The best/safest thing to invest in today?

Discussion in 'Business & Economics' started by Plazma Inferno!, Feb 11, 2016.

  1. Plazma Inferno! Ding Ding Ding Ding Administrator

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    In your opinion, what would be the safest investment today? Of course, I understand it may depend on amount you have, the country you live in, but I'd like to hear your opinion on what is the "safest" bet.
     
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  3. joepistole Deacon Blues Valued Senior Member

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    US government short term debt.
     
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  5. Edont Knoff Registered Senior Member

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    A very tricky question. Tricky because "safe" includes several factors.

    Many currencies saw a huge expansion of money handed out by the central banks. Very likely they are overvalued currently, because the real economics in the countries where these currencies are used did not grow accordingly, neither did accumulated assets.
    Therefore it is likely that they will undergo some correction in the future. How far in future? Impossible to say ... but if you assume a correction in near future, any investement in money will not be "safe".

    - In some countries the prices for land seem to be rising, or at least be stable. There an investment in land ownership might be a good idea. You can rent this land to farmers or other people who want to work with the land.

    - Similarily buildings. Just very tricky to know where buildings are overprized already, because so many tried to evade the money problems sketched above and invested in buildings already.

    - Infrastructure. Water supply, roads, railroads. While not typical crisis investments, I think that in the current situation these are promising investments. If you don't have a lot of money, group up with other investors.

    - The classic: Noble metals. From single coins for small investments, up to ingots. These are likely to do well in times of economic crisis, particularly when money is devalued.

    - Food production: Yes, a very difficult area, but eating is one of the most basic and important thing for humans. One can stop to spend money on many things, but food will be the last. So if you expect a crisis, be sure you are on the producer side of food, not the consumer side. Food prices skyrocket in crisis times.

    I suggest these because I expect a currency devaluement for the dollar as well as the euro and the yen rather soon. Company shares might be an option, but since the question was about safe investements, they seem to volatile.

    And yes, I'm paranoid. So some of the suggestions conisder the least loss in case of a crisis, not the biggest win.
     
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  7. quantum_wave Contemplating the "as yet" unknown Valued Senior Member

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    Own some gold and silver and hold it, including US 90% coins, and go to cash with your investments, for now, IMHO.
     
  8. joepistole Deacon Blues Valued Senior Member

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    Before one writes about risk, it helps to understand what risk is and what it isn't. The OP question was about risk and the lowest risk investment, it wasn't about the next best speculation. Risk is the probability of variance from an expectation. Low risk isn't the latest and greatest next speculation.

    The equity markets are pricing in another great recession which may or may not occur. If another great recession occurs, we will see rampant deflation. That means prices for virtually everything will fall. Oil prices, metal prices, infrastructure prices, food prices, real estate prices will fall and currency prices will rise. People will be able to buy more services and products with less money. That's deflation. That isn't inflation. It also helps to understand what inflation is and what causes it. It takes more than just printing money (i.e. expanding the money supply) to cause inflation. That's why in 2008-2009 all those fools who were biding up the price of gold to unprecedented highs were later caught holding the bag when the speculative bubble burst and they couldn't understand what happened. They didn't understand the drivers of inflation and as a result they took some very heavy losses. If current conditions persist, we will likely see another speculative bubble in gold and when that bubble bursts, and it will burst for similar reasons, the latest round of speculative gold buyers will be equally disappointed and confused and licking their wounds like the speculators before them.

    That said, the least risky investment is US government short term debt (i.e. debt maturities of one year or less). In finance and economics, US debt is considered as risk free as possible. US Treasury rates are the "risk free rates" used in econometric modeling and forecasting.

    http://www.investopedia.com/terms/r/risk.asp

    http://www.investopedia.com/terms/r/risk-freerate.asp


    I will put forth a word of caution here. US government debt may lose its risk free status if Ted Cruz is elected POTUS later this year. Cruz has repeatedly attempted to cause a US debt default in order to advance his personal political fortunes. However, I think the odds of Cruz being elected POTUS are very low. With the radicalization of the Republican Party political risk has increased in the US. Indeed, political risk around the globe has increased too though for different reasons.
     
    Last edited: Feb 11, 2016
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  9. Edont Knoff Registered Senior Member

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    Even that you quote my posting, I don't think your answer was in regard to me. I didn't use the word risk at all. You've been the first in this thread to use it. My posting was about safety, investements which are likely to keep their value even in times of a crisis, or, to minimze the expectable loss in times of a crisis.
     
  10. joepistole Deacon Blues Valued Senior Member

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    Is safety not the lack of risks? Certainly there is nothing safe in speculation.
     
  11. Bowser Namaste Valued Senior Member

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    I don't believe there is an absolute safe bet. If you shoot to buy low and sell high, your chances of success should be good. Also, timing is absolutely imperative. A lot of people jump into the game when it is hot, often paying premium prices for their share, when the best time to invest is while everyone is trying to get out.

    There's a quote that I consider insightful...

     
  12. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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  13. zgmc Registered Senior Member

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    Spam. Yep the processed canned meat. It keeps forever, so when the shit hits the fan, you will at least have plenty to eat or trade for whatever you need.
     
  14. Seattle Valued Senior Member

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    It depends on what you mean by "safe" but cash has no counter-party risk so you could argue that is the safest investment (speaking of the dollar).

    When you consider monetary inflation, then cash isn't necessarily "safe". Government bonds might meet that definition.

    If you are looking at risk/reward ratios then that opens up a lot of other more subjective investments.
     
  15. Sarkus Hippomonstrosesquippedalo phobe Valued Senior Member

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    *cough* thread necromancy *cough*
    I mean - almost 8 years??

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    Just out of curiosity, what class of asset has done best since Feb 2016? - and let's exclude the "C" word.

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    I know UK stocks have done abysmally compared to US (c.25% growth in FTSE 100 cf. DOW almost doubling and S&P more than).
    House prices here have gone up c.50% in that time, but unless you're downsizing, or moving to a lower-priced area, or have multiple homes, then this isn't really applicable.
    We do now have some savings rates that are above inflation, so they're good and safe. Our inflation is c.4.7% and you can get savings rates of over 5%.
    And if your mortgage is now 5%+ then paying that off is saving you that much in interest. But it does tie your money down.
     
  16. Seattle Valued Senior Member

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    My comments weren't time specific, so why start a new thread in a category where I have started most of the threads in the first place?

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    To answer your question, energy commodities mainly due to the Ukraine war I'm sure.

    Personally, I've had most of my equity money in QQQ ( NASDAQ 100) for the last 30 years. Why fight the trend (tech stocks)?

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    Housing, yes, it's both a place to live and a way to keep up with inflation (or more). Luckily I live in Seattle so that has done well. Although unless I move it mainly just means that my property taxes continue to go up. The average house price increase over the 30 years I have lived here is 7.5%

    I've never been that interested in savings accounts, CDs, money market funds as a way to save or as a return to live on but I'm not the OP in this thread either. My concept is more along the lines that I'd rather have a higher percentage in stocks (tech stocks mainly) and a lower amount in bonds or other fixed income assets and just go to cash (money market fund) for that.

    In other words, you might look at the traditional 60/40 mix of stocks and bonds and instead decide to go 90/10 or 80/20 for the same risk/reward ratio since cash has even less risk (no counter-party risk) as bonds.

    It has another function and that is you can ride out average down markets (2 years) without having to touch your stocks and at the low point, you have cash to buy in a low prices (if you so decide).

    Conversely near market tops you can sell a few shares (at high prices) to beef up your cash again. This way you can enjoy market tops and market bottoms with far less stress. It's not really market "timing", IMO, because you aren't selling everything and trying to time the top and then having to buy all in at a bottom. All that would require both paying a lot of capital gains taxes and it would require having to be right (timing) twice.

    When you see your stocks going up at an insane rate, you know it can't last forever so if you need to raise some cash, that's the time to do it. It's also the time to buy a car, for example, if you old one is breaking down a lot.

    If you have the cash reserves just to be stress free during a protracted down market, once you see that things are turning around, you can use some of that, if you chose, to buy stocks (or an index) that you know are greatly depressed and on their way up. Most people know when that time has come but many just don't have any free cash at that point because it's already tied up in the market.

    To be able to do this though, in general, you just have to be frugal and delay self-gratification for a few market cycles when you are younger just to have the assets to do this with in the first place.

    Times change though. I remember in the early 1980's professors were locking into bonds as a trading investment. When you know interest rates are at all time highs, you know they can only go down. With bonds, you can lock into high rates and then when rates come down, you sell those bonds and lock in great capital gains.

    At that time, no one was in the stock market anymore and the way to make money was to trade bonds. Since then bonds have sucked. I've never even owned bonds. As I said, times change.

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    Last edited: Dec 6, 2023
  17. ThazzarBaal Registered Senior Member

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    Tough call at this point. National defense maybe? Oh, wait you mean as it relates to prosperity ... Well, umm ... How much time are you willing to spend out on the prosperity effort? I would say people, but people disappoint other people if and when offered the right incentives. Gold, seems solid enough but without adequate defence and security forget about it. Food? Yes, yes, food, housing, but real estate is off the chart high and many of us are left without adequate means to secure our investments.

    Community ... Ahh, that's something, but the how's and who's can get complicated. Education seems worthy enough. At least when it comes gen Z and Alpha's ... The future. What about us? We've been sacrificed and set on course for something greater than ourselves.

    Hope this helps
     

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