In the last few months Investments have been on a roller coaster and no body is very safe. Energy companies, gold and silver ETFs, stocks, and even the U.S. dollar are having uncertain times right now. The only thing the average investing American wants to know is how to earn over inflation for the next few years, and the answer is hard to give.
There is no sure investment alone, stocks will not save you if you only invest in stocks. Even if you were to diversify within your stocks you would be heading for a headache. The average investor needs diversification- but real diversification in many different forms of investments such as gold and silver, stocks, bonds, and cash. The first question is what form of gold or silver should you invest in?
Gold and Silver Investments
When investing in a precious metal you have the option of investing in them by way of stocks which can be farther broken down into ETFs and mutual funds or physical bullion. I would advise a well rounded investor to take part in both forms of gold investing but to have physical bullion a little higher on the list of investments. Physical bullion needs a good percentage of your investments and mutual funds and ETFs in precious metals a percentage of your stock investments.
The reason that physical gold and silver should be a percentage of your portfolio in the same sense as stocks, bonds, and cash is simply because it is strong enough to do so. There are times when having gold and silver will raise your portfolio and times where it will lower it. But it will always be the counter part to stocks, if stocks are doing poorly then gold and silver will be on the rise, and if stocks are doing well then gold and silver could be going down in price. The only other problem you will face is where to store your gold or silver, a safe place such as a bank that is insured or if you are a little worried a StorageMart perhaps.
Stocks
Investing in stocks is what most people think about when they think of investing, but is it the best plan? Stocks alone would not benefit many investors, some do make money at it and in large amounts but more people tend to lose money when investing in stocks. That is why the plan to have stocks only as a percentage of your investments would make the most sense.
There are so many things that you can invest in by way of stocks such as technology companies, energy, agriculture, and even real estate. You can choose to hold stocks that are priced alone on share worth or also in stocks that pay you a dividend. There are so many options to choose from when investing in stocks, but some of the more stable companies would be dividend paying companies and utility companies. The reason is that in order to pay dividends back to investors a company typically has to be making money, and everybody needs utilities thus the reason for investing in them.
When most investors look at stocks they want one of two things, a stable stock to produce money for them over a long period of time, or a stock that is about to take off, make them a lot of money and then they can pull out and sale before it goes down. The latter plan is much more risky but in the short term can be very rewarding if you know what your doing and have a little luck. For a diversified portfolio seeking to beat inflation each year and hold your retirement savings the first would be less risky.
Investments To Avoid
Avoid bubbles would be a catch all phrase that would do you no good to hear, because how do you always know if something is going to be a bubble or not? Sometimes investments that have been around forever can get into a bubble and when it pops it is a mess, many people think silver and gold may be in a bubble right now? The point is I can not tell you what is or is not a bubble but you can do your homework on a company before investing and use common sense. Investing in bubbles is not always a bad thing, many people make money from investing in bubbles and then selling their stocks before the pop.
But this is not an exact science that all people go by and that is why more people will tend to get burned when trying to follow this strategy. Most people would be better off placing all their cash in a Toronto self storage and losing some money to inflation rather than on a trendy investment. Always look into an investment before putting your money into and if you feel you need the help of a professional then seek it, but there is no investment that you can not figure out on your own.