Hey guys, I have about $600 or so that I should invest or else I will be tempted to spend it it. I know that this is not a finance forum, but what do you guys think I should do: Invest the $600 (give or take a couple hundred) in the stock market or buy a set of coins. I plan on investing it for the long term. If stock, explain your reason, or if coins explain your reason and give me some recommendations. Thanks!
I'd go with stocks, if you know what you are doing. However, since you are asking advice on this forum, I would recommend coins, as you don't want to get burned with the current market.
Start a Roth IRA with a discount broker (Scottrade is best). Just go on their website and email them to let them know you want to start a Roth it is very easy. Do research at Yahoo finance, I also like Forbes, and Smartmoney. A sharp guy on Nightly Business Report suggested uranium (CCJ is the big uranium miner). A traditional approach to a Roth would be a high yield bond fund. Zane is correct though, this is a tough market.
Most probably stocks. You see, you have plenty of news about stock markets and analysists, but on the other hand, you get squeezed a tight margin. On the other hand, if you are into coins, that itself is another difficult thing. Because you never get to know the whole picture, and much less infomation than the whole stock market analysis, you have to guess what's going to be hot items. Worst comes worst, prices can bottom out the worst time ever. There are times when palladium exploded into insane prices and palladium coins became so scarce that right now, there are countries that are interested in restarting minting coins in palladium now. Honestly, it's really hard to tell. It all depends on supply and demand - don't forget the basics...
In order to invest on stock don't you have to follow it?? You have to know the market and when to withdraw. Why not something like Gold Bullion. Nice to look at and the prices are climbing.
If you want an investment, the answer is stocks. Coins, strictly speaking, are not an investment. I view gold and silver coins as an alternative currency, so they are the equivalent of a foreign currency money market fund. But that's me. Since you are thinking about coins, you probably should look at stocks that will respond well to higher rates of inflation, since that is presumably what you want coins to protect you from since they generate no income. Both are specialties. If you haven't invested in either stocks or coins before, be prepared to pay a little "tuition" in the form of losses as you become more educated about each. Think twice about buying stock in an IRA or Roth IRA. Long term gains and dividends outside of the IRA umbrella are currently taxed at 15%. Inside of the IRA they are taxed as ordinary income when the money is withdrawn. Don't accept anyone's advice on this. Run the numbers for yourself.
You must do your DD but there is no tax on withdrawl from a Roth (I am sure on this one), the thing is that you put AFTER tax money into a Roth.
it all depends on how much time you have to let it mature. the faster you can make money in a stock the faster you can loose it. i like gold and silver in hand. no matter what happens to the market you still have it in hand
Long time members know my feelings about "investing" in coins. Stocks are an investment, IMHO coins are (or at least should be) a hobby (or profession, as the case may be). But stay far away from either one unless and until you have done your homework. Education is the key to success in the market as well as in assembling a coin collection that will hold its value. My first brokerage account was opened in the '60s, and over the years I have had more winners than losers, and the winners have generally had bigger gains than the losers had losses. I credit that success to the fact that I never buy a stock, mutual fund, real estate investment trust, bond, or other investment without thorough research into the current state, and both short and long term prospects, of the economy in general, the company, the industry it's in, and the people running it. I don't rely on the opinions of any single analyst, adviser, or other financial "guru", and I sure as don't rely on "tips", barbers, waitresses, etc.; or let emotion push me into either a buy or sell situation. I get my tax advice from qualified accountants/tax lawyers, and my legal advice from qualified experts in the relevant field if it's outside my own area of expertise developed in 40+ years of practice. In real estate the three most iimportant things are location, location, location. In investing the four most important things are knowledge, knowledge, knowledge, knowledge. Right now, but they still have a very long way to go before people who invested in 1980 will break even in number of dollars, and much further before they break even in inflation-adjusted dollars! Current prices are at or near their highest in 18 years, but still about 45% below their peak of 25 years ago. Cloudsweeper also makes a good point about coins not producing any income. My Beautiful Bride and I can almost make ends meet on our social security and pension income, but without the income from some of my investments I wouldn't be able to add much of anything to my coin collection, or any of my other collections.
I made enough as a short term stock trader to enable me to retire 10 yrs. early, but I'm pulling out of the market and sticking the money in coins. I dont like the atmosphere of the stock market these days, all the greedy crooks and thieves in corporate America today turned me off. All the jobs sent to China and shoddy useless products just leave me to believe we headed down the wrong path. If you purchase coins with carefull attention to buy price you can do very well. Personally I think some of these greedy ceo's should be forced to move to China and have there citizenship revoked. Some coins are commanding prices even over the book price. Early cents right now seem to be hot.
If I could add my 2 cents, I would say it depends on your financial position. If this is a once in a while windfall, to be perfectly honest, 600 does not go far in the investment market - if you could do 600, and square away 200 a month to add to it, then you will see some long term accumulation IF you have done what Roy said OR you get really lucky. 600 alone, would get eaten by transaction fees in no time... If you are looking to make money off 600, you might want to talk to your banking professional, and see what they have available that would work best for you. As has already been said, coin collecting is a hobby. knowledgable people who spend a lot of time at it sometimes make money with it, but, by and large, the rest of us part-timers spend money for enjoyment.
