Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A $10,000 investment: your returns with gold and stocks
Had you invested $10,000 in gold bullion in 1999, your initial investment would have grown to $33,754 by 12/31/08 – an amazing 237.54% percent increase.
That same $10,000 investment in stocks of the S & P index would have lost $3,987. That’s a 39.87% loss.
Please explain how gold is not an investment, even with the OP's time horizon he will still make some gains in gold. The fundamentals have not changed.
Because gold prices in 1999 were around $200-300 and ounce, now they are around $1000/ounce and there are no guarantees they will go higher and they could drop to a LOT lower.
OP, park the money in a ING money market account or another high interest money market account. One year time horizon isn't much time to realize gains on pretty much any investment unless you time the market perfectly. Now, hindsight had you parked that money into the market in mid-March you would have realized a huge upswing, especially if you put in into some of the international funds or emerging market fund that are up about 70% this year (but they also took a 70% hit last year).
If you want SOME market risk, maybe a 20/80 stock/bond "C" share mutual fund??? You are still putting your principal at risk in something like this and your $20K could be $5k or worse next year. I would go with the money market savings account, especially if interest rates do go up. I don't think individual bonds are a good idea right now--bond FUND are ok, but not a CD. Just my 2 cents.
Don't forget, its not about how much money you make, its about how much money you get to keep. 1.24% ING savings you make $10 and if your in the 25% tax bracket you keep 7.50.
Investing for 1 year is not even worth investing BTW.
But when you do realize you have to invest, don't invest in index funds EVER. The gold guy bashing stocks is a fool. You would sit on gold not doing anything for 50 years until it blew up the last 10 years. He compared it to the S&P index. Would you have bought GM last year when it was tanking? Probably not, but if you were invested in an index fund you did, and you held it to the death.
Golf Gal is right. A "C" fund would be better than a CD, but you need 2 hold it over a year or else taxes will hurt you bad.
I wouldn't invest for just a year, put if I did I'd buy a piece of either a discounted mortgage or discounted auto-notes. The returns are good, the investment is secure and you can buy just enough payments from different notes to cash out in 12 months.
If any of us had any clue what the next year will bring, none of us would be posting here and none of us would have to work ;-)
One thing that I learned in investing - the hard way - is you NEVER invest money you think you will need. OK, you "need" all of it, but I mean hardcore "I will absolutely need this money for <insert something>" like your situation requires significant capital conservatism.
That's code for "don't invest it." Instead, invest in short-term US government debt, CDs, or other GICs. These are guaranteed vehicles to grow money and all smart investors have some squirreled away. I'm 28, and in my 401(k) I have 15% GICs offered by my employer, and the rest targeted funds of moderate to high risk.
Of course, if you really want to risk it:
1) Energy and oil. And buy individual companies. People aren't stopping driving, especially the Chinese and Indians.
2) Pharmaceuticals. People aren't stopping getting sick and they aren't stopping buying drugs.
3) This is just my personal opinion based on history and tea leaf reading and chicken bone throwing, open to blasting for sure, Ford.
I absolutely agree with you.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
