~$200k 20 year old college student, what to do?
02-19-2009
, 12:44 AM
Quote:
I'd be wary of a financial adviser. I always wonder why they're working as a financial advisers for some small bank at 40 if they are capable of earning a sufficient gain year in and year out in the market. In my opinion I'd also think most of those financial types have a terrible background based on faulty logic and unsound economic priniciples.
To not have any of that money in precious metals is just lunacy and not wise. To not have atleast 10% of your portfolio in such is just nuts in this current financial climate (that's not even to mention the gains you're missing out on
). I'd stay the heck away from long term investments that lock that capital up for low returns. I'd put atleast 50% into precious metals, gold if you wanna be safer but silver if you wanna take on more risk for greater upside. For physical bullion I'd advise the simplest way to do so would be to use www.goldmoney.com. I would not put it into one of those funds that tracks gold or doesn't actually have to have the physical gold. The other half go nuts with, do what you want. I'd recommend equities in agri-foods like potash and a little bit in energy should you wanna take on a bit of risk but have greater upside. The key here would be to buy tangible assets, stuff you can actually touch with your hands. Stuff that has value even if all hell breaks loose.
I can't really advise on that other half as I myself am 100% in the precious metals right now as I feel that will yield the most profit in the next 5 years. I'm a very aggressive investor given my own individual situation and typically invest in one sector at a time based off of my current macro-economic view of the world. I'm big on contrarian investing as I pretty much feel that mainstream isn't that bright. So yeah, I'm in precious metals because I view it as the greatest opportunity right now, and so obviously I'd advise people to put their money where mine is.
While doing all of this the most important thing to do would be to read, read, read. I'd start out by learning about Austrian Economics. That's the school with sound logic and reasoning and will ensure you don't get burned with the masses. A great book to begin with is this one: http://jim.com/econ/contents.html as well as this one: http://mises.org/books/whathasgovernmentdone.pdf
Should you choose to go with a financial adviser instead I'd expect them to advise you on keeping a high cash position with maybe picking up some muni or corporate bonds.
Again, just keep on learning and reading. It's your best bet. And be a logical knit above all else.
To not have any of that money in precious metals is just lunacy and not wise. To not have atleast 10% of your portfolio in such is just nuts in this current financial climate (that's not even to mention the gains you're missing out on
). I'd stay the heck away from long term investments that lock that capital up for low returns. I'd put atleast 50% into precious metals, gold if you wanna be safer but silver if you wanna take on more risk for greater upside. For physical bullion I'd advise the simplest way to do so would be to use www.goldmoney.com. I would not put it into one of those funds that tracks gold or doesn't actually have to have the physical gold. The other half go nuts with, do what you want. I'd recommend equities in agri-foods like potash and a little bit in energy should you wanna take on a bit of risk but have greater upside. The key here would be to buy tangible assets, stuff you can actually touch with your hands. Stuff that has value even if all hell breaks loose.I can't really advise on that other half as I myself am 100% in the precious metals right now as I feel that will yield the most profit in the next 5 years. I'm a very aggressive investor given my own individual situation and typically invest in one sector at a time based off of my current macro-economic view of the world. I'm big on contrarian investing as I pretty much feel that mainstream isn't that bright. So yeah, I'm in precious metals because I view it as the greatest opportunity right now, and so obviously I'd advise people to put their money where mine is.
While doing all of this the most important thing to do would be to read, read, read. I'd start out by learning about Austrian Economics. That's the school with sound logic and reasoning and will ensure you don't get burned with the masses. A great book to begin with is this one: http://jim.com/econ/contents.html as well as this one: http://mises.org/books/whathasgovernmentdone.pdf
Should you choose to go with a financial adviser instead I'd expect them to advise you on keeping a high cash position with maybe picking up some muni or corporate bonds.
Again, just keep on learning and reading. It's your best bet. And be a logical knit above all else.
this is an amazing time to get some way underpriced corporate bonds, solid profit making companies that have been beat way the hell down, and to get the 'next generation' companies (BIDU) or companies that will do really well when emerging markets come back in a few years (CSCO among others).
there are some GREAT emerging market buys out there as well as ones at home. at least with these you'll have a claim on a real asset rather than a metal that can go out of style as quickly as it comes in. of course we're holding gold, but nowhere near 50% (about 6% in risk space). we're also short the overall market and long some of those companies we like as well as holding bonds of companies that got murdered for no good reason and w/ the elverage we have, yield ~30%/year (we get 3.5:1 on 'inv grade' companies).
in any case, the point is that while gold is a great trade in the current environment, it should be thought of as just that. even those who REALLY LOVE gold (dalio, einhorn, rogers) don't have CLOSE to that amt of their portfolios in it. and at least the first of those 3 have made a sh*tton in the current environment (lol @ rogers unreal suckiness).
so sure, take on gold exposure but:
a) it will probably come down again before going up,
b) it is just ******ed to have 50+% of your wealth in gold
c) see b)
d) realize that EVERYTHING that is predicted as likely catalysts for gold could happen to make gold go up and IT CAN STILL GO DOWN. case in point is rogers short dollar trade. he literally said "X,Y,Z will happen and the dollar will fall" instead, X,Y,and Z all happened and it strengthened.
i realllllly hope i didn't get leveled again though :-( ... seems to happen at least 1 time / day now lol.
Barron
03-01-2009
, 03:32 AM
03-01-2009
, 11:11 PM
