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Originally posted by Kurr

Welcome to the forum young brother. I haven't done proper investigation yet, but I think rhodium looks good, as well as platinum if the fed mandates much "green policy". I don't want paper investments, but there is a mutual fund that is into India I might like. Apparently India is aboout to do mass growth, infrastructure wise. From what I understand this would be comparable to investing in General Motors at the start of their interstate building project back in the day. I have heard that India's economy follows China on rouughly a 14 year trail and they are poised no t o inherit the high growth rate that china recently enjoyed.

Good questions by the way, And I personaly prefer the term conspiracy exposer to theorist.

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Originally posted by keys

Welcome tcy56
CDs and EE or I bonds, boring but safe, your parents want you to keep the money safe so they suggest these investments.
Upside, no risk of loss.
downside, loss of buying power due to inflation.
Compromise, a few I Bonds for protection from inflation, some EE Bonds since EE Bonds pay a regular interest rate.
Offer to put 75% of your investment money in bonds 25% into speculation.
-This is very good advice and I believe this will be the strategy I will take.(Or at least some variation of it. Such as 50/50 or the like.)
Now for the 25% speculative play- what we on the forum would call investing in "penny stock", (pennies themselves.)
The idea is to convince your parents your goal is to search for the old wheat cents (pre-1939 Wheats sell for 5 to 10 cents and up) error coins, copper cents, etc. Call it a numismatic move. If you get bored with it you can cash in the cents at any time and all you have lost is your time sorting.
The amount of money tied up in copper cents would be a few dollars at a time, maybe five or ten dolalrs. Not enough to make your parents discourage copper hoarding, and again, it is redeemable for paper bills at anytime.
-This is what I am doing as of late by buying $25 dollar boxes.




Sorry for the long post, just wanted to pass on alittle bit of investment advice.
Also, look around and see if you can get a copy of the book
"The Money Game" by Adam Smith. It doesn't tell you what stocks to buy but it does tell you what the mind set of other investors are, and knowing what everybody else is doing and thinking will give you an advantage over the average investor.

-That post was just great and it gave me a lot of insight on how to invest my limited amount of money. I've got a lot of books on my future reading list, however I will put that one on it and If I run across it I will read it. The reviews at Amazon make it seem like an interesting book.
Thanks for all the helpful advice!

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Originally posted by Market Harmony

tcy56,

If you think that the dollar will suffer inflation, AND you think that stocks are going to be a good bet in 5 years, then why wouldn't you want your money in commodities with many industrial uses?

Wealth can be conserved in commodities. If the stock market is going to be good again, then that means growth. Growth means that goods are flowing, and this means commodities are flowing too. But, as I am assuming you know, the market doesn't react exactly when the news is out. The market normally front-runs the economy. So, if you are expecting that in 5 years time you are going to be able to successfully invest in the stock market, I am assuming that you mean the economy will pick up in 5+ years.

The economy won't pick up until commodities become readily available and reasonably priced... ie, the price is declining. I'm not giving investment advice, but what I am getting at is this: buy industrial commodities today, ride them up for 5 years, cash out, and then go to stocks. As at that time, according to your prediction, the economy will be turning, and commodities will be declining in price.

At your age, a lack of diversification is acceptable as you won't be retiring at 20. If you lose, you'll make back the $10 K, with your smarts, in no time.

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Originally posted by tcy56

How does investing in about 50% in a American Funds mutual fund called the American Balanced Fund with the other 50% being split between I bonds, copper cents, and silver? I think we all know the stock market is bound to rally in the coming years. With a large basket of stocks, a long with silver, copper, and bonds I believe that is pretty well diversified, no? If no one agrees with that please fell free to give me your suggestions.

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Originally posted by Copper Catcher

tcy56 - Welcome to the wonderful world of copper sorting/hoarding metals and basically whatever else you want to know but were afraid to ask! I want to congratulate you on looking to secure your own future and looking to invest at and early age.

To help answer your question I think it would be good for you to
read this article:

The Truth about America’s Debt
By Vasko Kohlmayer
FrontPageMagazine.com | Friday, February 13, 2009

At the cost of more than $800 billion, the just -passed stimulus bill stands as the largest single outlay item in history. So great is the amount involved that it exceeds the GDP of even such economies as Australia, Saudi Arabia and Argentina.

Needless to say, the federal government does not have the cash to finance its latest undertaking. Much of it will have to be borrowed, and that amount will be added to the budget deficit, which, many now believe, will top one trillion dollars.

The deficit will be then appended to the national debt, which currently stands at $10.7 trillion. Nearly than 70 percent of our GDP, this astounding amount grows by $2.3 billion every day. To put it in comprehensible terms, every single American family would have to pay $160,000 in taxes in order to erase that amount.

But this is not the full story. The $10.6 trillion is only a fraction of the real national debt, which, in reality, is roughly six times higher. The difference between the official figure and the government’s true obligations is made up of entitlements, primarily Medicaid and Social Security. By pledging to cover the costs associated with these programs, the U.S. government is now beholden to the tune of $50 trillion.

This pushes its overall obligations to the stratospheric neighborhood of $60 trillion. To put it into prospective, this figure is roughly four times our national GDP and larger than the GDP of the entire world in the year 2007. A debt the like of which the world has never seen, to pay it off every American household would have to fork over on average $516,000. Yes, you are reading correctly: Every American family is now on the hook for over half a million dollars, and counting.

There are, however, some experts who estimate that the actual figure is larger still. One of them is Richard W. Fisher, the head of the Federal Reserve Bank of Dallas, who said in a speech before the Commonwealth Club of California:

Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent.

Since our spending-addicted representatives do not want us to know the full extent of America’s indebtedness, they have come with an ingenious way of taking entitlements off the nation’s balance sheet. Entitlements, they claim, are not genuine accounting liabilities, because they can be cut or reduced if the need should arise.

This is a rather clever argument to be sure, but there is one problem with it. Almost everyone knows that for all practical purposes entitlements can never be cut. For this to happen a willing president and a willing Congress would be required, a combination that is very unlikely to occur. Considered a minefield of American politics, most politicians steer well clear of the subject of entitlement reform.

Those few brave ones who have attempted to place the crash-bound train on a sounder track have been invariably savaged. You may still remember what happened to George W. Bush who after his re-election sought to use his “political capital” to reform Social Security.
Unwilling to address the problem, those entrusted with our national finances are using accounting gimmicks to keep Americans in the dark about the state of the country’s financial condition. By underreporting the extent of the government’s fiscal obligations, they are seeking to prolong for as long as possible their unsustainable spending spree. There are many who fear that we may be past the point of no return in terms of our ability to make good on our commitments. In other words, we may be heading for national bankruptcy.

A few years ago, Senator Edward Kennedy was reported as saying to younger members of his family, “I'm glad I'm not going to be around when you guys are my age.” When they asked him why, he replied, “Because when you guys are my age, the whole thing is going to fall apart.” There can be little doubt that Senator Kennedy had the country’s dire fiscal condition in mind when uttering those haunting words. Although a proponent of big spending all his life, Kennedy seems to realize that sooner or later the hour of reckoning must come.

Regulations require that corporations as well as state and local governments record expenses immediately after a transaction takes place, even if the payment will be made in the future. The federal government, however, refuses to play by this rule. Instead it looks for ways to keep its astronomic obligations off the nation’s balance sheet.

Rather than wisely administering America’s finances, our representatives are about to add hundreds of billions of dollars to the already crushing national debt. Reckless and irresponsible, they are taking this nation down the road to a fiscal Gomorrah.

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Originally posted by keys

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Originally posted by tcy56

How does investing in about 50% in a American Funds mutual fund called the American Balanced Fund with the other 50% being split between I bonds, copper cents, and silver? I think we all know the stock market is bound to rally in the coming years. With a large basket of stocks, a long with silver, copper, and bonds I believe that is pretty well diversified, no? If no one agrees with that please fell free to give me your suggestions.

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To get back to the question posed,

Forumco discourages specific investment advice (Buy XYZ, sell ZYX) but does turn a blind eye towards general advice (as can be seen with this forum, buy gold, buy silver, etc.)
Part of the reason I suspect is due to the pump-n-dump artists that still lurk on blogs, forums and the like to sell their bad investment advice. Also, it is due to the fact everyone has an opinion on what to buy or sell, but when people try to pass their opinion of as absolute fact, investors get burned in the process.

Gold, silver, pennies, nickels, etc. are not investments in the strictest sense, no SEC or state regulators oversee the buying or selling of coined metals or PM ingots. Though buying PMs and base metals can be considered investments by members on this forum, they are not considered as such in the world of investing.

"American Funds mutual fund called the American Balanced Fund"
I don't know much about it so I can't say great buy or terrible buy, I am not a broker (and I don't play one on TV)
I will say this about stocks in general-

Right now the stock markets, all of them, all of them worldwide, are in panic mode. Nobody has the slightest or vaguest idea what the heck is going on or what the future holds. The Dow and S&P500 have both gotten clobbered last year and there is no idea if they will turn and go higer or turn and go lower.

I am not going to say this is 1929 all over again, but I will say this-
1. After the crash of 1929 the market moved back up-
then declined again
then moved back up
then declined again.
I think it finally hit rock bottom in 1933 or 1934 (I will have to doublecheck on that) but for each slow rise that happened, investors put money back into stocks only to watch as their portfolio got hit with losses again and again.
Now is the time to save up cash and wait for the bleeding to end, which could take a few years. This will give you time to save up for the eventual stock market plunge.

2. The stock market is bound to rally-but only when one thing comes back to the markets.
That one thing is NOT
dividends
profits
experts saying the market has bounced back (experts have been dead wrong during the past few years.)
great valuations
Fabulous P/E ratio

The one thing missing is OPTIMISM!
If buyers are not optimistic (or if you prefer confident) they are NOT going to buy. If buyers are scared of losing their jobs or all of theur investments they are not going to buy, hence the flood of money into US Treasuries lately.

Look back at the dot com fiasco, optimism reigned supreme, IPOs were all the rage. Those who kept their heads (the very Very few) profited handsomely wheile the vast majority lost their shirts.
You don't hear about stocks in the new economy much since the buyers have lost all optimism in such companies.


3. The stock market is bound to rally-but that doesn't mean it will anytime soon. Wait until the stock market bull returns to the scene, then consider getting into the market.
Nobody but nobody ever got in at the bottom and out at the top. Nobody
The most successful stock pickers get in when it starts to go up and optimism is fully entrenched in the buers psyche. They get out when they have made their profits but know better than to get too greedy.

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This is just general information and just my suggestions, take them or leave them as you will. I wish you all the best in your future investments.

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