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Originator:	mac	Printable Version
Title:	where are your investments?

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From: mac	On: 2007/03/09 14:16:48
when i was born, the Dow Jones Industrial Average was around 600. 22 years later, it was around 1,000. it's now 22 years after that. on a reasonable regression curve, one might expect it to be around 2,500 to 3000. so why is it over 12,000? is this really a good indicator of the economy? from 1984 through 1994, i worked in an iron foundry. two years ago, it finally closed, killed off by competition from China. so i'm feeling very guilty about investing the entirity of my retirement fund from that decade in ..... a China mutual fund. gotta bet on the winning horse, i guess. i'm having trouble (more than most days) looking in the mirror. Baldrick likes the currencies. where do you hide your money?

From: Analog_Kid	On: 2007/03/09 16:17:43
My money is safely tucked away in my creditors' bank accounts.

From: JOK	On: 2007/03/09 19:08:54
If the stock market made sense, it wouldn't work.

From: coral47	On: 2007/03/09 22:30:19
The Utilities and the Landlord take care of mine.

From: mac	On: 2007/03/10 08:41:24
yea, i'm paycheck-to-paycheck too, but i can't touch this retirement account until i'm 65 or 70 (when i won't have a paycheck). if i pay attention, i can play the game somewhat and get a better return for my elderly poverty. i have some leaway how i invest it, so i'm starting to look around at more aggresive instruments. i've been in mutual funds for a while, so i did another one of those. at the end of the tech bubble, i parlayed $5,000 into $2,000 in stocks. that's when i found out that a little bit of knowledge is a dangerous thing. i looked into why the asian funds did what they did last week, and found that there's an 'inconvenient truth' called "the amerikan debt level". i also learned that the various 'plunger groups' helped pull us out of last week's impending disaster by calling up all the big investment houses and instructing THEM to buy stocks. amerika put a 'plunger group' in place after the 1987 train wreck. apparently, the federal reserve decided that, if only SOMEONE had jumped in and bought stocks early on, then everyone would not have stampeeded toward the exits, and the blood bath could have been prevented. so here i go jumping in after the 9% asian correction, and then find out that this recovery was based on bogus investments. what happens when the big investment houses are allowed to SELL the stocks that the 'plunger group' forced them to buy? well, i think they call that the "2nd half of the W", which means another (or, the rest of the) correction. my elderly poverty depends largely on how well i do now, so if i'm going to get into stocks again, i'm going to have to learn the tricks and rules of the road. there's a "divergence" curve that's supposed to give a good signal, there's the actual volume of trading that clearly shows that this recovery was bogus, and there's 'strength relative to the market' and 'p/e ratio' that show a company's real strength. this is assuming they're not cooking the books. can i assume that i'm safe? i have a friend who lost $80,000 because of Enron's fraudulent "fundamentals". so i'm wondering if that's the only investment opportunity out there. i once heard a doctor say that the only investment he ever really did well in was his career. the brokers do well, using their clients' money to get rich, and that's their career. if i wander out into stocks (other than buying soap companies) i'm sure to fall for one of these "W" tricks and lose everything, like i did at the end of the tech bubble. so what do i do to keep the pittance in this account from getting trampled in the next stampeed, when even the plunger groups can't avoid the inevitable?

From: JOK	On: 2007/03/10 16:16:08
Try buying a computer with a shift key, ya cheep bastard.

From: Analog_Kid	On: 2007/03/10 17:51:54
It could happen to anyone - or any key This is truly a terrible F1 accident http://www.hemm...ges/funny/terriblef1accident.jpg

From: coral47	On: 2007/03/10 22:12:08
Yikes!

From: Baldrick	On: 2007/03/13 02:42:34
Hey, I'm relatively new to investment malarkey, so take anything I say with a pinch of salt (at least do your own research :-) ). Much of what I have learned about investment has been as a result of reading the Motley Fool ( http://www.fool.co.uk/investments/investments.aspx and http://www.fool.co.uk/lrninvnov.htm ). > is this really a good indicator of the economy? I don't think so. As described in Wikipedia at http://en.wikip...iki/Dow_Jones_Industrial_Average : "The DJIA is criticized for being a price-weighted average, which gives relatively higher-priced stocks more influence over the average than their lower-priced counterparts. For example, a $1 increase in a lower-priced stock can be negated by a $1 decrease in a much higher-priced stock, even though the first stock experienced a larger percentage change. Additionally, the inclusion of only 30 stocks in the average has brought on additional criticism of the average, as the DJIA is widely used as an indicator of overall market performance. Many critics of the DJIA recommend the float-adjusted market-value weighted S&P 500 or the Dow Jones Wilshire 5000, the latter of which includes all U.S. securities with readily available prices, as better indicators of the U.S. market." The actual figure (600? 1000? 3000? 12000?) is misleading (IMHO). Other metrices, such as the price to earnings ratio ( http://www.stockdr.com/basics/peratio.shtml ) - calculated by taking a company's share price and dividing this by its earnings per share - is (again IMHO) a more interesting metric of financial performance. I believe the DJIA is currently on an average P/E ratio of around the 15 mark, which is historically quite reasonable - suggesting that share prices are not currently overvalued... ( http://www.inve...es-djia-sale-pe-ratios-under-15/ ) Here's a couple of interesting take on the subject... http://www.iii....=Planning&catEnforce=YourStories http://business...iness/markets/article1495445.ece I wouldn't feel too guilty about investing in a China mutual fund. Chinese companies have American employees, too. Profits you make from it will ultimately be fed into the American economy. The majority of my investments are in low-cost index tracker funds (actually the Fidelity MoneyBuilder UK fund) which tracks the FTSE All-Share index. This has a total expense ratio of 0.3% (covering annual management charges etc.) making it one of the cheapest available (a benefit of index trackers). Come the new financial year I'll also be looking at exchange traded funds (ETFs) which appear to offer some interesting products; I wouldn't more exposure to some of the lucrative gains seen in China myself. I'm in this for the long-term, so I don't mind taking a bit more risk at this stage. And FWIW, I have decided to conciously shun the services of "independent" financial advisers. Caveat emptor and all that. I'll do my own research. I've heard just too many horror stories about IFAs hawking crap products to gullible customers in order to get maximum commission. Never ask a barber if you need a haircut... Oh, and BTW, the above is purely my opinion and should not be construed as financial advice or endorsement of any particular products!

From: JOK	On: 2007/03/13 04:04:54
So, "buy salt" is your recommendation?

From: Baldrick	On: 2007/03/13 04:58:00
In your case JOK, my recommendation would be to brush up on your Cantonese ;-)

From: JOK	On: 2007/03/13 06:16:48
My Cantonese master allays sayz "Blush Down!"

From: Baldrick	On: 2007/03/13 06:27:38
Then buy salt, by all means. And a pound of sand. Round it off by investing in an "ass hat" (whatever that is) <g>

From: Hooligan	On: 2007/03/13 07:28:53
the sixties and seventies were decades of low solar activity, and hence lower fiscal activity and a mini-financial ice age. In the 80s, 90s, 00s solar activity has increased leading to a misconception about CO2 and global warming, but also heating the financial markets and shining wealth and prosperity onto the fortunate. This is all according to a UK Channel 4 documentary

From: mac	On: 2007/03/13 11:53:52
buy salt? for resalinization for the North Atlantic when the Greenland Icesheets melt, stalling the "freight train"? not a bad idea. i (er, sorry JOK) I think I might just invest in some ocean side property in Utah.

From: Baldrick	On: 2007/03/14 02:17:17
I think the property markets in the US (and the UK, for that matter) are a no-go area. Way overpriced!

From: Paullkha	On: 2007/03/15 07:32:55
The train wreck is comming. Try to understand derivatives and hedge funds. Go on, read about them. How long has Japan had 0% int rate (central bank)? And their economy is going nowhere fast. Gold is up! Oil is up! Commodities are gowing up! Real estate will be coming down hard! Enjoy. p.s. 2009 is when the cracks will be clearly visible. So get your money out of money market accounts and stocks before then.

From: Analog_Kid	On: 2007/03/15 08:40:24
>>Real estate will be coming down hard! Agreed. Dont even think about investing in real estate for profit. Many many long time investors are bailing. On the other hand, if you still rent, get your credit in shape, save as much as you can for a deposit, keep an eye out for favorable rates, get a broker/agent, shop til you drop, and get out of that rental fast as you can.

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