (especially oil)
c) foreign/emerging market mutual funds?
d) buy all the shit I've been holding off on for years (like a turbo) because my "debt dollars" will be worth less in the future?

You're asking a car forum about investing? Awesome. I've got some land to sell you. After the big one hits California it will be prime coastline property!

Way ahead of you. Already live in the Mojave. Just a matter of time!

There were some regular posters here bragging about their early retirements a while back. I'm hoping they know more than me.

IMHO:
No inflation on the horizon. Maybe you know something that I don't <G>.

a) horrible investment no matter what the economic climate is - if someone says to buy gold they are trying to make money off of you
b) a lot smarter people than you and I are working on this - a good way to lose your shirt
c) 50/50 - if you like to gamble then go for it. I like US investments.
d) keep holding off - a dollar spent now is just 10 dollars you don't have later if you invest

My plan is to keep on dollar cost averaging in the market. Buy the S&P and hold. Boring as hell but works every time. If the indicators start looking bad then sell to preserve the wealth that you built up and buy when the market dictates. Warren Buffet said something like "The stock market is a very efficient tool to take money from the impatient and give it to the patient". Put 10% of your paycheck in the S&P each week and you will retire early. Put 20% of your paycheck in the S&P each week and you will retire wealthy. (I said that <G>)

I love the beginning of the year when the newspaper (they do this in every city) has 10 local stock brokers invest an imaginary $100K in stocks of their choice and 80% of them end up losing money. Moral of the story? Maybe a car forum is the correct place to ask!

I made money off of precious medals investments over the past year. (Its like a mutual fund that deals in stuff more than gold.)
Over the past 4 months I have gotten an average 23% return.

You can argue that a devalued dollar is the definition of inflation. Also, some say that the recent cut in interest rates by the fed will have a negative long term effect on the US economy by further devaluing the dollar. Are stocks worth more or are dollars worth less? I don't completely disagree with you, Rmcelwee. The S&P will remain the majority of my investments. I'm just thinking about a little diversification.

China opened up private ownership of gold and in 3 years their gold exchange became bigger than the NYSE. Even the Chinese government is buying it, which is a little unusual.

Drewbroo, Where do you invest? I usually go through Vanguard but their precious metals fund has been locked for the last two years.

You live in Mojave? I live in Lancaster and so does another (new) member to this board.

Also, I bought real estate cheap and sold just before it started it's rapid decline. Made a nice profit, but that's not something to invest in right now since prices and interest rates are shitty.

a devalued dollar is not inflation. your salary doesn't change relative to any given item you buy necessarily.

but realistically, there's no easy money for a novice investor. there's only easy risk.

long term investments in the S&P are a great way to make some solid yields over the multi-year term. Just find an index that tracks the S&P or whatever favorite index you have and let it ride for 5 years. better yet, 10. or 20.

I dont think there's any problem with international trading. but be conservative if you dont have a lot of experience. day trading is more than a full time job. it'll make you money if you're really good but it'll cost you your livlihood. Just pick a known quantity index and let it ride.

For example, I keep my ira in the etrade S&P, Tech (nasdaq basically) and international indexes in various ratios. Depending on the time of year, it's up 15% or so. Today it's up 24.5%. But who cares, it's a long term investment for retirement. It'll average out to 12-15% by the time I'm 60.

Also the S&P pays dividends. reinvest that shit; free money!

Gold is only up about 50% in the last 25 years. Not what I would consider a very good return...

Investing in 500 different companies IS diversification. Go with the Wilshire 5000 if you want a little more diversification, but the returns are almost always the same. I like the S&P because the media tells you several times a day what it is doing.

I've been investing in foreign companies, some of them previously state owned. Like Petrochina, it was $80 when I started looking and buying and now they're at about $160-$180 or so. I also bought some from one of their major casinos, those Asians love to gamble.

Firedog, I live in Ridgecrest, about an hour from the town of Mojave. I was referring to the Mojave Desert in that post. I saw you're from Lancaster. My wife and I were just there a few weeks ago at Harbor Freight.

Y8s, I know it doesn't meet the definition of inflation in the literal since but I'm not sure if the old rules still apply. I'm saying the dollar's value may be an early warning.

Rmcelwee, gold has a bizarre history, especially in the last 100 years. You might be right about it being too risky for retirement. Still, it might make an interesting short term risk/return. I paid my own way through college, maybe my kids can too. :-)

Its not just gold, its a precious metals fund. (I'm sure there is something else in there to stabilize it.) Anyways, I invest with USAA.

I could care less what you think a good return is, all I know is that I made money, and more money is good.

I invest in copper, by stealing it from job sites and selling it to recyclers

I invest in MT.net stuff/

If you are still making house payments then I'd suggest you put all your money there first. Get the SOB paid off otherwise any money you appear to be making elsewhere will be offset by the long term interest you are paying on your mortgage. It's all about the bottom line, not how much you made this year.

thinking about it, the drop in the prime rate could trigger a little inflation as morons apply for more credit and buy new big screen TVs they can't afford. but at the moment I think the bump in prices will be pretty small.

PS Macallan 18 yr is heaven.

disagree. Take the writeoff and pay the interest, it's low anyway.

Yeah, the first year I had a decent job and did not have a house not I got creamed by the tax guy. If your gonna get the money taken from you, might as well buy a house.

[QUOTE=Philip;160162]disagree. Take the writeoff and pay the interest, it's low anyway.[/QUOT
Take two loans both at the same interest rate @ 30 years. One person pays it off in half the time and one goes to term paying that "low interest rate" and who pays more? The interest is HUGE at the end of the term. After it's paid off you can easily find other tax shelters that will make money for you.

I invest with Sharebuilder.com and T. Rowe Price, neither of them require a $5000 minimum like others do and Sharebuilder allows the purchase of partial shares. That was a feature I liked the most because when I get a raise I usually just sink the difference into a new account.

[QUOTE=socal pat;160177]Paying off a mortgage early is only good advice for poor investors. The person that goes to term isn't going to NOT invest the money he saves by not paying it off early. He's going to invest it elsewhere. And while the guy who pays early is locked at his mortgage rate of 6.5% interest for 20 years for paying it off, the other guy is making better returns elsewhere, is writing off part of the interest, and doesn't have all of his equity tied up where he can't access it (in a house vs liquid assets). Then he'll have to take a home equity loan at much higher than his interest just to access the equity in his house.

I posted this in a previous thread, and given that mortgage rates are still ridiculously low, it's still a good read.

http://www.ricedelman.com/cs/educati...?articleId=232

Frank

:rofl: I love "internet experts"

[QUOTE=fmowry;160204]Yes, that may be but the interest on your equity line is TAX DEDUCTIBLE! WOOOWEEEWOOOO! I wouldn't pay off my mortgage early unless I was about to retire.

Dear god I hope I don't have to deal with this stuff when I'm older...

There's always the lottery or an early death.

It's really not that bad. Sign up for a 401k or a Roth and stick everything into the S&P then don't worry about it again until your 60.

talk about the worst investment ever...

Sticking everything into one fund is a horrendously bad idea. At my work our retirement is fund based, five different funds. Among them are International (European/Asian), S & P, Government (who I work for), and a couple of others I just don't bother with because of hte shitty rate of return. I bought into the International just after the Iraq war was "over" (read: we got Saddam) at $7 or so a share. I think it's sitting at $22 a share now and I more than tripled my money by playing that. The government fund is basically paying my own paycheck and them paying me the interest back, shitty rate of return, but very stable. As we get closer to retirement most people start migrating money over to the Government fund.

Firedog, I disagree. I'm trying not to scare the guy and you have to start somewhere. The S&P has averaged 10% for the last 70 years. You have to admit, if Bryceness did exactly what I said, short of another Great Depression, he'd retire comfortably at 65. A "horrendously bad idea" is doing nothing.

Fmowry, everything in that article makes sense but I can't quite do it. I move every 5-7 years and that means I have to start over paying 99% interest and 1% principal. Add in real estate agent commissions and I'd never pay off my house. I know that doesn't really change the facts in your article but I just don't have the balls for it. We had a guy here quit after 8 months because he was upside down on his house in Las Vegas and couldn't sell it.

Yah this is sounding like a debate on the power forum over at Mnet. We all have different needs. Some of us have pension plans and some will have to provide their own. Some can barely make a mortgage payment while others are looking for ways to hide all their extra income.
I hope Bryceness will listen to arga and start doing something, anything right now. $100 a month ..... anything. I guess I am one of the "poor folks" who are relegated to just paying off the house. I am, after all, just a school custodian. My home and 3 cars are paid for and when I retire in 7 years I should have $300-$400 k in the bank(various funds). This in and of itself won't take me on world cruises, but since both my wife and I also will have pensions and no debt it should make a decent buffer.
Some may feel uncomfortable unless they have millions set aside and that's great...... for them. One thing we can all agree on is that refinancing and pulling equity out of your home to buy shit that will end up in a landfill like cars and TVs is just what "they" want you to do. And signing up gleefuly for credit card with a 19% rate???? SHIT!!! never again.

the S&P isn't a fund. it's an index. a committee picks some large caps as a representative sample of the market and the share proportions are weighted to accurately represent the size of each.

there's an easy way to invest in long term investments. read the ratings. pick the one that's the best return rating and lowest risk.

but look around, there's very few funds that outperform the S&P 500 over the long term.

There has never been a fund that outperforms the S&P over the long term. Do I have any real documentation of this? No. But, if any fund ever returned more than the S&P over the long term (say 15 years) you would see an ad for it boasting about this every 5 minutes on TV and there would be lines of people trying to get into it. For this reason, ETF's are the perfect investment if you are looking at a long enough window. If your window is short then you are gambling, not investing.

What do I invest my ROTH money in? A mutual fund that does 2X the S&P.

What have a got burned in? Investing in individual stocks and trying to short the market. It took me 20 years to learn to just stick the money in the S&P and let it grow.

what is a s&p?

Standard and Poor's index of the top 500 companies. By investing in a S&P fund you are buying stock in these companies. It's more complicated than that. Y8S goes into it a little in his post. The index is weighted per segment and in reality your mutual fund manager will buy a subset of those stocks to try to match their performance but saying it's the top 500 companies is close enough.

Don't forget, investment strategy changes dependant upon age!

Simple advice - eliminate debt ASAP and diversify between long-term and short term growth.

If you are looking for something more detailed, do continual research. - It's your money, know what it is doing for you.

- L

PS - And if you are bordering on panic due to an impending collapse of the US economy, check out www.cabelas.com and order hand-loading supplies...

......Hahaha...Just waiting for the Zombie uprising and my retierment plan comes outta my trunk locked an loaded:bigtu:.....but If the economy crash's I guess i can settle with living targets.:sad2: