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operasnob | Are there any long-term profits to be made off our bad economy? |
Additional Details
Net Advisor-
Thank you! How do I invest in Treasuries?
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Net Advisor
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There are two major ways to make money in a Bear Market.
Short term:
1. Short selling, put buying on major indexes and weaker, overpriced companies. If you have never done this or not an experienced trader, I would prob then just be in cash, CD's and US Treasuries. This has been my net overall strategy for the last 2 years.
Longer term (10-20+ years)
2. Dollar Cost Averaging on a bi-monthly basis in the S&P 500 Index.
http://en.wikipedia.org/wiki/Dollar_cost_averaging
http://en.wikipedia.org/wiki/S&P_500
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edit follow up:
You can buy Treasuries directly from the US government here:
http://www.treasurydirect.gov/
or from a broker.
I would not buy long term treasuries (over 1 years right now). The interest you will get will be next to nothing, that is because there had been a rush to safety ("flight to quality") over the last year where people were more interested in principle preservation than making money.
Inflation is currently next to zero, so right now that is not a big concern. Inflation is likely to be a major concern in the future.
I typically roll Treasuries over every 2-4 months. That is my time frame on these.
You might look at 5-10 year Treasury Inflation-Protected Securities (TIPS).
http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm
I don't know your overall situation or goals so I really can't advise one way or the other. But for high safety, this has been a good place. Keep in mind that things that are safe don't make one wealthy long term.
Good Luck! |
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Joseph P
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You would be a fool to invest in Treasuries!
Who gave you this information?? Treasuries are a secure way of locking your money up at low interest rates. If you're looking for something pays a higher yield and could have capital appreciation invest in corporate bonds. These almost always yield higher than treasuries and if you hold them till maturity you have the potential to make a capital gain (if you purchase the bond below par value).
Do not listen to anyone telling you to invest in Treasuries, although this is a safe place to save money it is not nearly the most efficient. There are plenty of financially secure companies with outstanding bonds.
Also, there are still strong companies with stocks that pay dividends, look into these companies to diversify your account. I suggest Penn West Energy Trust and Baytex Energy Trust. Both are Oil trusts based out of Canada. They are at their 52 week lows and pay excellent dividends which are safe. Even better is that the dividend is paid monthly. Only invest in these however if you don't mind the risk, afterall they are oil trusts and thus have exposure to crude oil prices. |
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Douglas L
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But shares in good solid companies at low prices. |
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D
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There are genuine cheap stocks out there with unfairly low valuations. Strong companies will optimize their cash and buy hurting companies on pennies on the dollar and when consumer confidence picks up and people start spending money again these corporations will see amplified returns.
It will take a while (I do not know how long a while is) but since the financial sector has been shaken up so much any surviving banks/brokerages/wealth management firms will see even greater profits and returns due to less competition and much stronger balance sheets.
However a non-monetary benefit from a recession is education which is just as important as profits. There were and are a lot of lessons given/forced upon investors these past 1.5 years. Hedge yourself with >= 6 months of living expenses in savings (FDIC of NCUA insured is preferable) against rising unemployment.
My $0.02 |
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itsjunglepat
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Short term I enjoy shorting, though sometimes I think some things are doing a "V" shaped recovery behind my back.
You could be one of those smug value/cost-averaging investors now, but there's a chance that things will drop even further to a point that is past your comfort level. I'm wondering if even Warren Buffet has his quiet motives for those buybacks he's thinking about.
Personally, I prefer to wait until the nuclear fallout has subsided, but I've never been a great long-term investor. |
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brad
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Our bad economy brought a very valuable commodity way down. I would invest in oil. Uso. I think you can see an easy 10 gain before summer time. |
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Space Invader101
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IBM shares: http://www.reuters.com/article/ousiv/idUSTRE50J7HQ20090121 |
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