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?
Yet_again wrote: “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.”
No, this portfolio will not be destroyed by a US dollar collapse, 40% of S&P earnings are from outside the US. If the dollar falls drastically, the value of those offshore earnings goes up!
Your suggested portfolio of swiss francs and gold, has no interest income, earnings, or dividend yield. It’s good for a US hyperinflation, but what about deflation, or stagflation, or a normal economic recovery?
Undiversified portfolios can yield higher investment returns, at the cost of much higher risk.
My suggestion for someone who is worried about the potential collapse of the US dollar. Why not use options such as those on, say, UUP, and leave the rest of the portfolio with a sensible diversified allocation?
Is there a US investment fund for rare Earth metals?
Well, there’s a well known Canadian fund, North American Palladium.
And there’s NYMEX
http://en.wikipedia.org/wiki/New_York_Mercantile_Exchange
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