New to Itulip-Looking for help

[sirbrian82]

I've only been on the site for a little while but it's been greatly beneficial already. Thanks to everybody for the insight and to anyone who can help me out. I'm 25 and have been buying silver for a year. Just started on gold today with a few ounces I found at the local coin shop. I've done a fair amount of reading on currency/macro economics but I'm in over my head on a lot of things discussed here (picking up a lot quickly though). My main concern, like most, is preserving financial stability for my girlfriend and I. We have a moderate chunk of cash to work with and I'm looking for ideas/details in some areas:

1) Energy, especially oil, over the long haul. How are you making these investments and what should be targeted/avoided?

2) Trying to figure out a time line on buying a house. Can anyone speak to whether or not it's worth entering this real estate market? I'd prefer to stay out of debt for now and i expect housing prices to continue their fall.

3) I found the post on gold as insurance interesting as it raised many issues. I'm long gold but looking for other ideas after PM and energy futures.

Any and all help is appreciated.

[GRG55]

Re: New to Itulip-Looking for help

I've only been on the site for a little while but it's been greatly beneficial already. Thanks to everybody for the insight and to anyone who can help me out. I'm 25 and have been buying silver for a year. Just started on gold today with a few ounces I found at the local coin shop. I've done a fair amount of reading on currency/macro economics but I'm in over my head on a lot of things discussed here (picking up a lot quickly though). My main concern, like most, is preserving financial stability for my girlfriend and I. We have a moderate chunk of cash to work with and I'm looking for ideas/details in some areas:

1) Energy, especially oil, over the long haul. How are you making these investments and what should be targeted/avoided?

2) Trying to figure out a time line on buying a house. Can anyone speak to whether or not it's worth entering this real estate market? I'd prefer to stay out of debt for now and i expect housing prices to continue their fall.

3) I found the post on gold as insurance interesting as it raised many issues. I'm long gold but looking for other ideas after PM and energy futures.

Any and all help is appreciated.

FWIW my suggested answers to your questions in same order:

1. Buy companies that have unhedged petroleum reserves in the ground in safe jurisdictions. My definition of "safe jurisdictions" include USA, Canada, North Sea [including onshore Denmark and Netherlands] and parts of SE Asia. My particular favourites are the pure producers in the Canadian oil sands, contrary to the "dirty oil/climate change" cohort. Be careful as there's only a handful of companies in the entire world that you really want to own, and maybe NONE right at this very moment in time.
2. Housing depends on where you live, what you pay for rent, how secure your income is [like most young folks you probably have to go into debt to buy a home, I assume]. Also depends on how mobile you expect to be in your career [think twice about buying if you expect to move around as you are just starting out in life, and a house is an illiquid liability]. Housing also depends on the local and regional potential for future in-migration or out-migration. Finally, the housing market in many jurisdictions has just started to correct, so you may wish to be patient. Very patient. And forget about every bit of advice you are likely to get from your families about "settling down", "building equity", and especially how housing is a "good investment". It's all complete nonsense. A house is NOT an investment. It's a liability...it requires maintenance and upkeep, it is taxed, and I repeat, it is an illiquid liability.
3. Cash. And be careful which currency you hold it. There's been much debate on various forums regarding that last issue, so no need to repeat here.

One question you need to ask yourself as you work through this is something along the lines of..."If the Dow goes to 5000, gold goes to $500, oil goes to $50, and the local housing market takes 10 years to get back to where it was at the beginning of this year [in nominal terms], am I prepared for that outcome?"

[BrianL]

Re: New to Itulip-Looking for help

I'm still a relative newcomer as well. On the reading side, one recommendation I recieved was Harry Browne. I picked up Fail Safe Investing, one of the few books of his I could easily find. Its very short and simple, but I'd definitely recommend it.

For perspective, I'm 28, recently bought a house, about 15% long gold and am holding an energy based mutual fund that is oil focused. The house is down 15% already, the energy fund down 33% and gold down 15%. To be fair, my ira and 401k are doing even worse, down 40% as I found itulip too late to get out of equities.

Take GRG55s point - asking yourself how you would handle market drops - seriously. Separate your money into what is precious to you and what you are willing to gamble with. Be sure to distinguish between long term information here and that more aimed at day traders.