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Old 27-03-2011, 21:50   #31
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Re: How to invest?

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Originally Posted by Mike Sibley View Post

Forget gold and silver. These assets don't produce anything (like a company does) and they have high storage and transaction costs.

There! That's my two cents worth!

Gold can be bought for $20.00 over melt value.... see tulving

$500,000 in gold coins can be stored in a shoebox.

Wherever you sail to, you can convert gold into the local currency.

And last but certainly not least....

Gold has averaged 18% for 10 years now.

Gold is the universal currency.....it always has been.
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Old 27-03-2011, 22:49   #32
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Re: How to invest?

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Originally Posted by 70AMX View Post
Gold can be bought for $20.00 over melt value.... see tulving

$500,000 in gold coins can be stored in a shoebox.

Wherever you sail to, you can convert gold into the local currency.

And last but certainly not least....

Gold has averaged 18% for 10 years now.

Gold is the universal currency.....it always has been.
Really? I would love to watch you anchor off Krabi, Thailand and dinghy into town to buy some groceries with those gold coins.

Have you ever done such a thing in a remote area or did you just read about this on the internet somewhere?
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Old 27-03-2011, 22:51   #33
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Re: How to invest?

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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.......
If you bought gold in Dec of 1978, it took until Dec of 2006 to get back to the same price.

If you throw in the effect of inflation, it is even worse.

S&P 1978 = 96.11
S&P 2006 = 1418.30

Hmmmm... wonder which was the better investment?
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Old 27-03-2011, 23:02   #34
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Re: How to invest?

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How about a bag of precious stones? You know Saucy.. diamonds are a girls best friend.

Not so much for investment reasons, I did get some loose stones. During a trip (ok maybe a few) to Colombia, I went to a well known shop for emeralds people I worked with went to. This shop has a good reputation for quality. Over a few trips, I got a few stones. The largest I got is a 2.95 carat emerald in the shape of a heart. I payed around $600. Got back to the states and an appraisal was at $2500-3000.
Like I said, it wasn't for investment but it's not something I'm going to sell anytime soon either.
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Old 27-03-2011, 23:10   #35
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Re: How to invest?

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If you bought gold in Dec of 1978, it took until Dec of 2006 to get back to the same price.

If you throw in the effect of inflation, it is even worse.

S&P 1978 = 96.11
S&P 2006 = 1418.30

Hmmmm... wonder which was the better investment?
Yes, but if I had outbid the Dutch when they bought Manhattan from the Indians, I would be even happier.

The point is that if you are happy with under 4% returns, the last decade or so would validate investing in stocks. Have at it. I actually was a buyer of stocks in the 80's. Fortunately by the 90's I had moved on, and a good thing, although an investment in the S&P would have returned about the same as gold - except I would have had to wait an extra 10 years to see the return.

To each his own.
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Old 28-03-2011, 01:53   #36
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Re: How to invest?

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Newly honed mod instincts cutting in here....

Do you own this property / know the owner of the property / work for a publicity company who represents this property / have any other connection with this property or its owners....?
Drats, caught spamming the forum

No connection with the property other than its about 200 yards from us. If we didn't have two teenagers then would have bought one like it last Autumn. The views across Portsmouth Harbour are impressive and would be a major selling point. Our yacht is just to the left of the first picture.

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Old 28-03-2011, 02:16   #37
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Shabby house, Good location, Good agent...

I'm getting too old for the game now but I've usually gone with a shabby house in a good location and found a good agent. Always asked a little below market for rent. Keeps the tenants happy.

If work was a bit slow there was always the house to fix...

The old rule of thumb was that the purchase price in thousands had to be less than the weekly rent.

Those time I haven't gone that way I've regretted it.

I don't know that I'd go with an apartment. Too many expensive, qualified tradespersons...

But this is in Oz. Prices are really high here now. Other places may well be very different.

If I was serious now I'd love to look at some of the better places in the Caribbean or maybe Brazil. Some parts of Florida could be interesting...

Asia looks like some people go crazy/stupid in some very risky places. Better to rent.
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Old 28-03-2011, 02:23   #38
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Re: Shabby house, Good location, Good agent...

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The old rule of thumb was that the purchase price in thousands had to be less than the weekly rent .
Or expressed another way, in the UK the purchase price of a property used to be equal to about 18 years of rental income. However, a property boom and cheap credit skewed the market for a while, but its now settling down again.

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Old 28-03-2011, 05:06   #39
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Re: How to invest?

Latest inflation rates around the world. No prediction of the future, just where things currently stand.

Click image for larger version

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Old 28-03-2011, 06:02   #40
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Re: How to invest?

no matter what form of investing you do, you need to study HARD to learn the ins and outs of that investment.
And you need to remain active in following the market & managing your accounts.

One important strategy not mentioned yet is diversification. Don't put all your eggs in one basket.

And don't get greedy. Bulls make money, bears make money, pigs get slaughtered. Stay in that gold trade too long and you'll loose a bunch. Stay in that housing investment and you'll get slaughtered. Stay in that bond fund too long and you'll get killed.

I've been primarily invested in the market via mutual funds for the last 20 years. As things get frothy, I pull back. When things are dire, I jump in.

I make about 4 moves a year, no need to be constantly buying & selling.

So pick an investment and study it hard before taking the gamble.

I find real property to cumbersome to manage while away and it is the hardest asset to sell quickly.
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Old 28-03-2011, 06:06   #41
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Re: How to invest?

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Originally Posted by Mike Sibley View Post
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!
Brilliant advice from a (former) academician who obviously doesn't have his head in the clouds! Cheers, Mike!

I retired 10 years ago and took this precise approach. It has worked admirably through two major market crashes.

With guidance from financial advisers at Vanguard, an American mutual fund company, I picked a well-diversified combination of stock funds and bond funds that matched my risk-tolerance profile. My portfolio management costs average 0.17% per year, giving me an extra 1% return compared with the industry average. The best part is I spend almost no time worrying with managing my investments. With Vanguard's advice, I re-balance the portfolio once a year. That's it! They'd even do that for me if I wanted, but I feel like I've got to do something useful!

The thought of trading commodities, anxiously watching the vagaries of the precious metals markets, worrying about deadbeat tenants, or poring over stock research white papers is abhorrent to me, and I know I'd be no good at it. Although I can understand how others might enjoy that sort of thing while making bundles of money, I'd much rather spend my time sailing, hiking, biking or liming under the palm trees, secure in the knowledge that the little elves at Vanguard are toiling night and day to keep the dividends coming.
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Old 28-03-2011, 06:18   #42
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Re: How to invest?

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Brilliant advice from a (former) academician who obviously doesn't have his head in the clouds! Cheers, Mike!

I retired 10 years ago and took this precise approach. It has worked admirably through two major market crashes.

With guidance from financial advisers at Vanguard, an American mutual fund company, I picked a well-diversified combination of stock funds and bond funds that matched my risk-tolerance profile. My portfolio management costs average 0.17% per year, giving me an extra 1% return compared with the industry average. The best part is I spend almost no time worrying with managing my investments. With Vanguard's advice, I re-balance the portfolio once a year. That's it! They'd even do that for me if I wanted, but I feel like I've got to do something useful!

The thought of trading commodities, anxiously watching the vagaries of the precious metals markets, worrying about deadbeat tenants, or poring over stock research white papers is abhorrent to me, and I know I'd be no good at it. Although I can understand how others might enjoy that sort of thing while making bundles of money, I'd much rather spend my time sailing, hiking, biking or liming under the palm trees, secure in the knowledge that the little elves at Vanguard are toiling night and day to keep the dividends coming.
My what a boring strategy Hud! Too bad you've gone and given away the secret to a rational and apparently successful financial plan.
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Old 28-03-2011, 07:49   #43
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Re: How to invest?

Why would anyone come on a sailing forum to seek financial advice? Anything that is guaranteed on paper will only be good for butt wipe,since inflation will make it prohibitively expensive to afford the real stuff. Physical ownership of gold & silver, no promissory notes or guarantees of payment, unless you need a large amount of paper for future bowel movements,physical ownership of precious metals will guarantee your financial survival anywhere you choose to live,but coming on here or any other type of forum bragging about one's financial astuteness,could only lead to one's demise. Silence and humility would be the next best investment in surviving the on coming financial melt down.
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Old 28-03-2011, 10:34   #44
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Re: How to invest?

Not sure if you consider it investment but Lebanese lira gets about 4.5 to near 6% in the banks depending on the amount and duration your locked in for.
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Old 28-03-2011, 12:04   #45
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Re: How to invest?

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Not sure if you consider it investment but Lebanese lira gets about 4.5 to near 6% in the banks depending on the amount and duration your locked in for.
Careful with foreign denominated investments as now your playing the ups and downs of a volatile currency market.

As a Canadian, I am avoiding most U.S. based investments (there are some great real estate plays that have emerged, however).

The U.S. deficit will impact the U. S. dollar negatively over the long term, and until the citizens come to an agreement that they really want deficits and national debt eliminated, it will continue to decline.

Canada faced the same problem and would be in the same boat had not virtually all political parties on the left and right listened to the Canadian people back in the mid- 1990's wish to eliminate the deficit.

As a result, Canada is in the best shape of any of the OECD or G8 countries.

The BUT is that the citizens of the country need to want it, and I don't sense that being a general perspective yet in the U.S.

My honest opinion only.
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