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Old 27-03-2011, 16:56   #16
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Re: How to invest?

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Rentals / Apt complexes are the current way.
Actually true. The problem is since the early 1960's they tank on a 12 year cycle and you get burned bad. Rentals run on a frenzy any time the housing market gets low. The would be landlords flock to the flame and over build. They do well for a while sucking more landlords in and then poison the well with too many units. Easy credit screws the market. Unless you have the local market pegged you'll get burned if you double down. If you go in light and hang tight you can pick up the downside and do well. Lots of discipline is called for. Sad part is it's a job.
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Old 27-03-2011, 18:10   #17
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Re: How to invest?

Look at dividend stocks, since money markets and savings accounts are paying such low interest, a stable stock with a good dividend is an attractive investment:

Dividend Growth Investor: My Entry Criteria for Dividend Stocks
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Old 27-03-2011, 18:16   #18
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Re: How to invest?

Without more facts it's impossible to my recommendations. A good financial plan would involving knowing age, total net worth, family, insurance requirements, employment history and plans, etc.

All that said, a good reading of financial history over the last 100 years will say that the stock market is still the best place to invest for the long haul. A well balanced (a relative term based on all the facts mentioned above) portfolio with domestic and global investments.

If you are looking for a "silver bullet", there isn't one.
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Old 27-03-2011, 19:02   #19
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Re: How to invest?

For a number of years, I have consistently made good returns by investing in commodity spreads. I use a service from a company called Moore Research, who basically looks at the 15 year historic relationships between futures contracts of different expiration date within the same commodity e.g. May wheat long, September wheat short, or between different commodities, e.g. long platinum, short gold, and then calculates the optimum time to enter and exit the trade. It is just straight data analysis based on real world realities. For example, in the fall heating oil increases in demand, and price and gasoline for driving goes down as demand falls. That spread would be long heating oil and short gasoline. Both can up in price or both down, but what you are betting on is that the price differential between the two will narrow, resulting in profit.

The key to their approach, and the high returns possible, is that they invest across the whole spectrum of commodity groups - interest rates, currencies, grains, meats, metals, energies, etc. At any one time, you have multiple positions on, and Moore advises an entry date and an exit date. Sometimes you win, sometimes you lose, but it is a way to invest in a diversified portfolio that has for many years delivered embarrassingly high returns. Moore's only revenue model is selling their research, not shilling trades. www.mrci.com.

Another key to this strategy is to use an electronic trading platform that has very low transaction costs and allows you to specify the time and date you want to enter and exit a spread in advance, on auto pilot. This helps when you're off beyond internet access.

You will hear from many that commodity investing is highly risky and volatile. It is volatile, but when done with diversified spreads is far less risky, IMHO, than investing in say the stock market. For an idea of the theoretical returns if every trade Moore recommended was entered into and exited on the day and time specified, they publish those theoretical returns here: MRCI 2010 Results. If you look at these, ignore the 'seasonal trades' at the top. These are straight trades, e.g. long the S&P Index without any offsetting short leg, and while over multiple years are very profitable, in any given year you can suffer some real heartbreak. The 'seasonal spreads' are what I invest in, and they returned around 58% last year on paper, and in actuality around 40% for me since I stay out of currencies as being just too hair raising for my tastes.

The total capital to trade every recommended trade is around $60,000 on account to handle the margin requirements. The electronic platform I use is beyond belief in how comprehensive it is and comes for Interactive Brokers.
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Old 27-03-2011, 19:10   #20
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Re: How to invest?

There are some good bonds out there you can check out like TIPS:

Individual - Treasury Inflation-Protected Securities (TIPS)

Vanguard (and I'm sure other brokerages) have some nice funds based in IPS. They can make an attractive bond option if you're concerned about core inflation.

https://personal.vanguard.com/us/Fun...FundIntExt=INT
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Old 27-03-2011, 19:18   #21
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Re: How to invest?

I thought it might be helpful to post a couple of documents from Moore Research to illustrate the concept. The first is the report on all currently open trades and their profit/loss, and the second is an example of the background historic data on a single trade, in this case long platinum and short gold. Hope that helps...
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Old 27-03-2011, 19:26   #22
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Re: How to invest?

Commodities.
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Old 27-03-2011, 19:34   #23
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Re: How to invest?

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Originally Posted by Mardav View Post
Commodities.
I agree... did you see this?


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Originally Posted by s/v 'Faith' View Post
Forget gold, well... maybe not... but don't invest in it....


remember 'the Graduate?'

"PLASTICS!"




Not so much.....



Bronze.


Specifically, Silicon Bronze.



Go price real silicon bronze screws...

Gold is not really good for much unless you need a filling... bronze screws on the other hand.....
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Old 27-03-2011, 19:42   #24
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Re: How to invest?

Simple way to get what has been a average 18% return for the last 10 years has been GOLD. Gold went up 29% in 2010 alone. 100,000$ in gold will fit in your pants pockets (easily transportable). Everywhere in the world Gold is currency, which means if the dollar keeps losing value it doesn't affect you at all. Physical gold is not the same thing as a gold stock or gold ETF like GLD. Paper gold is not money, it is an I.O.U from someone else.
Start reading sites like jsmineset or zerohedge to get a quick education on Gold and investing.
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Old 27-03-2011, 19:56   #25
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Re: How to invest?

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Originally Posted by Pblais View Post
Actually true. The problem is since the early 1960's they tank on a 12 year cycle and you get burned bad. Rentals run on a frenzy any time the housing market gets low. The would be landlords flock to the flame and over build. They do well for a while sucking more landlords in and then poison the well with too many units. Easy credit screws the market. Unless you have the local market pegged you'll get burned if you double down. If you go in light and hang tight you can pick up the downside and do well. Lots of discipline is called for. Sad part is it's a job.
I have been investing in real estate all my life so, I have to speak up on this on. The market does adjust every 12 years or so, but only to sales price, not to rental prices. I would never advise a casual investor to build new rental properties, especially now when prices are down 30-60%. You are right it is definately a JOB. There are some good management companies around, but please investigate them thoroughly (I manage my own). Saucy said she has cash which greatly improves the numbers since banks typically charge more interest on commercial loans as opposed to primary residence. Having cash will also help you negotiate for a lower price since the closing will be much sooner. Many investors, who bought in the last 10 years or so got extremely favorable loans, but many were first time landlords and spent the "cash-out" or the profits and didn't save for repairs and such and are now ready to get out. Also, with so many people having gone through foreclosures, they can't buy a houde now even though many still have very good incomes. So there are alot of really good renters out there. Not to mention recent grads are much more inclined to rent rather than buy due to the recent turmoil. This past decline was due more to absolutely crazy loans being made to people who couldn't afford them, not just a cyclical adjustment.
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Old 27-03-2011, 20:00   #26
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Re: How to invest?

Commodities, gold bars, apartments, TIPS, ... boy, this thread has got legs.

How about a bag of precious stones? You know Saucy.. diamonds are a girls best friend.
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Old 27-03-2011, 21:27   #27
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Re: How to invest?

As a recently retired finance professor, I could not pass up this thread. I can think of few other fields where misinformation is so prevalent and genuine research is so often ignored.

If you have a lot of money to invest (say over $250,000), then the help of a certified financial planner may be warranted to help you prepare a budget and establish reasonable financial objectives. Be very careful, however, as many financial planners are little more than salesmen who push the products that pay them the highest commission. If you don't go to a FP, a few basic guidelines may be helpful.

First, you have to determine your risk tolerance, investment horizon, etc. If you will need the money in fewer than five or six years (and are interested in investing rather than gambling), forget about stocks, real estate, and even long-term bonds. Concentrate on safety, forget about a high rate of return, and put the money in short-tern low-risk notes, CDs, treasury securities or other similar money market instruments.

If you won't need the money for ten years or more and are willing to take risk, equities are a good bet. Unless you are Warren Buffet, don't try to beat the market, as this invariably leads to a lower return. Buy a total market index fund with a low annual management fee, then forget about it. In the U.S., Fidelity Investments and Vanguard have several to choose from. Don't study the market, as this may lead you to the mistaken (and usually costly) impression that you know something. Don't listen to anyone who suggests they can earn more than the market average. They just want your money. Don't buy any mutual fund that has a load or a commission that is paid to a salesman. It is not necessary.

Most sophisticated investors put some of their money in short-term low risk investments and part in equities. Many also put some in long-term bonds, althought this is not a particularly appealing strategy at present, as any inflation-induced increase in interest rates will send bond prices down. Investing in long-term high grade bonds is safe only if you leave the money invested until the bond mattures.

Forget gold and silver. These assets don't produce anything (like a company does) and they have high storage and transaction costs. Forget about futures and options unless you just like to gamble or you have some position that you want to hedge.

Some people like real estate, but the people I know who have real estate investments feel chained to their properties and are always complaining about the people who rent. Also, real estate is illiquid and requires skill to manage.

There! That's my two cents worth!
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Old 27-03-2011, 21:38   #28
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Re: How to invest?

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Forget gold and silver. These assets don't produce anything (like a company does) and they have high storage and transaction costs. Forget about futures and options unless you just like to gamble or you have some position that you want to hedge.
Hmmm....The S&P has returned an average of 3.38% over the last 10 years, while gold has returned 400% and silver 600%. Although it is true, gold doesn't produce anything, except wealth, and silver not much at all except a broad range of industrial products for which it is vital.

Nothing to see here, just move on.......
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Old 27-03-2011, 21:41   #29
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Re: How to invest?

Personally I wouldn't invest if you are on a cruise unless you have access to your account "immediately". What if an investment needs to be closed ? Can happen to even the masters of investment - if your are in the midst of the pacific w/o internet, that could be a bad welcome surprise at the the next harbour.

Best way to make and preserve capital is to do day trading (if you are able to do that) ... may be just a day or two per week.
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Old 27-03-2011, 21:50   #30
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Re: How to invest?

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Personally I wouldn't invest if you are on a cruise unless you have access to your account "immediately". What if an investment needs to be closed ? Can happen to even the masters of investment - if your are in the midst of the pacific w/o internet, that could be a bad welcome surprise at the the next harbour.

Best way to make and preserve capital is to do day trading (if you are able to do that) ... may be just a day or two per week.
Zonker, that is why trading a broad range of commodity spreads to reduce the beta risk below the stock market on an electronic platform that allows you to establish the time and day of entry and exit of a trade is a great option for the cruiser, because it can be managed on autopilot with access needed about once a month. With spreads it doesn't matter whether the price of stuff goes up or down, only what happens in the price relationship between the two legs of the spread.
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