Hi,
I am thinking about investing, but right now it doesn't look as if the stock market is a good place for investment. It looks like Europe is going to fall and the stock market with it. Investing in gold is too frightening. It can very well lose in value just as it gained, which is a lot (who knows maybe bitcon or platina will be the currency of the future). So it just doesn't seem that there is a single good and safe place to invest. What do you think?
Eugene:I am thinking about investing, but right now it doesn't look as if the stock market is a good place for investment.
Don't tell me...you got that from the mainstream news.
It looks like Europe is going to fall and the stock market with it.
Lemme guess...the news again?
Investing in gold is too frightening.
News?
It can very well lose in value just as it gained
How do you know it's not the value of the currencies gold is being measured in that has fallen?
You don't think Europe is going to fall?
I don't even know what that is supposed to mean. You mean like, off the face of the Earth? You mean like the Roman Empire? You mean like have a decline in the stock market?
Make no mistake, Europe's debt situation is going to cause the implosion of the ECB and European stocks. The US will probably not collapse as drastically because we have a license to print, so it could be a more protracted situation. It's strange to realize, but there aren't any paper currencies worth investing in. Physical money is all that is going to store your value now. Don't think of it as buying metal, but rather selling your dollars/euros. Do you read ZeroHedge?
The Anarch is to the Anarchist what the Monarch is to the Monarchist. -Ernst Jünger
Gold is not an "investment". It's an insurance policy against monetary inflation. You have to be prepared to hold it in the long run so plan accordingly: some analysts suggest a monthly/bimonthly purchase regardless of price. I suggest setting some money aside each month and buy when you think the time is right or you find a good deal (this is partcularly true about coins, especially if you are a vulture like me). Now that the new chairman of the ECB as his first act lowered interest rates yet again expect gold to rise once again and at a faster pace. Ironically I acquired my latest gold coins and silver ingots the day before this announcement: in just one day they went up over 2% on the European market. Of course gold prices will fluctuate in the present climate of volatility but as long as the Neo-Keynesians (can we call them neokey?) are firmly entrenched at the ECB and the Fed the trend will be upward.
As per investments, it depends on the risk you want to take. Short term US Treasuries are still a safe bet, as is everything rice-related. Yes, rice, the staple food of over two billions people. While most commodities reached a peak in April this year and tanked during the Summer rice has kept escalating in price. Excluding China most Asian countries have wholly inadequate rice reserves and it's one of those things people will always need. The US is one of the major rice exporters in the world (with Riceland being the top world producer) so you may look for investment opportunities in that sector.
You may also want to consider oil companies without large interests in the Middle East (Petrobras, Sasol, Canadian Oil Sands etc) as war with Iran is not an impossibility now and it will affect oil supply.
Finally another thing: you may consider keeping a considerable amount of your holdings in cash. This is is a time when having liquidity at hand is paramount: you won't make money out of it but you will only lose inflation. As bad as it sounds when stock markets are so volatile it may be a survival strategy.