I'm sure some of you know much more about the market than I do, I know we are in a "recession."
I am 23, and have roughly $10k to invest.
Since the market has a history of 100% positive return over periods of 10 years.
Since stocks are at the lowest point in our recent history is it a good time to buy for the long haul? If I invest $10k into the market at this rock bottom, wont I be gambling on huge returns over the long run?
I know all stocks are gambles but I'm looking for some like minded good general advice.
Sice you are young, and I assume, willing to take the risk, the stock market has historically provided about 10% annual return. I don't know if we are at the true bottom of the market plunge yet, but if you are risk tolerant it might not be a bad idea.
You can check websites like Morningstar for mutual fund recommendations (go for no-load, no-fee funds), or buy stocks directly.
If you are not sure which stocks to buy, think about what people still need in this economy and look at that sector. For example, McDonalds stock is actually up for the year. Energy stocks, food stocks, etc.
That said, please keep in mind that I am not a broker (I am just more broke from all the losses this year), and this is not official financial advice, but just friendly suggestions. I'm sure other people will weigh in too!
I say invest into stocks but I suppose I should elaborate, I pulled all my cash in my 401K the day before the huge crash on a hunch, and placed it into Money Markets and Bonds........I didnt get hit with the 700 point loss........
But now I am thinking if I get in now while stocks are incredibly low and just ride it out, I think I could see huge returns in the next 10-12 years.........
I have read about people who could actually afford to invest during the great depression made fortunes......
That being said I only have about 12 funds to choose from to invest in, mostly consisting of an American low, mid, and agressive fund. a European low, mid, agressive fund, and an asian market low, mid, and agressive fund, with one or two other funds spread in there.
So I was wondering if it would be a good time to buy into those funds while they are low.
Thanks so far.
It's always good to buy low and sell high. But if anybody knows where the bottom of this market is, I'm ready to put in also.
My "educated" guess, from having been in the market for at least 40 years, is that we may be bottoming out around 8000 on the DOW. Asia tanked this morning, and I think we're in for another rough day, but as I mentioned before, if you're young and can tolerate the risk, it might be a good time to jump in.
I would also stay with the large companies you know won't go out of business, fast food, Wal-Mart, etc.
One of the greatest movie lines of all time to me was in Trading Places: "Every time we buy something expecting the price to go up, someone else is selling expecting the price to go down". I doubt that is the exact quote but close enough for you to get the general idea. :slap:
The largest gambling casino in the world is teh Chicage Board of Trade with Wall Street second. :ticking:
I think it is buying time. However, don't be surprised if the market will go down another 50%. Stick to either a wide spread fund or some solid companies. Avoid car makers at this time as next year, some of them may no longer be around.
buying a house may also be a good thing if you have solid credit or cash, but $10k isn't probably going to quite make it. i hear you can still get a mortgage, but you have to do odd things like actually proof that you are alive and have an income (either was optional during the sub-prime times).
Remember the late 1980's when Japan's economy cratered? Many properties took an ~80% dip in values, among other things. Where's the bottom? Who's to say, only a few months into this slide.
I, too, have been in "cash" for some time, but am eagerly (though cautiously) awaiting the turn. We'll see.
Warren Buffet coughed up a $3B ante for GE, though it was preferred stock. Meaning, if it tanks, he gets his first, before you.
Rumor has it that the entwined instruments that Lehman Bros. had worked out to $9T in "interest rate swaps," among other things. Even with GE, given its financial end of the business, there's no telling quite how unraveled things might get, before everything is straightened out. The financial instruments have been packaged and re-packaged until they bear no resemblance to anything normal. Makes it tougher to see the value. Caution.
One of the problems with the market now is people are jumping ship, so to speak, and taking their money out. That will do as much damage to the financial strain we are currently seeing. To boost our economy we need to be putting more back in to it, I myself am looking around for places to invest. Stocks are on sale right now, you just gotta be smart about it and not listen to knuckleheads like Kramer.
This is not a time to get rich quick, it will possibly take a decade+ for the return to be realized. Which given your age should not be a problem. Just be sure that you have an emergency fund of at least 3 months in liquid assets, gold for example would be good to have on hand if you can get some that is verifiable. That would allow you to barter if SHTF since the dollar would be worth the same as toilet paper.
Again, this is friendly advice. I used to work for a financial adviser but was not in a capacity to make recommendations.
Two misconceptions and pieces of information up there in your post.
Originally Posted by JCook5003
1) Stocks are NOT at the lowest point in our recent history. They went down into the 700s (S&P Index) during the first Bush recession early on in his first term.
2) Ten year returns are not 100% In fact, the market is well below where it was 10 years ago; even perhaps with 15 years ago.
With those two out of the way, at your age (and anyone really who has spare cash) this is a good time to start buying into the depressed market. Just be sure you don't need the money for at least a decade. Buy in 2 K per month over the next 5 months in case it keeps going lower. Or buy in 1 K per month over a year.
You cost average and protect yourself a little if it continues south. However, I think it will stop going south any day now, and start going north after the new year. So, YES____Now is a good time to buy into a very depressed market.
(It can't really go too much lower having lost 40% in a year. Any more losses and the game is over for us all. We'll be back to 1933.) So, if you believe as I do that we are not headed for that kind of calamity, yes, invest (gamble) your spare cash now.
I say pick either stocks or real estate, and take 5k of that 10k and put in your education for it. You will be much better off, for the knowledge will last you a lifetime.
Johnson and Johnson
Originally Posted by JonInNY
Liquor Compines ( people drink good times/bad times)
Look at the products that you buy everyday. Things will go down and will come back,It is and will always be a circle.
Buying a home is a great investment and get a tax savings. As other people pointed out it wil be rocky for some time but I started to invest at a young age too and have seen the ups and downs. Lately down,down and down.
Buy at least some quantity of actual Gold metal.
It's portable and the worse things get - the more it will always be valued.
The "daily spot" price may rise or fall but, it will always be Gold and always have real worth.
Where could I actually buy hard gold? Obviously jewelry wouldnt be suitable since you are paying for the workmanship, coins perhaps, then again you pay a collectable value for those? Where could you just buy stock gold for market prices?
Thanks for the advice so far guys.......
My family and I live on an inherited 70 acre farm with my home and a farmhouse on it, buying real estate given my current situation isnt really feasible.....
Keep it coming.
No...don't buy jewelery as investment Gold.
Buy either American Eagles or Canadian Maple Leafs.
I bought mine locally and years ago for the Daily Spot + Shipping but, I knew the person that ordered it for me and I did not have to pay anything up front or until I actually had the Gold in hand.
I would say to look at Silver as well mostly 1 oz coins but also a few 10 oz bars
Look at GoldSilver.com
Buy Silver Bullion Bars & Coins | Safe & Secure Online Ordering 24/7