First, choose between an ongoing investment plan (example is $200 twice per month) or a lump sum investment.
If you want an ongoing investment plan that requires very little management, then open (for example) a Sharebuilder account online, automatically invest a fixed amount of money per month, and monitor the account four times per year. Invest in some of the stocks listed at the end.
If you want to invest a lump sum of money now:
- Open an investment account at Schwab or another brokerage
- Forms are available online at Schwab
- Complete forms, sign, and attach a check
- Take or mail the form to your local Schwab office, open the account, obtain your account number, and make certain you have online access
- Purchase stocks through Schwab (or another) and gold and silver bullion coins from Apmex or another reputable dealer
- The US Dollar is weak and current fiscal and monetary policies assure that it will, on average, continue to weaken in the next decade. Military spending and the "forever war," chronic deficit spending, persistent trade deficits, and out-of-control Medicare expenses ensure the continued decline of the dollar.
- Given the weak dollar, out-of-control US government spending, and increasing worldwide demand for food, fuel, health care, and energy, the falling dollar and rising consumer prices will continue, on average, for another five years and probably much longer. (I remember coffee costing $.05 per cup and gasoline costing $.15 per gallon. They are more expensive now. Nothing has changed that will stop the consumer price inflation process.)
- The REAL inflation rate for most middle-class Americans is nearing 10% per year.
- If you invest your savings at 3% and lose 7 – 10% to inflation, then you lose 4 – 7% per year in purchasing power – a recipe for disaster, both personally and nationally.
- Investing to protect your purchasing power is necessary and sensible.
Invest In What?
- There are a variety of areas in which to invest your savings. Many will be unsuccessful. Others will work but I don’t understand them, so I can’t discuss or recommend them. I invest in what I know, understand, and feel confident will increase substantially in value over the next five years.
- What do I recommend?
- Gold and silver bullion
- GTU – gold ETF (exchange traded fund that closely follows the price of gold – it trades as a stock and is highly liquid)
- PSLV – a silver ETF (trades as a stock and is liquid)
- CEF – a Canadian fund invested solely in gold and silver bullion that trades as a stock
- GLD – gold ETF
- SLV – a silver ETF
- Gold and silver coins and 100-ounce silver bars (Apmex or your local dealer). Buy rare coins only if you understand the numismatic market and trust your supplier. Otherwise, stick with Silver Eagles (1 oz. silver coins) and Gold Eagles (1 oz. gold coins) issued by the US government or silver and gold maple leafs issued by the Canadian Mint. Coins and bars will cost more than the "spot" price for silver and gold but will return more at sale.
- Gold and silver stocks (do a bit of research and pick the ones you like)
- Sharebuilder Example
- Lump-sum Investment Example
|PSLV||$50 twice per month||GG||$50 twice per month||SSRI||$50 twice per month||GDX||$50 twice per month|
|Gold and silver bullion (coins and bars)||$20,000|
|UNWPX (mutual fund)||$10,000|
All markets experience volatility. The silver and gold markets are often subject to more volatility than most, because they are smaller markets, sometimes manipulated, and are highly emotional. There is no fever like gold fever, and I believe the nation will experience an attack of gold fever on or before the end of 2016. Prices will go parabolic and probably double in the final three months before the inevitable monetary restructuring or crash. Then it is time to sell some of your investments when "everyone" else is buying. Then wait for the correction and carefully buy back.
Silver and gold tend to do little for months at a time, then rally strongly for three – six months, and then crash. The crashes are emotional shakeouts that often involve a drop of one-third in price. There were crashes in April 2004, May 2006, March 2008, and May 2011. After each crash, the market eventually rallied well beyond the previous highs.
$4.01 November 2001
$21.30 March 2008
$48.87 April 2011 (recent high)
$29.00 June 2012
$256.00 April 2001
$1025.00 March 2008
$1923.00 September 2011 (recent high)
$1600.00 June 2012
I believe that silver and gold will double in three – five years and then double again in the following three – five years. Gold and silver stocks should rise even more rapidly. You can count on US Congressional incompetence and procrastination, Wall Street greed, rising demand for gold from China, India, and Russia, and the inflationary policies of most central banks to assure the continued price rise of gold, silver, related stocks, and your real cost of living.
aka Deviant Investor
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