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 **** 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 ****; 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.