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ok, there's been a lot of talk about a lot of speculative stuff like forex and commodities, so I thought i'd start a thread where people could discuss strategies/ why this appeals to them...
high risk, high reward?
- Thread starter etf
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I mentioned this before--but I knew with a lot of confidence that the dollar was going to dip prior to 9/11--but I had no money to invest--so I missed the gold train.
No--of course I didn't know 9/11 was going to happen to way it did. It just made sense the dollar was going to dip. The stock boom was over. The bubble burst, we were going into recession, there was no reason to see another economic boom for some time.
Then after 9/11, there was much stronger reason to see it dip even more. War--a looming deficit which was once thought to not come back for decades, then Iraq--even bigger deficits and the economy was still offtrack.
Darnit--if I just bought some foreign currency back then--the dollar back then was like 1.6 Euros. Now a dollar will get you about 0.7 Euros!
ETF mentioned this: investing in Indian currency. Seems to make sense to me. The Indian economy is supposed to be growing tremendously, while our own is on shaky ground.
LADOC--not to get too dramatic about it--but I've read several similar sources of info that you posted, and by guys I trust. I'm not trying to create some type of rivalry with those that disagree with you. I think you got solid reasons for wanting to invest in metals. I also think that several people that don't accept the the instability of the dollar don't see the thin ice we're on with our economy now.
In addition to metals--being that other countries aren't projected to have weaker economies as ours possibly will in the future--I've considered foreign currency exchange. I'm still studying it myself.
Another area I considered investing in is alternative energies--given the energy price increases we've had. Supposedly markets for solar & wind have increased quite a bit. Problem I have is I can't find any 1 particular company which seems to be a good stock buy. Several of the bigger companies from what I understand such as GE are now investing a lot into alternative energies--and those corporations are giants compared to the pure alternative energy companies.
Last thing I'm considering is real estate. The market is slowing down, but I'm also in a position where I would like to live in a place on my own for now, that I own. Another thing (and this is a local thing, not something that'd concern people here) is that I'm in a market where there is possible room to go up, despite the national real estate cool down.
No--of course I didn't know 9/11 was going to happen to way it did. It just made sense the dollar was going to dip. The stock boom was over. The bubble burst, we were going into recession, there was no reason to see another economic boom for some time.
Then after 9/11, there was much stronger reason to see it dip even more. War--a looming deficit which was once thought to not come back for decades, then Iraq--even bigger deficits and the economy was still offtrack.
Darnit--if I just bought some foreign currency back then--the dollar back then was like 1.6 Euros. Now a dollar will get you about 0.7 Euros!
ETF mentioned this: investing in Indian currency. Seems to make sense to me. The Indian economy is supposed to be growing tremendously, while our own is on shaky ground.
LADOC--not to get too dramatic about it--but I've read several similar sources of info that you posted, and by guys I trust. I'm not trying to create some type of rivalry with those that disagree with you. I think you got solid reasons for wanting to invest in metals. I also think that several people that don't accept the the instability of the dollar don't see the thin ice we're on with our economy now.
In addition to metals--being that other countries aren't projected to have weaker economies as ours possibly will in the future--I've considered foreign currency exchange. I'm still studying it myself.
Another area I considered investing in is alternative energies--given the energy price increases we've had. Supposedly markets for solar & wind have increased quite a bit. Problem I have is I can't find any 1 particular company which seems to be a good stock buy. Several of the bigger companies from what I understand such as GE are now investing a lot into alternative energies--and those corporations are giants compared to the pure alternative energy companies.
Last thing I'm considering is real estate. The market is slowing down, but I'm also in a position where I would like to live in a place on my own for now, that I own. Another thing (and this is a local thing, not something that'd concern people here) is that I'm in a market where there is possible room to go up, despite the national real estate cool down.
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i think as long as america has the strongest military in the world and still gets respect as "the superpower", the dollar isn't going to crumble any time soon.
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we are certainly losing that respect as a superpower.
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whopper said:
There is a great real estate site called lowball.com I think, something like that. gives you the margin between initial asking price and final sale. The spread is getting HUGE. In many cases 30% off the original. Anyway, Im all about LOWBALLING sellers, fook em, they are getting huge margins even if I offer em 60% of what they are asking. Another way is real estate auctions, although you have to swing 10% of the asking price in cash up front at most of em now. I may scrap together 60-70K this year in cash and try some of em.
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First off, you could never get 1.6 euros to the dollar. Don't look to the weakness of the dollar as a sign of poor monetary policy and/or a weak economy. Instead look at it as a tool to make U.S. investment more attractive.
Commodoties trading in general (currency as well) should be used purely for hedging purposes. The only people I know who can truly trade commodoties well are those who are on the actual trading floor. If you think you can trade commodities and make money, quit your day job. Spend fifty grand and buy yourself a seat on an exchange. A good trader should be able to trade anything, but its not based on speculation. Speculation on commodities has no place in an intelligent investor's portfolio.
That's just my thought.
Commodoties trading in general (currency as well) should be used purely for hedging purposes. The only people I know who can truly trade commodoties well are those who are on the actual trading floor. If you think you can trade commodities and make money, quit your day job. Spend fifty grand and buy yourself a seat on an exchange. A good trader should be able to trade anything, but its not based on speculation. Speculation on commodities has no place in an intelligent investor's portfolio.
That's just my thought.
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I've noticed a lot of hot and exciting investment strategies discussed here since the forum was started.
I haven't seen convincing evidence where a high risk, high reward or "chasing the winners" strategy works over an extended period of time. By extended period of time I mean until you decide to retire from medicine. For most of us I feel that trying to beat the market is like playing the lottery. A rare few will win but most of us won't get anywhere.
If, of course, you're the next Warren Buffet, and you feel you can do better than market rate returns by all means go right ahead. Although even Buffet has recommended low-cost index investing to the average investor.
You may get lucky for a few months or even a few years and if you're really lucky you'll jump from "hot" investment to the next "hot" investment. But after investment expenses and taxes come out I don't see where you'll end up ahead of, or even on par with a low-cost, "conservative" asset allocation strategy. And this assumes you have a high enough risk tolerance that you're willing to ride the ups and downs of a high risk strategy.
If you want "risk" with a conservative asset allocation strategy you could simply choose to be 100% invested in domestic stock through something like the Vanguard Total Stock Market Index fund (VTSMX) or Fidelity Spartan Total Market Index fund (FSTMX). If you want to be more "conservative" you can choose whatever mix of domestic stock, international stock, and bonds you feel is most appropriate for your risk tolerance.
I haven't seen convincing evidence where a high risk, high reward or "chasing the winners" strategy works over an extended period of time. By extended period of time I mean until you decide to retire from medicine. For most of us I feel that trying to beat the market is like playing the lottery. A rare few will win but most of us won't get anywhere.
If, of course, you're the next Warren Buffet, and you feel you can do better than market rate returns by all means go right ahead. Although even Buffet has recommended low-cost index investing to the average investor.
You may get lucky for a few months or even a few years and if you're really lucky you'll jump from "hot" investment to the next "hot" investment. But after investment expenses and taxes come out I don't see where you'll end up ahead of, or even on par with a low-cost, "conservative" asset allocation strategy. And this assumes you have a high enough risk tolerance that you're willing to ride the ups and downs of a high risk strategy.
If you want "risk" with a conservative asset allocation strategy you could simply choose to be 100% invested in domestic stock through something like the Vanguard Total Stock Market Index fund (VTSMX) or Fidelity Spartan Total Market Index fund (FSTMX). If you want to be more "conservative" you can choose whatever mix of domestic stock, international stock, and bonds you feel is most appropriate for your risk tolerance.
