Investing in this stock market - a moral dilemna

[Rock Sexton]

...............maybe I'm making more of the situation than it is............but I've never once invested money in the stock market. I've been heavily involved in this site, it's topics, and the desire to make America a better place. I'm not proud to say this but I learned the cold hard facts how quickly the abuse of credit can spiral out of control. I'm 30 years old and don't even have any life savings.

I've worked extremely hard in the past 3 years to try and correct everything. I recently came into a little bit of money from a commission, about 14k. It seems like everybody around me has this same degenerative thought process in that if they had the money they would feel so relaxed, buy themselves a few things. I'm the opposite. I don't want to spend any of it. Primarily because who knows how long it will last or what my job situation is going to be. It's time to start preparing - even though many of us on here fear the value of our Fed bucks going forward.

Getting to the point - am I contributing to the problem if I get into the stock market? I know the risks and have done a tremendous amount of research. However, there are a few regional banks that are so strong, the downside risk isn't that high and I could stand to pad my 14k a little bit (well actually it isn't going to be that high after I take care of some outstanding debt that I need cleared.) .....I have hedge fund friends reminding me everyday about these stocks.

Thoughts? In some ways I'm sickened to think I want to put my money into this giant casino called the NYSE ..... it wouldn't be for the long term. It would be a short term move. Lasting perhaps 4 months max.

 

[Josh_LA]

...............maybe I'm making more of the situation than it is............but I've never once invested money in the stock market. I've been heavily involved in this site, it's topics, and the desire to make America a better place. I'm not proud to say this but I learned the cold hard facts how quickly the abuse of credit can spiral out of control. I'm 30 years old and don't even have any life savings.

Nothing wrong w/ that if you're living fine.

I've worked extremely hard in the past 3 years to try and correct everything. I recently came into a little bit of money from a commission, about 14k. It seems like everybody around me has this same degenerative thought process in that if they had the money they would feel so relaxed, buy themselves a few things.

Maybe it's true for some, who knows?

I'm the opposite. I don't want to spend any of it. Primarily because who knows how long it will last or what my job situation is going to be. It's time to start preparing - even though many of us on here fear the value of our Fed bucks going forward.

You're smarter than they are, but prepared to defend yourself against ridicule and being wrong later.

Getting to the point - am I contributing to the problem if I get into the stock market?

No, you're putting yourself at risk.

I know the risks and have done a tremendous amount of research. However, there are a few regional banks that are so strong, the downside risk isn't that high and I could stand to pad my 14k a little bit (well actually it isn't going to be that high after I take care of some outstanding debt that I need cleared.) .....I have hedge fund friends reminding me everyday about these stocks.

Invest only what you can afford to lose.

Thoughts? In some ways I'm sickened to think I want to put my money into this giant casino called the NYSE ..... it wouldn't be for the long term. It would be a short term move. Lasting perhaps 4 months max.

you should not worry about the economy if you can benefit from it

the only reason I tell people not to bank or put money in CD, is because they think they're benefiting when in fact they're not, and they're also perpetuating the problem, the fact they don't benefit is the primary, problem contribution is secondary and not important.

 

[ChooseLiberty]

I'd wait.

Doesn't look like there's been a full blown bottom to the market yet.

 

[Met Income]

I'd wait.

Doesn't look like there's been a full blown bottom to the market yet.

Who could foresee the bottom?

 

[Josh_LA]

Who could foresee the bottom?

not me

 

[georgiapeach]

I'd wait.

Doesn't look like there's been a full blown bottom to the market yet.

You can make or lose money regardless of where the market as a whole is headed.

 

[Rock Sexton]

You can make or lose money regardless of where the market as a whole is headed.

............and that is why I have entertained the idea of putting in a little money short short term. I'm not talking about quadrupling my investment. I'm looking to make a dollar or two off every couple of dollars I spend. A couple of regional banks look great to me for this move.

 

[Josh_LA]

............and that is why I have entertained the idea of putting in a little money short short term. I'm not talking about quadrupling my investment. I'm looking to make a dollar or two off each dollar I spend. A couple of regional banks look great to me for this move.

1-2 dollars for every 1 dollar you spend?

that's still 100%+ profit!

Not quadruple, but not easy...oh wait, here's an easy one.

I'll post another thread

 

[Rock Sexton]

1-2 dollars for every 1 dollar you spend?

that's still 100%+ profit!

Not quadruple, but not easy...oh wait, here's an easy one.

I'll post another thread

I wrote that wrong. One stock I believe is at 2.15 and the other at like 3.50 ............ Again, not looking to make unimaginable sums of money here. However, these are heavy institutionally owned stocks.

Which thread?

 

[Met Income]

...............maybe I'm making more of the situation than it is............but I've never once invested money in the stock market. I've been heavily involved in this site, it's topics, and the desire to make America a better place. I'm not proud to say this but I learned the cold hard facts how quickly the abuse of credit can spiral out of control. I'm 30 years old and don't even have any life savings.

I've worked extremely hard in the past 3 years to try and correct everything. I recently came into a little bit of money from a commission, about 14k. It seems like everybody around me has this same degenerative thought process in that if they had the money they would feel so relaxed, buy themselves a few things. I'm the opposite. I don't want to spend any of it. Primarily because who knows how long it will last or what my job situation is going to be. It's time to start preparing - even though many of us on here fear the value of our Fed bucks going forward.

Getting to the point - am I contributing to the problem if I get into the stock market? I know the risks and have done a tremendous amount of research. However, there are a few regional banks that are so strong, the downside risk isn't that high and I could stand to pad my 14k a little bit (well actually it isn't going to be that high after I take care of some outstanding debt that I need cleared.) .....I have hedge fund friends reminding me everyday about these stocks.

Thoughts? In some ways I'm sickened to think I want to put my money into this giant casino called the NYSE ..... it wouldn't be for the long term. It would be a short term move. Lasting perhaps 4 months max.

I'm not convinced you could outperform the market in the long run -- individual stocks have too much uncompensated risk. However, I see no moral issue with buying stocks, you're just engaging in a mutual exchange.

 

[JdotRdot]

your first investment should be an "in case shit happens" fund
6-12 months worth of expenses (providing you have no debts)
after you have that, then you can think about the stock market

 

[Josh_LA]

I wrote that wrong. One stock I believe is at 2.15 and the other at like 3.50 ............ Again, not looking to make unimaginable sums of money here. However, these are heavy institutionally owned stocks.

Which thread?

"you live in a major city? no excuses"

 

[Josh_LA]

your first investment should be an "in case shit happens" fund
6-12 months worth of expenses (providing you have no debts)
after you have that, then you can think about the stock market

I agree, get priorities straight

1. debt free
2. stock up on some food
3. guns & ammo if you believe in it
4. some metals
5. risky stocks

 

[rockandrollsouls]

Who could foresee the bottom?

Late June, 2011 if you follow chart and time analysis.

Anyway, Josh LA hit it head on, basically. Only invest what you can afford to lose. Furthermore, since most of us agree the bottom is a ways off, you could start a practice account (play money) with something like investopedia. Learn the ropes, practice researching, and you might feel more comfortable investing later on.

Basically, know what you're getting into.

 

[rockandrollsouls]

I agree, get priorities straight

1. debt free
2. stock up on some food
3. guns & ammo if you believe in it
4. some metals
5. risky stocks

Eh, I think you seem to believe this time will be the final collapse of our market. I don't agree on that point.

1. It's always great to get rid of big debt. If you're paying off a car or mortgage, get it out of the way. I agree.

2. I don't think this is another great depression. I'm not a believer in stocking up on food. I don't agree.

3. I think owning a gun and some ammo is smart. Not to mention, the gun scene is good fun. Protection and recreation!

4. Would not buy metals here.

5. Would not buy stocks here.

Basically, pay off any debt holding you down, conserve cash, and wait for a better opportunity when you feel comfortable with investing.

 

[Brian4Liberty]

Thoughts? In some ways I'm sickened to think I want to put my money into this giant casino called the NYSE ..... it wouldn't be for the long term. It would be a short term move. Lasting perhaps 4 months max.

Take your time. Dollar cost average. There's no way to call the exact bottom. Keep at least half of that in safe cash. Insured credit union, money market or short term cds. You may need it. Check out I-bonds.

Try CEF, GDX or gold/silver bullion coins for at least 10% of it...

The market, especially financials, is a bit of a gamble right now. Don't go there unless it is speculative money.

 

[Met Income]

Late June, 2011 if you follow chart and time analysis.

Anyway, Josh LA hit it head on, basically. Only invest what you can afford to lose. Furthermore, since most of us agree the bottom is a ways off, you could start a practice account (play money) with something like investopedia. Learn the ropes, practice researching, and you might feel more comfortable investing later on.

Basically, know what you're getting into.

Peer reviewed studies of your chart and time analysis?

 

[nayjevin]

My suggestion:

Invest in something you have a degree of control over, such as coins in your hand, or even a pile of t-shirts or something similar you feel sure you can sell in practically any market.

edit- used books may hold value in a downturn

 

[tmosley]

4. Would not buy metals here.

5. Would not buy stocks here.

By "here", do you mean "at this time" or are you referring to something else?

As to the OP's question, yes, purchase of stock in a performing company is a good moral choice for several reasons. The first and most important is that it will make you money, and the acquisition of money by voluntary (mutually beneficial) exchange is the source of all good in the world. Second, purchase of such a stock will push the price up, justly rewarding those who invested before you did in what was at the time a more risky investment. Thirdly, purchase of stock helps to fund innovation and progress in those companies, and related companies that may benefit from a rise in the stock price. An increase in the availability of capital will allow them to improve their product, fund research, or make production more efficient, all of which have an immeasurable positive impact on society.

Of course, that is all predicated on a wise choice in companies. Choose the wrong one, and you wind up supporting looters (ie big Agra), moochers (ie financials), and government hangers on (ie big Pharma). Supporting companies such as those will both put your money at risk (as a forum member found out about when he put money in WaMu and took a 100% loss), and supports unethical and destructive behavior. Choose carefully, and you avoid that problem.

 

[rockandrollsouls]

By "here", do you mean "at this time" or are you referring to something else?

As to the OP's question, yes, purchase of stock in a performing company is a good moral choice for several reasons. The first and most important is that it will make you money, and the acquisition of money by voluntary (mutually beneficial) exchange is the source of all good in the world. Second, purchase of such a stock will push the price up, justly rewarding those who invested before you did in what was at the time a more risky investment. Thirdly, purchase of stock helps to fund innovation and progress in those companies, and related companies that may benefit from a rise in the stock price. An increase in the availability of capital will allow them to improve their product, fund research, or make production more efficient, all of which have an immeasurable positive impact on society.

Of course, that is all predicated on a wise choice in companies. Choose the wrong one, and you wind up supporting looters (ie big Agra), moochers (ie financials), and government hangers on (ie big Pharma). Supporting companies such as those will both put your money at risk (as a forum member found out about when he put money in WaMu and took a 100% loss), and supports unethical and destructive behavior. Choose carefully, and you avoid that problem.

Well, I'm basically saying I'm not a believer in the notion that our economy will never recover and that this is the depression to end all depression. I will be buying stocks and metals (long), but I honestly don't see myself doing so any time soon. I'm very convinced the market will move lower (I'm estimating the current bear rally ending later this month).

Anyway, if you were to even roughly piece together a reasonable time line of events following the pattern it doesn't look like there would be a recovery until, if you're even very optimistic like Kudlow and the heads on CNBC, mid 2010. So I'm guesstimating that even in the best case scenario you can wait around a while and see where things go.

Now, assuming the market does go lower I really can't say where I think gold goes. There are a number of factors that could push it either way. You could see a liquidation of gold to raise cash if we repeat another phase like we had in 2008 which might push the price down, or government manipulation. I really just don't know about that until things start to happen.

So basically, both are a wait and see for me, if you're long. My own research and reasoning leads me to believe a market bottom is in place June, 2011, but that's just my opinion and guess. Plenty of time to save cash, find and recognize a bottom, and buy good value plays if you're comfortable investing and don't subscribe to the thought we will be in a depression for 20 years. Just don't rush in.

My time line is based on history, charts, some fundamentals and analysis, and just logic and reasoning trying to put it into perspective. I'm by no means trying to say that's how it is and that's definitely what's going to happen, but that's what I'm leaning towards.

A short answer to your question is, "By 'here' I mean 'at this time.' Take your time because I think the market will go lower and you will have better opportunities. And, if the market does go lower, you may need some of that cash you were going to invest."

One investment I am liking for a very long time horizon is oil. But, if you consider it, the stocks that are involved with the commodity could be pressured downward with the rest of the market even if it does start to recover a little bit, so it might be worth waiting on that too. Plus, I have to admit I didn't think oil would reach the levels we've seen. I've never been too good at tracking it. However, once it did move downward I recognized and admitted we were probably in a deflationary period. So take that opinion with a grain of salt.

That's just my 2 cents and I'm not begging or asking anyone to follow along with my theory. However, the least I could do is attempt to explain my position behind it and my reasoning.

I can state one thing certainly, though; manage your finances carefully, take your time, gain knowledge in the field, and try not to rush into anything. Only you know what's best for you and your circumstances, and in the end that will trump any investment opinions.