Question regarding economics

[Trusting Jesus]

Great discussion! Is there any guide that you know of that a person could find online or elsewhere that would give the company beliefs? I would not want to use my money to support a pro-homosexual, pro-abortion, anti-Christian company. That's what really had me worried when I had some money in mutual funds. I didn't really know what companies my money was supporting.

Logic tells me that at some point the market will begin to rise again. If I invest $1,000 to buy stocks now when let's say the price per share is $20.00. If it goes down to $15.00 I've lost money, but if I leave it there for a year and it comes back up to $20.00 I really have lost nothing if I have left it there. But if it continues to rise and in the following year it rises to $25.00 a share then I will have gained money. At least on paper.

I really am just trying to understand all of this. Also, do you think that buying stocks is gambling?

<>< ><>

Nathele

[WayneB]

Also, do you think that buying stocks is gambling?

No more than "investing" in an education and expecting a good return could be considered gambling.

My #1 key to investment is diversification. I invest in solid equities, high-yield bonds, low-risk mutual funds and gold as a hedge investment. The more diversified your investments are, the better protected you are. By the way, I give George Whitten credit for pushing me to buy gold...back when it was $600 an ounce.

My #2 key is patience. Folks who play too much with their investments tend to lose big. Don't be greedy and don't be faint hearted. You have to hang in there and let your investment strategy work...especially if you are a novice like me.

The stock market has lost 41% of its value this year, I think, and my portfolio is down about 16% give or take a few points...so my strategy seems to work.

BUT I also believe what Donald Trump once said is good advice... YOUR home is your best and most important investment. In my humble opinion, if you do not own your own home and you are working with limited funds, buy a house before you invest in the market or gold. I don't mean 100% but buy a house with a mortage that you can easily afford with a fixed rate and a payment that doesn't exceed 25% of your take home.

That's just my opinion.

Hope it helps,

wayne...a friend of John "the expert on everything and my old friend" Whalen

[Ovedya]

Imagine investing now while prices are nice and low, and then a few years from now selling off that stock after the market has rebounded.

Now imagine Obama as President when you want to sell that stock.

You will be paying the highest taxes on your dividends in U.S. history under an Obama Presidency.

I think that a lot of investors are aware of that, which is a reason why the market is so unstable right now.

[jmwhalen]

Also, do you think that buying stocks is gambling?

No more than "investing" in an education and expecting a good return could be considered gambling.

My #1 key to investment is diversification. I invest in solid equities, high-yield bonds, low-risk mutual funds and gold as a hedge investment. The more diversified your investments are, the better protected you are. By the way, I give George Whitten credit for pushing me to buy gold...back when it was $600 an ounce.

My #2 key is patience. Folks who play too much with their investments tend to lose big. Don't be greedy and don't be faint hearted. You have to hang in there and let your investment strategy work...especially if you are a novice like me.

The stock market has lost 41% of its value this year, I think, and my portfolio is down about 16% give or take a few points...so my strategy seems to work.

BUT I also believe what Donald Trump once said is good advice... YOUR home is your best and most important investment. In my humble opinion, if you do not own your own home and you are working with limited funds, buy a house before you invest in the market or gold. I don't mean 100% but buy a house with a mortage that you can easily afford with a fixed rate and a payment that doesn't exceed 25% of your take home.

That's just my opinion.

Hope it helps,

wayne...a friend of John "the expert on everything and my old friend" Whalen

____

Sound advice from "Looking good, Billy Ray Wayne(revised)"

"Feelin' good, Lewis Whalen(revised)"

Although I am not an "expert", Iv'e been in the financial services industry for 24 years. Perhaps the following additional "tips"(besides "buy low/sell high"!) to Wayne's would be helpful:

1. Consider: Do you go to the store when they raise prices, or when there is a sale?

2. Make investment decisions based on your situation, considering your goals, your objectives, your time frame, and your risk tolerance, not "the market's".

3. Greed and fear drive prices short term; fundamentals drive it long term(and long term is not buying after breakfast, and selling after lunch).

4. Do not "fall in love" with any investment

5. Regardless of the merits of an investment, do not own it if you are "loosing sleep" over it, i.e., "peace of mind."

6. Usually, the best time to invest is when you feel "uneasy" about, i.e., and this is typically when there are many "scary" headlines in the press, prices are low(relatively), which is the case now in the fall of 2008. Usually The worse time to invest is when most are optimistic-prices are relatively high. That is, the worst time to invest is usually when you feel "comfortable", because this is the time when most others are "comfortable", and prices have been "bid" up to reflect that optimism.

7. Don't "buy headlines"- remember that "bad news" sells. Try to avoid "reacting" to what some "investment guru" said on TV. That is, anticipate, don't react.

8. Know what you own, and why you own an it. If it goes down, and "the story" has not changed, consider the drop a a gift, and consider owning more.

9. Dollar cost average-you do not need an MBA for this.

10. Do not buy any stock, private and/or public, associated with Auburn University. It is overvalued and due for a "crash"(kidding, here! Ask Wayne if he concurs)

In and with Christ,

In the Lord

John "buy the Missouri Tigers-it is going up" Whalen

[jmwhalen]

Great discussion! Is there any guide that you know of that a person could find online or elsewhere that would give the company beliefs? I would not want to use my money to support a pro-homosexual, pro-abortion, anti-Christian company. That's what really had me worried when I had some money in mutual funds. I didn't really know what companies my money was supporting.

Logic tells me that at some point the market will begin to rise again. If I invest $1,000 to buy stocks now when let's say the price per share is $20.00. If it goes down to $15.00 I've lost money, but if I leave it there for a year and it comes back up to $20.00 I really have lost nothing if I have left it there. But if it continues to rise and in the following year it rises to $25.00 a share then I will have gained money. At least on paper.

I really am just trying to understand all of this. Also, do you think that buying stocks is gambling?

<>< ><>

Nathele

___________________

"do you think that buying stocks is gambling?"

I suggest you look at the chart of the Dow Jones Industrial Average, starting in the early 1920's, and consider the depression also. You may be surprised. Or, if you would want more recent data, consider that the Dow was in the mid 750 range in August of 1982, and the 1200 range in 1984(when I started in the business). Perhaps this is "gambling", perhaps not. But ask yourself this question:

If you are earning 2% or so in an interest bearing account, and prices rise each year at a 3/4% rate, is this not gambling, i.e. inflation/purchasing power risk?

Remember: There are always economic problems in each economic environment-they are just different.

In Christ,

John M. Whalen

[BFP]

Can someone please explain to me why everyone is saying to buy gold right now and the price of it is ridiculously high...precious metal prices are through the roof, and will come down as soon as the stock market settles...so why the big push to buy now? Is it simply fear?

[Ovedya]

Can someone please explain to me why everyone is saying to buy gold right now and the price of it is ridiculously high...precious metal prices are through the roof, and will come down as soon as the stock market settles...so why the big push to buy now? Is it simply fear?

What's gold at now? Something like $1,300 and ounce?

Four years ago it was around $300 an ounce.

Commodities like gold - precious metals - will always retain their value, especially in a volatile market. If everything fails: If the stock market crashes, if financial institutions go belly-up, if the value of our currency isn't worth the paper it's printed on, those persons who own gold will survive.

[WayneB]

Can someone please explain to me why everyone is saying to buy gold right now and the price of it is ridiculously high...precious metal prices are through the roof, and will come down as soon as the stock market settles...so why the big push to buy now? Is it simply fear?

Not fear. Gold (as with other precious metals) is a good hedge against inflation. It doesn't really matter what it sells for in terms of currency. What matters is what good and services it will buy in a severe recession or depression. That is why FDR had it confiscated in 1933...to bolster the value of the US dollar.

Here is an excellent article on the subject... http://www.blanchardonline.com/gold_as_inv...hy_own_gold.php

[WayneB]

[1. Consider: Do you go to the store when they raise prices, or when there is a sale?

2. Make investment decisions based on your situation, considering your goals, your objectives, your time frame, and your risk tolerance, not "the market's".

3. Greed and fear drive prices short term; fundamentals drive it long term(and long term is not buying after breakfast, and selling after lunch).

4. Do not "fall in love" with any investment

5. Regardless of the merits of an investment, do not own it if you are "loosing sleep" over it, i.e., "peace of mind."

6. Usually, the best time to invest is when you feel "uneasy" about, i.e., and this is typically when there are many "scary" headlines in the press, prices are low(relatively), which is the case now in the fall of 2008. Usually The worse time to invest is when most are optimistic-prices are relatively high. That is, the worst time to invest is usually when you feel "comfortable", because this is the time when most others are "comfortable", and prices have been "bid" up to reflect that optimism.

7. Don't "buy headlines"- remember that "bad news" sells. Try to avoid "reacting" to what some "investment guru" said on TV. That is, anticipate, don't react.

8. Know what you own, and why you own an it. If it goes down, and "the story" has not changed, consider the drop a a gift, and consider owning more.

9. Dollar cost average-you do not need an MBA for this.

10. Do not buy any stock, private and/or public, associated with Auburn University. It is overvalued and due for a "crash"(kidding, here! Ask Wayne if he concurs)

ALL very wise advice from John "I know more than I let on but my humility won't allow me to boast" Whalen, a true professional...

...EXCEPT item #10. Auburn University would be a good investment at this point because they are undervalued in the market. Even though their football program is in the toilet right now, I expect it will rebound within one year. We will be like Alabama (spit spit)...to go from being unranked to winning a National Championship all in one year. At least it better OR Coach Tuberville is history.

[WayneB]

An opinion I thought you might find useful...

October 17, 2008

Op-Ed Contributor

Buy American. I Am.

By WARREN E. BUFFETT

Omaha

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I