Investments

[DJ FC]

Some Nubblites have started to have some investments. Until this year I had virtually none. What sort of stuff are you guys putting extra money into?

Here's how mine look, I believe it's probably too conservative:

A good chunk of my investments are in ETFs which allow you instant diversification via a a single exchange-traded security. For everything that is exchange-traded I have included the ticker symbol. I have investments in GBP, EUR, and USD. I also own a Chinese ETF and Gazprom ADRs (an ADR is practically the same as the stock itself) which get me Yuan and Ruble exposure as well.


1) GBP Cash (Savings acct): 27.82%
2) GBP Inflation Linked Gilt (UK Gov. Bond) ETF - INXG: 10.51%
3) USD Gold ETF - GLD: 9.16%
4) GBP FTSE 100 ETF - ISF: 8.00%
5) USD Inflation Linked Bond (US Gov) ETF - TIP: 6.39%
6) USD Personal Loans & Investing with Peer Lending - Lending Club : 6.10%
7) USD Russell 2000 Index ETF - IWM: 4.36%
8) EUR Eurostoxx 50 Index ETF - MSE: 3.97%
9) USD Ultra Real Estate Index ETF - URE: 3.78%
10) GBP MSCI World Index ETF - IWRD: 2.90%
11) EUR MSCI Greece Index ETF - GRE: 1.71%
12) USD SPDR S&P 500 Index ETF - SPY: 1.46%
13) USD Google - GOOG: 1.34%
14) USD Nasdaq Index ETF - QQQQ: 1.21%
15) USD Oil and Gas Exploration ETF - XOP: 1.20%
16) USD MSCI Emerging Markets Index ETF - EEM: 1.17%
17) USD Gold Miners Index ETF - GDX: 1.14%
18) EUR Gazprom ADR - GAZA: 1.03%
19) USD Goldman Sachs - GS: 0.98%
20) GBP HSBC - HSBA: 0.97%
21) USD Energy Select Sector ETF - XLE: 0.90%
22) GBP China 25 Index ETF - 0.90%
23) USD Exxon Mobile - XOM: 0.83%
24) EUR CAC 40 Index ETF - LVC: 0.79%
25) EUR DAX 30 Index ETF - DBXD: 0.71%
26) Boston Scientific - BSX: 0.67%

Investments by currency:

British Pound: 51.10%
US Dollar: 40.68%
Euro: 8.20%


And a short position:

27) GBP British Airways - BAY: -17.43% (Because of Iceland)


What do you gurus think? I think I'm probably far too conservative.

[Mr. Mistoffelees]

Halp, I don't know anything about investing. Eventually I'd like to know enough just to be able to copy you, and invest in something other than a retirement fund given there's no guarantee I'll be alive 40 years from now.

All I have is my Roth 401k which Fidelity takes care of. I basically just picked random mutual funds.

I'm a baller, I made 25 dollars this year. What is a NAV?

[Der Fuhrer]

Yeah you're fucked faggot. Might as well kill yourself now.

[Mr. Blonde]

I'm glad this thread started up, i've been doing some reading and planning on dropping about $500 (which i'm pretty sure is the minimum requirement anyway) on Etrade and just picking some random mutual funds as Mistoffolees did. If anybody has any tips, much appreciated.

[DJ FC]

If you haven't noticed the theme of my investments it is inflation.

I'd invest in an energy mutual fund or etf.

[Ugly Bastard]

Most mutual funds have high fees and therefore suck. Just put your money in an ETF. There's really no point trying to buy or valuate stocks unless you've got enough money to make the transactional fees negligible.

[Der Fuhrer]

Yeah I was going to say the same thing. You will get more bang for your buck with ETFs. Honestly, with $500 bucks you might as well just go to the bank and put it in the money market. Get a CD or something.

edit: I know you're in SK, but I'm sure you can do that over the internet.

[Mr. Blonde]

What kind of chunk of change would actually be worth doing online investing with?

[Ugly Bastard]

You can invest $500 in an ETF but with a $10 trading fee you're already working out of a 2% hole. In other words, the ETF needs to beat, say, a savings account or CD by 2% in order to be worth it, which it may or may not do. Basically, and don't take this personally, if you don't have at least several thousand dollars, there's no reason you should really bother with spending energy on investing.

[Mr. Blonde]

YOU MOTHERFUCKER WHAT ARE YOU TRYING TO SAY THAT I'M POOR!?!!


kidding, obv. good advice. i'll probably just look into a CD for now to get at least SOME savings going and just stick to reading up/researching the stock market in the meantime. Probably wiser anyways, as i'm pretty much a financial noob.

[Der Fuhrer]

I would take that $500 and find the highest quality Asian whore you can get, and use that on her.

[DJ FC]

It depends on how long you plan on holding your investment, $500 in the S&P 500 ETF (SPY), even with a $10 fee, can still be worth it if you're planning on holding it for 2 years or more.

[DJ FC]

Also, if you qualify for a Roth IRA I would advise that you open your account as one. There are tax advantages:

Roth IRA - Wikipedia, the free encyclopedia

[Ugly Bastard]

Originally Posted by DJ FC

Also, if you qualify for a Roth IRA I would advise that you open your account as one. There are tax advantages:

Roth IRA - Wikipedia, the free encyclopedia

I had just typed out this same post but deleted it since, with an IRA, you can't touch the money until you retire and I suspect this money that Blonde is investing isn't "put it away and don't think about it for 40 years" type of money.

[DDTempest]

Originally Posted by Ugly Bastard

I had just typed out this same post but deleted it since, with an IRA, you can't touch the money until you retire and I suspect this money that Blonde is investing isn't "put it away and don't think about it for 40 years" type of money.

With a roth IRA can't you take out the principle before retiring but not the interest?

[f3lix]

Guys, there are fews ways to win these days. I mean this in all honesty. Do NOT tie up your money in some 2% shithole. Not a CD. Why? Because you are LOSING money to inflation tax. Inflation tax is hitting at a MINIMUM 4% per year and upwards to 9% per year. Meaning, if you invest in a 2% paying CD or whatever, your money is worth less coming out than when it went in.

For this reason alone, I've cashed all my savings bonds (I get taxed on the interest, anyway) and am investing in stronger items like gold (which doesn't inflate.)

Blonde, your $500 is worth far more now than it will be in two years. Spend it. You'll get it back quite quickly (like... one week of work...)

[Ugly Bastard]

I think there are a few things wrong with your argument, f3lix.

First, I have no idea where you see there being a "minimum" of 4% inflation and as much as 9%. The highest inflation we've had in the past decade has been 5.6%, and since Obama took office inflation has come to a standstill. We actually experienced some small deflation in his first year in office.

Moving forward, I think more deflation is quite likely. In a deflationary scenario, a 2% savings account is a perfectly strong investment. Look at the inflation rates in Japan in the past decade. They have experienced a considerable amount of deflation, and there are a lot of things about our current economic situation that parallel theirs from years ago (massive government spending, increasing taxes, a housing bubble, huge education and health care spending relative to GDP, etc).

The only way we're going to see strong inflation is if the Federal Reserve prints a lot of money to help us with our ballooning debt. I think it's unwise to assume they will do this. They're not just going to flush our currency down the toilet like that. I'm sure Nancy Pelosi would want them to, but they're just not that stupid.

[DDTempest]

Originally Posted by f3lix

Guys, there are fews ways to win these days. I mean this in all honesty. Do NOT tie up your money in some 2% shithole. Not a CD. Why? Because you are LOSING money to inflation tax. Inflation tax is hitting at a MINIMUM 4% per year and upwards to 9% per year. Meaning, if you invest in a 2% paying CD or whatever, your money is worth less coming out than when it went in.

For this reason alone, I've cashed all my savings bonds (I get taxed on the interest, anyway) and am investing in stronger items like gold (which doesn't inflate.)

Blonde, your $500 is worth far more now than it will be in two years. Spend it. You'll get it back quite quickly (like... one week of work...)

Regardless of the rate of inflation, $500 in a CD is 2% better than $500 in a checking / savings account drawing nothing.

[f3lix]

Since the 1940's, the average yearly inflation has been 4.11%.

On top of that, let's be realistic. With the multi-trillion dollar bills being passed in the last year and tax credits being given out like candy, where do you think all that money will come from?

Oh yeah... the federal reserve. What's new?

DDT, please spare us the small minded chat of a checking/savings account be the only answer to places to put your money. CDs lock up your funds and with Blonde in Korea, I really don't find it wise for him to be locking up money for two years. He's not in a stable situation there. If he moves home, gets a permanent job or whatever, then we can talk about locking up money. In the meantime, why would you lock up $500 to have it turn into ~$525 in two years, when in reality, it will only be worth about $480. Use it while you can, Blonde.

[Ugly Bastard]

I think the whole inflation or deflation argument is an interesting and important one. Important enough to have its own thread probably, but I don't see why we can't just hijack this one. Clearly FC thinks we're primed for inflation which might make me the only person on here who doesn't agree.

[Der Fuhrer]

I am not really sure where I stand on the inflation subject. Central banks have gotten very good at targeting inflation over the past decades, hence the term inflation targeting central banks. Even with Obama's out of control debt spending, I don't think fears of inflation should materialize. I could easily see us maintaining a steady 2% inflation rate. Even if the fed has to print money to cover the massive debt, the fed can just lower the domestic money supply through selling bonds, raising reserve ratios, higher fed funds rate, etc... If the money supply is significantly lowered, interest rates will skyrocket, making bonds a very attractive investment.

However if the fed prints a whole lot of money, obviously these methods probably won't be enough, and we might very well have some inflation. Even still (although I'm not 100% sure on this) if the ex ante inflation rate is higher than ex post, that gives bonds a greater sloping yield curve, which again makes bonds a good investment.

So whether or not there is inflation, bonds are definitely a good bet, in my opinion.

[f3lix]

Bonds double in value over 20 years. Inflation is more than double in over 20 years. Bad investment.

[DJ FC]

F3lix where did you get this 4-9% number? Banks on Wall St. are willing to trade inflation linked swaps for far lower rates of sustained inflation than this.

You seem to think that the Fed is the only person creating money. Any bank who makes a loan creates money.

Most economists think inflation is not a concern right now because of how much slack there is in the economy. We have excess capacity and therefore prices cannot go higher.

My oppinion is only my oppinion, the smart ones in finance are saying deflation is also a genuine concern.

[Der Fuhrer]

Who gets a bond a holds it for 20 years? Buy when the interest rates goes up, and sell them when they go down. It's your basic, fundamental buy low sell high shit. I've been thinking about this more, and if the money supply actually increases due to excessive printing by the fed, the price of bonds could actually rise, which probably wouldn't make it a good time to invest in them. Unless of course you went out there very soon and bought some. I guess it really depends on what you think is going to happen in the money supply. I am by no means an expert, more of a novice or amature. Although I have studied monetary policy.

DJ FC, since you are in the industry everyday making the plays, I am always very interested to hear your thoughts. Keep 'em comin.

[DDTempest]

Originally Posted by f3lix

DDT, please spare us the small minded chat of a checking/savings account be the only answer to places to put your money. CDs lock up your funds and with Blonde in Korea, I really don't find it wise for him to be locking up money for two years. He's not in a stable situation there. If he moves home, gets a permanent job or whatever, then we can talk about locking up money. In the meantime, why would you lock up $500 to have it turn into ~$525 in two years, when in reality, it will only be worth about $480. Use it while you can, Blonde.

Sorry for the small-minded chat about the large-minded lump of 500 fucking dollars.