Good Investment


#1

Hey everyone. I wanted to make this thread because in a couple of years I will have a decent income with very little overhead. I don’t know what to invest in, I know that stock is very shoddy and unpredictable and I don’t have enough money to be able to day trade after I’m through working. I think I would like to invest into commodities but I’m unsure of what the best ones are? Also, if you can think of any kind of companies that would be good to invest in etc. then that would be cool too! Think of this thread as a sort of brainstorm of different investments I can do in a few years.

The reason I am asking you all is because obviously you have more business knowledge than I do.


#2

3D Printing Companies, both the software and hardware side.


#3

Yeah, that’s pretty good. For the hardware side do you think I should be looking to invest in more the industrial like large scale machines or the ones that people could purchase for home?

Do you feel that 3d printing has a large scale viability? For example like building a house with one.

Thanks for the input


#4

Both industrial and personal, different companies are developing each.

It is not only viable it will revolutionize how everything is made and destroy the competitive advantage that low wage nations with little regulation enjoy.

Box stores, warehouses, “Just in time” delivery models and “back orders” will all be concepts of the past, raw material acquisition will be the key to prosperity and the middle of nowhere will be no less viable than a grand shipping port next to an international airport .

3D printing will be the technology that changes everything on every level.


#5

I agree, I think it’s an exciting prospect for the future. I know we don’t agree on the environment thing but I think we can both agree that having to ship primary materials to far off countries to be made with low wage workers and then shipping them back as finished products is a waste (of time, oil etc.).

3d technology really will be interesting


#6

While JIT delivery models look great on paper and can be economical for an overall corporate structure, they are very vulnerable to disruptions in the supply chain that feeds them. It works best for products that can be manufactured quickly–meaning the time from order to delivery is very short. For items that have very long lead-times–meaning the time from order to delivery of the first unit could take several months.

I’m not an investment strategist by any means but, well-diversified mutual funds that spread your investments amongst higher risk funds (~65%), lower risk/government bond funds (~25%), and International funds (~10%) have been a proven strategy for long-term retirement planning. If a young person in the twenties were to invest 15% of the income in this manner, they are very likely to retire as a millionaire.


#7

While JIT delivery models look great on paper and can be economical for an overall corporate structure, they are very vulnerable to disruptions in the supply chain that feeds them. It works best for products that can be manufactured quickly–meaning the time from order to delivery is very short. For items that have very long lead-times–meaning the time from order to delivery of the first unit could take several months.

I’m not an investment strategist by any means but, well-diversified mutual funds that spread your investments amongst higher risk funds (~65%), lower risk/government bond funds (~25%), and International funds (~10%) have been a proven strategy for long-term retirement planning. If a young person in the twenties were to invest 15% of the income in this manner, they are very likely to retire as a millionaire.


#8

Setting aside a percentage of your income when you are young for investment and sticking to it is the best advice any young person can heed, ALL habits are hard to break whether good or bad so developing some good ones early on is a prescription for a much smoother ride down the line.

I don’t personally use mutual funds, I sort of create my own via Scottrade by just choosing some stocks that spread the risk accordingly. If you feel confident doing this it saves all the maintenance fees and lets you reap all the rewards but any strategy that starts a portion of your income earning for you is a step in the right direction.


#9

What if I wanted to invest a large percentage of my paycheck and then pull out after 10 years? Like while in the military.


#10

If it is a pre-tax investment/IRA meaning that it was taken from your check before taxes were taken out, you will be it with huge taxes and penalties. If it was a Roth (After Tax) IRA, you may get hit with some withdrawal penalties but only taxed on your growth. It best to just stop contributing and let it ride until you can convert it into another investment or start adding to it again.


#11

But if I really wanted to pull the money out so I could use the money for something else? Also, does the short term of 6 years change the kind of thing I would want to be investing in?


#12

Mutual funds are meant to be long-term investments. Many are associated with retirement funds. If you go the route the RETs went, you will have more control wrt getting in and out. RETs can talk more to this but, any growth that you have at the time of pulling out your money is subject to taxes.


#13

Ironic considering where the money will be coming from eh?


#14

As far as precious metals go, realize that they are viewed as hedges against inflation.

Their value is largely, but not exclusively as there are other major currencies, based on the value of the dollar and confidence in the economy.

Buy gold and silver according to how you think the value of the dollar will be in the coming months and years.

Money has been created by the Fed at an incredible pace since the recession started for “stimulus”, all while debt has increased exponentially as well.

We are in a trap. If we stop printing money, the “sugar high” will stop and the sectors of the economy where the money is being directed (stock markets, housing, government) will collapse to reasonable levels. However, if we keep printing money, devaluation will continue to rob us and the economy will continue to stagnate. Also, if the economy collapses again for other reasons, that will lead to more printing and further lack of confidence. Factor in the government debt, and that it will be almost impossible to pay off in taxes, we are going to be in for a lot of printing in the future. Finally, private debt will make inflation a favorite policy of those who owe it. Students, homeowners, whoever.

A surge of confidence in the economy isn’t going to be good for us either though. Because all of that money that has been printed up to this point is in bank reserves. If there is a huge demand for loans, it could cause an inflationary spiral.

Why are gold and silver down? One reason is that other currencies are devaluing against the dollar. Also, our fake confidence in the economy at the moment, spurred by the printing which is causing a major asset bubble in stocks. There is a reason corporate profits are at record highs. But it won’t last. Companies aren’t worth what they are trading for. When the market crashes again, it may be worse than the episode a few years ago.

Buy gold and silver now while they are undervalued. That is my opinion, and that of others.

As there is a stock market bubble, the only stocks I would focus on are one’s you think would be worth anything after a financial crisis. Agriculture, some technology.

Government bonds are pretty worthless. TIPS protect the principle from inflation, if you trust the government’s inflation data, and I don’t.


#15

I’m not too interested in stocks, except for the idea RET had which was fantastic. I would like to invest in commodities, maybe gold and silver or potentially something more rare.

One question I have is what a realistic percent increase in money I put in is? Like say I put in 40k, should I be expecting a % increase of %10 or lower? Does that make sense?


#16

With commodities, you don’t earn dividends. But they are generally a store of value, and with the economic outlook you should see a substantial increase.

I can’t give you a number, and no one really can. But if you generally follow the axiom that PMs are the inverse of the value of currencies/economies, you will find out which direction you will be trending. The U.S., EU, and China are all on or will soon be on the downward path in terms of their economies and currencies. Thus, gold/silver will rise as people shift their money to a safer place.

You can view current and historical PM price charts here: Live Charts, Historical Data & Charts - Gold, Silver, Platinum, Palladium, Rhodium, Lease and Forward Rates

But these are the two graphs you really need to see, which are the money supply and public debt.

If I were you I would take a look at microinvesting/angel investing. I don’t know anything about it but I recently bought a book about it that I need to read.


#17

I’ll google it


#18

For what you are considering a straight account someplace like Scottrade without one of the IRA classifications is fine, you don’t get all the tax breaks but no taxes are owed until you sell something for a gain.

If you are steadily adding to a portfolio that you designed, the gains are all on paper until you sell. If you decide in ten years that you want to sell some of your stock for home down payment or any other reason you just put in a sell order for whatever shares you want to part with in a quantity that will net you about the amount you are looking for.

As long as you have owned the stock you are selling for longer than 1 year you will owe taxes on the net increase (meaning the amount you gleaned from the sale minus the amount you paid originally for the shares you sold and the transaction fees), this is called “Long term capital gains” or “Things evil Conservatives somehow how manage to amass on the backs of the poor” (It makes no sense but Liberals and economics rarely mix well).

This “Long term capital gains tax rate” was very reasonable after the Bush tax cut so a lot of money that was sitting in stocks was sold and the proceeds invested in various ventures, after the GOP dumped Bush’s rate last year after the election there was a flood of selling so investors could take advantage of the sunset on this lower rate.

That was why the market tanked right after the election then has risen to enormous highs, investors sold to take advantage of the lower tax rate before it expired then repurchased their stock again to reset their “cost basis” (Amount deductible at sale time from the gross).

Now all that money is sitting there safe from the I.R.S. and the confiscatory rates, it will mostly remain there until a change in the tax code makes it reasonable to pull it out and invest it in other ventures.

Stocks sitting there safe are nice for the owners but it is the risking of stock proceeds in outside ventures that grow the economy and create jobs, our current policy is why this is (and will remain) a “jobless recovery”.

If you become adept at understanding the artificial market forces (consequences good or bad from Government laws and policies passed) then you can know pretty well what moves will keep you from being raped and build enough security to retire without one of the I.R.A. models that limit your freedom to liquidate without penalty if you decide you need the money sooner.

Before IRA’s this was the model of choice for most everyone without a “job,job”, 600 bucks will open a Scottrade account and you are off and running. You will also have an opportunity to test your political opinions against an objective standard in reality.

It will not take many beatings in the stock market before it becomes clear the difference between viable industries and subsidized fantasy’s, Warren Buffett is a flaming Liberal when He is advising Obama on what to do with your money but He does not put one dime of his own into these turd ideas.


#19

Right after the recession hit hard (2008 or so) my business dropped off 85% as my customers started scaling back or leaving the State, I survived the worst 10 month period by investing a months fuel money ($9000,00 I was not needing to buy fuel for a parked truck) into the stock market and I started day trading.

That 9 grand finally ran out 10 months later but I had grown it at an average of 32% per month during the biggest stock market crash since the great depression, I still regret that I could not leave it all invested instead of selling as I went to pay the bills (and the taxes, no long term gains here) because of the astronomical success I was having but if I had had anything else to do with my time I would not have been able to do the adequate research to achieve those gains.

I spent from 5 PM California time until 6 AM California time reading company financials with CSPAN on in the background so I knew every move the government was making or threatening to make just so when the market opened I knew whether this was going to be “sell” day or a “buy” day or a “do nothing” day.

Everyone I know was lamenting their “evaporated retirement” at the same time due to “the crash” but they were paying others to think for them.

My point is that your returns will be based on how wisely you pick, if you are someone willing to make great sacrifices of time pouring over the minutia of information that will reveal the likely economic response to outside stimuli then you will do outstanding.

If you are a “buy and forget” investor then growth industries with well backed ownership groups is probably best (That is Buffet’s big “secret”). The massive “can’t lose” stocks like telephone and utility companies are a thing of the past, no entity is strong enough to survive a lazy board of directors these days.


#20

Haha summed up very nicely. Interesting about the tax rates. You’ll be happy to know that I don’t weigh in on discussions about the kind of economics that we are talking about here. Because I don’t know enough about it, and since I don’t like when people talk about things they don’t know then I try to not do it.

One of the only liberal things I espouse is the environment stuff, and that essentially boils down to not wasting things that need not be wasted. I’m not an idiot, turning off the oil spouts all of a sudden wont work and neither will regulating environmentally to the point where companies die. It seems to me that some how providing incentive is the best option to “save the environment”. The question I ask myself and what other enviros need to ask is why there is no market demand for green tech here, because if there was then things would change quickly. (Off topic, but still applies)

I think commodity trade sounds awesome but you need a lot of start up funds. I really think investing in general is very interesting. People say you have to be rich to do it but even if you can only set aside a small amount and invest you’re still making money. Simple.