New To Stockmarket Investing

[Allen72289]

Okay.

I know the powers that be manipulate the value of precious metals.

I'll live within my means.

I'm converting my internal combustion engines to propane (it's about 1.70 compared to a gallon of gasoline and propane is 110 octane.. much more power) plus it keeps for a very long time. I'll be buying a large propane tank because I know oil will eventually sky rocket. My goal is one year supply of propane and food.

I'm building a steam engine that can run off any source of heat.. in this case wood. I'll run a generator head with it.

I'm also finishing a street legal 3 wheeler of mine which I will run on propane that's 1.70 u.s. dollars for 100 miles.

And lastly a one year supply of food.

I'm selling all my useless junk.

I will purchase essentials.

However, with my surplus income what will I do with worthless dollars?

Precious metals?

Tangible assets other than precious metals?

http://www.greensteamengine.com/

http://theepicenter.com/tow102899.html < Small engine propane conversion.

http://www.motherearthnews.com/Alternative-Energy/1972-05-01/Convert-Your-Car-To-Propane.aspx Car conversion.

http://i6.photobucket.com/albums/y224/amc_chopperboy/Bike1_WEB.jpg <My trike I am finishing.

 

[AceNZ]

I can get behind that. Yet, this is exactly opposite of what you've suggested.

I don't see how I suggested trading the market, but if you read that into my suggestions I can't debate that.

Dumb. Stocks are down and while they might go down further, this is the time to start buying (average in). You're pretending to know this isn't the bottom. Whether or not this is the bottom, he needs research good companies or index funds and start averaging in for the long haul.

Yes, I'm claiming that this isn't the bottom, particularly for the market as priced in gold (since the Fed could inflate hugely to keep dollar prices at arbitrary levels). In addition, I'm claiming that other investment classes will do better than stocks. There is plenty of data and research out there to support this view.

You're free to disagree -- after all, that's what makes a market -- but that doesn't make the advice stupid, does it?

In a diversified portfolio, yes, but this should be a very small part overall.

Commodities are actually less volatile than stocks over the long run. In that sense, they are more conservative and therefore more suitable for beginning investors.

Again, I respect your right to your opinion -- that is, after all, what most people believe. I just don't agree. Successful investors like Jim Rogers and Marc Faber also happen to agree with my opinion, so it's not like I'm spouting some crazy shit. I don't use him myself, but I also know that Peter Schiff's customers have been doing extremely well in the markets lately, using a more complex version of this strategy (that definitely isn't suitable for beginners).

 

[Allen72289]

Commodities are actually less volatile than stocks over the long run. In that sense, they are more conservative and therefore more suitable for beginning investors.

How do I invest in these exactly?

How can I transfer my dollars into Euros?

Won't the euro tank too? It's created by the same people. ._.;'

 

[webaform]

I agree with many things that jclay2 says.

Just to show you how dumb the "market experts" really are check out this example.

I was doing research on the monoline bond insurers and came across some silliness. Check out this analysis on RAMR, Ram Holdings Ltd. of Bermuda.

http://www.tradingmarkets.com/.site/news/Stock News/1008313/

The "expert" talks about "..On December 31, United Rentals Company terminated a joint venture agreement with Ram.."

The silliness is that Ram Holdings Ltd of Bermuda never had a joint venture agreement with United Rentals Company.

The unrelated Ram company that had a joint venture agreement with United Rentals Company is RAM Holdings Company, LLC, a Delaware limited liability company.

This so called expert probably read Yahoo or Google finance 15 minutes before the interview and spouted off his nonsense.

 

[specsaregood]

For all we know, gold and precious metals could do exactly what it did in 1981 and a lot of people could get hammered.

The only way that can happen is IF they change the current course.
ie: Drastically increase interest rates and actively work to save the dollar.

I don't see that happening in the near future, except maybe due to a sudden complete collapse.

 

[AceNZ]

How do I invest in these exactly?

The easiest way is through an index ETF. Indexes are also less volatile than individual commodities. I like the Roger's Agricultural index: symbol RJA. You can buy that through a regular stock brokerage account. There are several other flavors available too -- I suggest researching them carefully before making a decision. You might also want to invest in more than one to diversify the underlying management risk.

There are also commodity mutual funds, but I don't like them as well since they tend to have higher management fees.

How can I transfer my dollars into Euros?

Won't the euro tank too? It's created by the same people. ._.;'

There are lots of different ways. Everbank offers multiple currency accounts. Once an account is open, you can either buy and sell currencies through the bank or use a commercial money exchange company like MoneyCorp. You'll probably get a better exchange rate if you can open an account at a European bank -- some of the larger banks now have branches in the US. HSBC Bank is supposed to be good at handling forex too.

The Euro will probably be stronger than the US dollar for a while. But yes, in the long run it will probably tank too. It's certainly being inflated heavily. I'm not even convinced that it will survive as a currency for more than another 5 to 10 yrs, due to disagreements among member countries -- not to mention the problems caused by the way countries are cooking their books.

I personally don't like the Euro, although I would consider holding a small amount. I prefer currencies from commodity-backed economies like Canada, Australia and New Zealand. NZ (where I live) also pays high interest rates even on basic savings accounts, which can be another plus.

 

[Allen72289]

I thought the Canadian was fiat.

o_o; Wow. I have relatives in Australia.. hmm I have a bunch of Australian coins..

Australia is very rich in gold still.. I've thought about moving there, I dunno..

 

[liberty_Forever]

Okay first of all, I am sick of people posting here who are "overnight economists". That is, you started learning about this 2 weeks ago, and now post as some sort of expert. This is irritating at best, especially considering people's financial future is on the line. Stop offering crappy advice if you do not know what the hell you are talking about.

jclay2: You just admitted you were 17, yet you keep posting mixed bags of advice as if you have been investing for years. Let me first say I do not think you have a proper understanding of the macroeconomic fundamentals. And I think anyone listening to your advice is living in CNBC Bubble-land and will probably lose their shirt. Peter Schiff was named economic advisor to Ron Paul and his whole book is about why you should NOT be investing in U.S. stocks.

AceNZ: I think your advice was excellent, and I agree with most of your economic posts.

Eponym_mi: "[gold] should be a very small part overall" ... huh? We are in a gold secular bull market. Your advice sounds like it's from the 1980s. There is macro deflation in place while the central banks are trying to fight collapsing debt with monetization. Gold performs very well under economic extremes (deflation and hyperinflation). How someone can *not* recommend gold right now is irresponsible at best.

Dow Priced in Gold

US Dollar Index

The bottom line is you want to be conservative in this environment. Conservative in the year 2008 means Gold, Cash, and Food.

Gold: There are plenty of places to purchase gold, I won't repeat them here.
Cash: You do not want to be in money market funds. I'd say some physical US cash, some in FDIC insured accounts, and a good fraction in foreign cash. I suggest the Merk Hard Currency Fund or else the currency ETFs.
Canadian Dollar: FXC
Euro: FXE
Swissy: FXF

Food: I'd definitely be purchasing food. There is a global drought and the beginnings of a worldwide food shortage. This information is becoming common knowledge. See World Food Stocks Dwindling Rapidly from the IHT in Paris.

Bottom line: If you do not have information to back up your claims, do not post here. This forum should not be a repeater for the nonsense permeating CNBC.

 

[IChooseLiberty]

I would suggest saving your money diversified between at least Euros, Silver, and Gold. So long as the Fed keeps rates low and/or continues lowering them, these will appreciate. When the Fed decides to start raising long term rates dramatically, like they did in the 80s, will be the time to get out of these and invest in cash.

Do not buy stocks at this time unless you are buying for the short-term and have researched knowledge on your investments. Risk is much higher than return IMO for non-researched stock market investments. Invest in the market whe it hits bottom but do not be fooled by fool's rallys like the past few days.

 

[Allen72289]

Yep, better stock up on food while you can, 68% of the world's wheat supply was destroyed.

Learn how to eat food from "the wild"

 

[liberty_Forever]

ETFs are useful. Just remember that you are exposed to counterparty risk (default risk). If you factor this into your investment decisions, you will be okay.. Personally, I like the currency ETFs. Thanks for the info Bill.

Yeah the Euro is actually a decent parking spot short-term. The ECB is being very stubborn and refusing to cut rates. They still have memories of Wiemar ...

Inflation 1923-24: A German woman feeding a stove with currency notes, which burn longer than the amount of firewood they can buy.

Can't really blame the ECB...

 

[IChooseLiberty]

Also, keep in mind... the fed will have a very hard time raising rates for _at the very least_ the next 11 months due to subprime mortgage rate resets. Inflation will be dominant.

 

[liberty_Forever]

IChooseLiberty: From what I understand, most ARMs (adjustable rate mortgages) are tied to TCM (treasury constant maturity) or to LIBOR (london interbank rate).

So I think you are right... not only will the Fed cut the short-term rate, they will need to monetize the long end of the treasury market, as well as keep the banks liquified so that LIBOR doesn't skyrocket again. This whole situation is a recipe for a disaster!

 

[Eponym_mi]

Eponym_mi: "[gold] should be a very small part overall" ... huh? We are in a gold secular bull market. Your advice sounds like it's from the 1980s. There is macro deflation in place while the central banks are trying to fight collapsing debt with monetization. Gold performs very well under economic extremes (deflation and hyperinflation). How someone can *not* recommend gold right now is irresponsible at best.

I wouldn't and don't hold any more than 10% gold in my portfolio. I'm 45. Funny you mention the 80's because it was speculators like you that created a bubble then. Buy as much as you like.

In any case, I believe much of the advice being offered here is very imprudent for an 18 year old. I suggested that he research investments thoroughly and get some trusted counsel. Hopefully, he'll get counsel from someplace other than anonymous posters on a internet forum.

 

[IChooseLiberty]

IChooseLiberty: From what I understand, most ARMs (adjustable rate mortgages) are tied to TCM (treasury constant maturity) or to LIBOR (london interbank rate).

So I think you are right... not only will the Fed cut the short-term rate, they will need to monetize the long end of the treasury market, as well as keep the banks liquified so that LIBOR doesn't skyrocket again. This whole situation is a recipe for a disaster!

It really does spell disaster from what I see Unforunately, the gov't is stuck between the proverbial rock and a hard place since they will not reduce spending this close to the election. After the election, expect spending to be reduced dramatically and the interest rates to be raised.

 

[forsmant]

What about dividends? Are they at all important in your decision to buy or not buy a stock? There are no dividends for gold. There are dividends for oil companies, natural gas companies, other energy companies that people will still need to consume regardless of the business cycle.

 

[specsaregood]

I suggest the Merk Hard Currency Fund

Excellent analysis, and even though I am no expert, I was quite pleased to see that many of the investments I have made and FORCED family members to make right there in your post.

I like the MerkX fund and got my family into months ago. How did I find it? They mentioned Ron Paul! And after I got into it, I told them how I found about them, and then a bit later, discovered they were advertising on adwords for Ron Paul keywords. smart guys they are.

Just fyi: This was how I found out about that fund:
http://www.merkfund.com/merk-perspective/insights/2007-04-27.html
"Ron Paul Not a Myth"
Excerpt:
"We missed that there is indeed a presidential candidate who believes in the old fashioned view to “live within your means.” Our apologies go to Congressman Ron Paul, who threw his hat in the ring on March 12, 2007, announcing his candidacy for the Republican presidential nomination. Ron Paul is the one member of Congress who is a true fiscal conservative. As a member of the House Committee of Financial Services, he does not hesitate to speak out against inflationary policies. On his campaign website, Ron Paul 2008, "

 

[AceNZ]

I thought the Canadian was fiat.

It is. All money in the world today is fiat. The countries I mentioned have commodity-driven economies, not commodity-backed currencies.

What about dividends? Are they at all important in your decision to buy or not buy a stock? There are no dividends for gold. There are dividends for oil companies, natural gas companies, other energy companies that people will still need to consume regardless of the business cycle.

Dividends have some appeal, but I wouldn't recommend investing on the basis of dividends alone. Total return is more important, IMO. If you need cash to live on, you can always sell a little of your investments at a time.

If dividends are important to you, there are some very nice high-dividend-paying "defensive" stocks available internationally. Here in NZ, for example, Telecom (the national phone company) is paying around 12%.

Oil prices have in the past tended to decline during recessions. This time around, my guess is that there might be a temporary decline as the markets acknowledge that we're in a recession (something I've been saying for months). However, I think demand in China (and the rest of Asia) is likely to go up, especially as their currency gets stronger, and in spite of the US recession, which could result in a good bounce. I would view a dip in oil as a buying opportunity. However, I think the commodity itself is less risky than the oil companies. An energy-heavy commodity Index ETF might be a good way to go.

 

[liberty_Forever]

I like dividends, and in general, I feel compensation for owning a high-risk asset class (stocks) should be a dividend. This is basically Peter Schiff's argument. However, I do own a couple of stocks that don't pay dividends. This is fine as long as you recognize them for what they are, and if you do your homework you can minimize risk.

I own energy stocks which pay dividends, and I set them to reinvest. I would say approx 10% of my allocation is in foreign energy equities. But I have a much higher allocation to precious metals.

I think a 10% allocation to gold is much too low. It really depends on the other 90% though... is it in cash or short term government bonds? Stocks in consumer staples or energy? Areas such as cash, short term bonds, and consumer staples might be acceptable... but if all your money is in the small-cap American-growth fund 401k plan, I'd take a serious look at my finances and reevaluate risk. Not six months ago Wall St sharks were hawking toxic structured credit to every dumb institutional investor on the planet. These included 401k's and local and state municipalities.

AceNZ: I agree about oil. I do not think oil will be going down very far. . . certainly not back below $60-$70/barrel. Even in a recession, the decrease in demand will not fall faster than the decrease in production. OPEC is lying about their production figures, and their stated reserves have been the same for over 30 years. The largest oil fields in the world are declining by 17% per year in production (see Cantarell, Ghawar, etc).

 

[Allen72289]

I'm certainly not leaving my wealth in dollars.

I'll transfer my savings into precious metals.

I will sell the metals if the fed begins to increase interest rates which is highly unlikely. This is the ending for the dollar, we all know it. The bankers want the Amero.

My question is the Amero is supposed to be backed by silver, how will this effect my precious metals?

If Ron Paul is elected what will happen to the value of my precious metals?


>_<; I dunno, isn't Iran suppose to "flood the market with cheap oil" which would kill the dollar? Hmm, if I invested in in oil with a foreign currency I would be okay??