Posted on 10/10/2010 5:17:24 PM PDT by grey_whiskers
I have been reading on FR and other places a number of articles on the current state of the economy, and pontifications about where the market is going from here.
Among the items I have read are that:
1) the economy is in a recovery
2) the economy is in a jobless recovery
3) the housing bubble is not done collapsing due to the banks not trying to claim foreclosures, so they can keep the loans and home values underlying the loan closer to constant. So the minute it looks like there is demand, EVERYONE will try to sell at once, precipitating a collapse.
4) The consumers are not spending, retrenching across all age and income groups.
5) The unemployment is worse among the unskilled: that the unemployment rate (including discouraged workers) is around 17%, and the unemployment rate among the under-25 crowd is 25%, except for African-Americans under 25, where the rate is closer to 40%.
6) That all of this unemployment is leading to retrenchments elsewhere in the economy.
7) That consumers are no longer spending.
8) That this lack of spending is affecting the earnings of companies.
9) That this bad news on earnings, coupled with an uncertain regulatory environment and the prospect of greatly increased costs for health care under Obamacare, has led to unprecedented insider sales of stock.
10) That despite this, the stock market goes up partly due to the pledge protection team, and partly to demand from the small investor who is looking for a greater return than that currently available via bonds, as well as effects of a weaker dollar.
Despite all these things, some of which argue for a stronger stock market and some for a weaker one, I want to hedge my bets. I don't want to purchase bonds in a record-low-interest-rate environment, not with interest hikes on the horizon.
So I am looking at buying silver. It is available in smaller amounts than gold, is more fungible, and (as far as I can tell) has more industrial demand as well.
Can anyone recommend a good introduction to buying silver for an investment, or a good (close-to-honest, anyway) dealer?
You are asking people here how to invest your money? I hope you are joking.
What is really going to be of value will be trade goods like food, ammo etc. But what will be especially valuable will be vice goods like booze & cigarettes.
I've been FReeping long enough to know how bad ideas (except on the computer and Palin-bashing threads) get winnowed out around here.
Cheers!
Gold, Apple, Asian mutual fund.
Lead
IBTJ (In Before The Jokers.)
If you’re looking to invest in metals, the rare earths are going to skyrocket soon.
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The Business Insider ^ | 9-29-2010 | Vincent Fernando, CFA
Stock up on lightbulbs to black market when demand goes up.
We bought silver locally to avoid the shipping cost.
That’s all I know.
I bought An Asian mutual fund and hour later I bought another one
Here’s an investment: Incandescent Light Bulbs. You’ll be able to make a mint on the black market for them very soon.
Consider Ishares TIPS
http://www.marketwatch.com/investing/fund/TIP
or buying TIP bonds directly
http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm
my answer is: No.
They are already up 700%
Spot price:
Kitco sells ounce rounds, I think.
http://bullion.nwtmint.com/silver_americaneagle.php
Never bought from these guys, just a reference.
You can also buy bags of junk silver - $20.00 face value is about a troy pound of silver (14 troy ounces).
My advice is worth what it cost you, BTW.
Putting all your money into one investment is the same as all your eggs into one basket: it is a mistake
caveat: i’m not an investment advisor, however...
here is a basic diversified portfolio made up of etfs:
SPY (S&P 500) fraction of portfolio = 40%
TLT (US treasuries current yield 3.75%) 20%
LQD (high grade corp bonds, yield 5.0%) 20%
HYG (high yield corp bonds, yield 9.0%) 10%
GLD (gold etf) 5%
SLV (silver etf) 5%
this portfolio should stand up to almost any economic outcome: hyperinflation, depression, deflation, stagflation, normal recovery, you name it.
hyperinflation - SPY, GLD, SLV will still be worth something
deflationary depression - TLT, LQD and GLD, SLV will be worth something
and, if we eventually get to a normal economic recovery: you will have big gains in SPY and HYG, and maybe SLV, with LQD standing pat (still yielding 5%) and some losses in TLT, and probably big losses on GLD.
the point is, with a diversified portfolio, the losses in some asset classes are made up for by gains in others. You don’t make as much money as a single asset investor who gets it right, but you don’t get totally wiped out either.
here is a basic diversified portfolio made up of etfs:
SPY (S&P 500) fraction of portfolio = 40%
TLT (US treasuries current yield 3.75%) 20%
LQD (high grade corp bonds, yield 5.0%) 20%
HYG (high yield corp bonds, yield 9.0%) 10%
GLD (gold etf) 5%
SLV (silver etf) 5%
While diversified, such a portfolio will be destroyed if what looms on the horizon comes to pass. Devaluation of the dollar will not magically make stocks rise. US treasuries will be decimated as rates rise. High Yield (ie low grade) corporate bonds will as well. That’s 70% of this portfolio that could be wiped off the face of the earth.
Here’s my defensive portfolio:
33% FXF
66% Gold
It’s done very well so far.
Just remember to factor in the value of the dollar. As the dollar is devalued the market will go up but the total value of the product does not. It just costs more dollars to buy the same product.
Many people today watch the stock market going up but it’s pretty much in proportion tothe dollar going down.
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