Investments - what's working out for you?

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Well, gold is also hedge against the falling dollar. So if you think the dollar has further to fall, then it might not be a bad place to look either.

A recent article from CNN/Money:

Should you be buying gold?

― o. nate (onate), Monday, 6 June 2005 17:59 (eighteen years ago) link

I think the guy is wrong to mention China without mentioning India, which I think is the more important story in terms of growing global gold demand, but that's just to show that the idea of buying gold isn't only some crackpot/fringe notion.

― o. nate (onate), Monday, 6 June 2005 18:01 (eighteen years ago) link

That piece is from Dec. 2004, which might as well be the Pleistocene Era in investing time. For one thing, anyone who has been following the data in recent months knows that the risk of higher inflation is substantially lower now than it was in December of last year. This is borne out by the very narrow spread between the yield on the 10-yr. Treasury note and the yield on the 10-year Treasury Inflation Protected Security, which is the best measure we have of the market's inflation expectations. The tighter the spread, the lower the expectations for rising prices. The spread is narrow all along the yield curve.

Second, trying to outgess the currency market is about the quickest route to the poorhouse that I can think of. If you are worried about a decline in the dollar that would be so precipitous that you would want to transfer your cash into a commodity, and you think that such an event would last throughout your entire investment planning horizon, you shouldn't see a financial planner, you should see a psychiatrist.

― rasheed wallace (rasheed wallace), Monday, 6 June 2005 18:11 (eighteen years ago) link

The bond market may be currently forecasting low inflation, but their are certain respected economists who take a contrarian view. For instance in his NY Times column of April 18th (less than two months ago), Krugman raised the specter of "stagflation" - a combination of low growth and inflation that would leave the Fed with few viable options. You can find the article here:

http://www.truthout.org/docs_2005/041805L.shtml

― o. nate (onate), Monday, 6 June 2005 18:19 (eighteen years ago) link

Krugman's stagflation forecast may be borne out in time, or the market forecast for mild inflation and relatively strong but not spectacular GDP and employment growth may be borne out. But neither scenario makes investing in gold look any better to me as an individual investor. Volatile commodity metals that can swing wildly in price and are greatly subject to the whim of a relatively small number of powerful institutional investors are rarely a good choice for an individual, even for the most wealthy among us.

― rasheed wallace (rasheed wallace), Monday, 6 June 2005 18:29 (eighteen years ago) link

BTW: Just what is it this 20G is expected to do?

― Rufus 3000 (Mr Noodles), Monday, 6 June 2005 18:35 (eighteen years ago) link

an amateur investor putting loads of money into commodities = one of the surest ways for said amateur investor to lose just about all of that money.

― Eisbär (llamasfur), Monday, 6 June 2005 18:36 (eighteen years ago) link

I'm getting visions of Tommy Wilhelm and Doctor Tamkin in "Seize the Day".

― Hurting (Hurting), Tuesday, 7 June 2005 00:22 (eighteen years ago) link

As I said earlier, I'm relatively new to this, but I'm realizing quickly that when it comes to investments, a little knowledge is a dangerous thing. There's a reasonable-sounding argument for almost any kind of investment. I'm going to have to learn a lot more before I can really sort them out.

― Hurting (Hurting), Tuesday, 7 June 2005 00:23 (eighteen years ago) link

djoo guys see da times magazine yesterday?

― hstencil (hstencil), Tuesday, 7 June 2005 00:28 (eighteen years ago) link

I think I read somewhere that the long-term returns on gold over the last century or so have come out to not much at all after inflation, whereas the returns on stocks have been enormous.

― Hurting (Hurting), Tuesday, 7 June 2005 00:38 (eighteen years ago) link

Since the inception of the market, publicly-traded shares in corporations have beat the shit out of everything else around. but to an actual human investor "STOCKS" over a "CENTURY" is a performance metric that's about as useful as "HORSES" over "550 YARDS."

― TOMBOT, Tuesday, 7 June 2005 00:48 (eighteen years ago) link

Sure, stocks is a broad category, and a century is a long time, but gold is gold.

― Hurting (Hurting), Tuesday, 7 June 2005 00:49 (eighteen years ago) link

yeah stence, I just started reading some of those Times magazine pieces last night. Of course, given our conversation here, one of the first things I turned to was the article on gold bugs, and I was pleased to see that Metcalf touched (however briefly) on the main problem with gold: like all other commodities, it is subject to the forces of supply and demand, and really has no fixed intrinsic value in and of itself. Like paper money, it is a medium of exchange. But Metcalf doesn't take the final step. If gold really does hold out the "chimerical" possibility that "one day we might pierce the veil of money," then we have to ask ourselves, what is that we expect to find once the veils are lifted?

Anyhow, I read the article on hedge funds, too, which was really interesting. I printed out Asness's paper on stock options to read later.

― rasheed wallace (rasheed wallace), Tuesday, 7 June 2005 11:01 (eighteen years ago) link

two years pass...

my 401k lost over $400 this last quarter, I sure as fuck am moving almost all of it into the lower-risk funds...

― Dr Morbius, Thursday, 17 January 2008 23:00 (sixteen years ago) link

(I cannot be bothered w/ much research, that's just the way it is)

― Dr Morbius, Thursday, 17 January 2008 23:01 (sixteen years ago) link

thirteen years pass...

(^^^^ Morbius! ^^^^^)

Has anyone bought stocks online? I'm sorta interested in making a modest investment of some kind but am slightly intimidated, and afraid of sleazy online brokerages.. recommendations would be helpful.

― Andy the Grasshopper, Wednesday, 13 October 2021 23:09 (two years ago) link

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