Bullion for Beginners

My grandfather bought those stocks in the '60s and earlier, at a time when they were decent companies and riding the wave of the stock market as it were. He made money on them, and dividends, too. At the time of his passing, the paper value of his portfolio was still pretty decent. My point, which you seem to have missed completely, is that even the best of companies can go belly-up, can flounder, can become involved in some scandal, can be caught up in events that are beyond their control, can be chopped up and sold for scrap at the expense of outsider shareholders. And recent experience has shown that even the bluest of the blue chips, like GM and CITI, can end up being duds.

You might "own" a "piece" of a company with your relatively small investment in its stock, but the big boys control the action. Your proxy vote is a mere formality. And financial statements can be full of "creative accounting" tricks that an outsider, even someone who has done a lot of "due diligence", might not be able to spot.

As for misleading others, I think that it is very misleading to make a blanket statement that "stocks are the best long-term investments" without providing any specifics. I have provided lots of examples where stocks of what were once sound companies ended up being duds over the long-term. I have also provided an example of long-term passive investment in gold that vastly exceeded long-term passive investment in the Dow.

Sure, someone might hit it big in a stock. But they could also lose their shirt. Stocks aren't in any way, shape or form a "sure bet" over the long run. Nothing is.

 

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I hear this all the time, stocks are better investments than precious metals. But, past performance isn't any indication of future performance. I'm sure the people toteing stocks as THE GREAT INVESTMENT, probably started in the 80's, when Reaganomics started (a whole nother topic I'd rather not get into). Then these same investors lived through a rising market in the 80's, and 90's, and two huge bubbles (the .com bubble, and the housing bubble). I'm sure if people were smart and got out of the markets just before they crashed, there was probably a lot of money to be made on top of all the money they made from the rising market of the 80's and 90's.

But, times are changing. There is more wealth concentrated in the top 1% of American society, then this is in the bottom 90%. These are unprecidented times. And as someone younger, say a newly college graduate, the stock market just looks scary. With all the money being printed (Q.E.ing), what other bubbles are being fueled as I type this.

One thing is certain, the money being printed for Q.E 2 isn't staying in America and fueling American businesses. Banks and corporations are already sitting on a mountain of cash. And what do they intend to do with all this money, raise dividend and buy back stock. That isn't helping our economy in any way, shape, or form. When the money from Q.E 2 gets released, banks will get it for .25% and then invest it in emerging markets like China, India, and Brazil which are offering a much better interest rate than anything you can find in America. Its like borrowing money for free and getting a guaranteed return.......which one of us wouldnt' jump at an opportunity to do just that.

But, soon the music will stop playing and then either the interest rates of these emerging markets will fall, or the interest in America will improve. Either way, all this money that was being priinted will find its way back to the U.S. and this can only mean one thing......inflation. As a matter of fact, the Fed is driving this event as they complain about too little inflation, like that's a bad thing. People, we don't have deflation, we have decreased inflation.....and with so many people out of work, I can't figure why higher prices would be good for anybody.

So, with inflation all but certain, and too much money concentrated in the top 1% chasing poor investment, the next bubble is just around the corner and hard assest will prevail in an inflationary environment. Buy gold, buy silver, leave stocks to the hedge funders holding worthless paper when the music stops.

P.S. Since precious metals investing is known to be a long term investment, when do you suggest people start, in their late 50's? Wouldnt' something that is a buy once and hold until the price is right make more sense the earlier you do it? This way it give you decades to find an agreeable price. Even if the price dropped to half of what it is today, if you are 30, you have about 40 years to find another time to sell. Unlike Woolworths, like the poster above had mentioned.

 

I think they want big inflation.
Actions speak louder then words and from what I see that is their only action.
If you have lots of debt that you can't pay and need to pay interest on it then just make huge inflation. Print all the cash you want inflate it then pay off your debts with the worthless paper you just made.
And if that's their idea then I just hope when they are done playing with our currency that they make it backed by something and balance our spending so as not to get back into this. But I doubt that will happen as we didn't learn it after we went off of the silver standard, gold standard, national bank notes, the depression, the failed colonial notes...ect.
Is sure seems history is bound to repeat itself for sure.

For beginners...buy bullion, buy mutual funds, buy tangible assets if you think large inflation is coming. Just don't sit there with cash if inflation is your thoughts of the future.

 

When Tim Giethner say he wants a strong dollar bill, I believe him. All this money being printed isn't going into U.S. society nor businesses. It's being invested in emerging markets. All this money is being priinted to short circuit the Chinese economy by pumping billions of dollar bills into their markets as punishment for not allowing the Yuan to rise. If the Yuan did rise, it would be the same as the dollar bill falling. But all this money printing is making me nervous, because inflation need velocity of money in order to take hold.

So, in the U.S. we don't have more money as this money is going into emerging markets. But the emerging markets aren't allowing this money to move either. The Chinese aren't dumb. They are raising the banks reserve rate, which basically makes banks have to put more money aside. They are purposely slowing down the velocity of money. This can't last forever! The Treasure secretary want the Chinese market to short circuit, forcing the yuan to rise, as opposed to inflating the U.S. money supply. Either way, the results are the same.......less Yuan per dollar bill our outstanding debt becomes easier to repay.