investing 60k

[masterteo93]

What will be a viable investment with 60k assuming you have a long time horizon?

 

[kebinu]

Sti etf. Long term baby.

 

[archcherub]

What will be a viable investment with 60k assuming you have a long time horizon?

This thread onf $700000 is a good start to read up.
what shiny thing wrote inside applies to ur situation too

http://forums.hardwarezone.com.sg/87075452-post51.html

 

[ricky_villa]

Buy a mix of blue chips and reits

 

[ricky_villa]

This thread onf $700000 is a good start to read up.
what shiny thing wrote inside applies to ur situation too

http://forums.hardwarezone.com.sg/87075452-post51.html

wah sounds like very professional advice

 

[Shahmatt]

You should just buy gold and silver.

 

[archcherub]

You should just buy gold and silver.

if u had given this advice when gold was at $1900, he would be crying now...

 

[wahkao3]

invest in low risk, high return stocks

 

[alexchia01]

You should just buy gold and silver.

It's ok to buy Gold now, but precious metals are not investment.

Gold and Silver are just insurance against inflation and hyper-inflation.

Like all insurance, you can buy some, but you don't put all your life savings into them.

Just buy 10% of your capital is good enough.

 

[wahkao3]

It's ok to buy Gold now, but precious metals are not investment.

Gold and Silver are just insurance against inflation and hyper-inflation.

Like all insurance, you can buy some, but you don't put all your life savings into them.

Just buy 10% of your capital is good enough.

i second this

 

[focus1974]

Gold they say going to go up to $1400 and then $1600 ...
to get the best bang for your buck..
it is it buy GDX ... even bigger bang..is GDXJ

 

[Shahmatt]

if u had given this advice when gold was at $1900, he would be crying now...

The drop in price would be quick a shock yes, but the principle would not be wrong. Gold is going to go much higher than $1900. At $1900 it was cheap. Now it's just dirt cheap.

 

[Mecisteus]

The drop in price would be quick a shock yes, but the principle would not be wrong. Gold is going to go much higher than $1900. At $1900 it was cheap. Now it's just dirt cheap.

$1,900 in what time frame? in 3, 10 or 30 years? because the time frame will affect your returns.

 

[Shiny Things]

Gold they say going to go up to $1400 and then $1600 ...
to get the best bang for your buck..
it is it buy GDX ... even bigger bang..is GDXJ

Nope. A lot of people seem to believe that the way to get exposure to gold is through the gold-miners, but that's simply not true.

Have a look at the five-year chart of GLD (the gold ETF) vs GDX (an ETF of gold-mining companies) vs GDXJ (an ETF of junior gold-mining companies). Gold-miners don't outperform when gold goes up, and they underperform when it goes down. In every case you'd have been better off just buying gold (and considering how gold's a pretty mediocre investment, that's saying something).

Why, as the late Julius Sumner Miller would ask, is it so?

My current working theory is that gold miners are terrible hedgers, because their hedging decisions are driven by loudmouth shareholders rather than sensible business interest. When gold prices are high, the shareholders want the miners to take off all their hedges and ride it higher, because they want exposure to the price of gold. When gold prices are low, the shareholders want the miners to be fully hedged so that they're not exposed to declines in the gold price.

If you'd been a sensible goldminer, you'd have been stuffing the market full of hedges for your next decade or two's production when spot was >1900 (and incidentally skew was on its highs as well, making puts and collars a very cheap hedge) - but that's the exact time when shareholders were screaming for goldminers to cut their hedge books to zero and ride it higher.

So the miners end up selling at the lows (to hedge) and buying at the highs (to take off their hedges), and the ensuing trading losses are a continual drag on their earnings.

 

[wahkao3]

Nope. A lot of people seem to believe that the way to get exposure to gold is through the gold-miners, but that's simply not true.

Have a look at the five-year chart of GLD (the gold ETF) vs GDX (an ETF of gold-mining companies) vs GDXJ (an ETF of junior gold-mining companies). Gold-miners don't outperform when gold goes up, and they underperform when it goes down. In every case you'd have been better off just buying gold (and considering how gold's a pretty mediocre investment, that's saying something).

Why, as the late Julius Sumner Miller would ask, is it so?

My current working theory is that gold miners are terrible hedgers, because their hedging decisions are driven by loudmouth shareholders rather than sensible business interest. When gold prices are high, the shareholders want the miners to take off all their hedges and ride it higher, because they want exposure to the price of gold. When gold prices are low, the shareholders want the miners to be fully hedged so that they're not exposed to declines in the gold price.

If you'd been a sensible goldminer, you'd have been stuffing the market full of hedges for your next decade or two's production when spot was >1900 (and incidentally skew was on its highs as well, making puts and collars a very cheap hedge) - but that's the exact time when shareholders were screaming for goldminers to cut their hedge books to zero and ride it higher.

So the miners end up selling at the lows (to hedge) and buying at the highs (to take off their hedges), and the ensuing trading losses are a continual drag on their earnings.

haha yep
in fact, shareholders themselves should be the ones doing the hedging rather than expecting their companies to do it

 

[chopra]

haha yep
in fact, shareholders themselves should be the ones doing the hedging rather than expecting their companies to do it

Errr no. The farmer hedges. Period.
TS, look @ the 700k thread as shared.

 

[Dividends Warrior]

Errr no. The farmer hedges. Period.
TS, look @ the 700k thread as shared.

Bro chopra! I finally got my $50k lump sum!

 

[Bedokian]

Although the $700K thread is viable, but that thread includes talk on physical property itself, which I don't think TS's $60K is going to get.

Suggest TS to do some read-up on various long term investment strategies, and study how the markets work as well, then decide on what best suits TS.

 

[Shiny Things]

haha yep
in fact, shareholders themselves should be the ones doing the hedging rather than expecting their companies to do it

Well, not quite. The miners need to do at least some hedging.

Imagine you're a big gold miner, like Barrick Gold or Goldcorp. All in, including costs like exploration and mining and wages and the cost of keeping those huge trucks filled up with oil and tyres, it currently costs these big miners about $950 to produce an ounce of the shiny yellow stuff.

Gold goes for thirteen hundred bucks an ounce right now, so the gold companies could in theory go completely unhedged - "naked", as they say - and run around with their gold-miner ding-dongs swinging in the breeze screaming "look at us we're making $350 an ounce aren't we awesome".

But then, what happens if gold drops to $1000 an ounce and you're not hedged? Your margins collapse to $50 an ounce, your shareholders are deeply unhappy, and you have to start cutting costs to preserve your profits.

If gold goes to $900 an ounce then you're really rooted; you have to start mothballing your most expensive mines, and eating into your working capital just to keep the lights on, because every ounce of gold you produce costs you fifty bucks. At that point you might as well switch the lights off and go home.

So smart gold producers will hedge at least some of their output, so that if the price of gold slumps they've got a bit of cover (and a bit of extra time to start selling and mothballing assets before they run out of cash.

The problem, like I was saying, is that gold companies tend not to be very good at this hedging thing. The thing to remember when you read the next two paragraphs - when gold miners hedge, they have to sell gold; and when they unwind their hedges, they have to buy gold.

Back in the early 2000s I used to sit next to the gold desk; gold was down in the $300s, companies were scared it was going to zero, and we were writing gigantic five- and ten-year hedges left right and centre.

But a decade later, when gold was rocketing higher into quadruple digits, gold miners were spending billions of dollars to unwind those awfully expensive hedges they sold when gold was a thousand bucks cheaper.

So gold companies need to do a bit of hedging, or they risk blowing up the company (which shareholders tend not to like). But they can't do too much, because then if the gold price rallies the shareholders will hate them.

Any mining and commodity company executives who are reading this, here's your solution: buy put options. No funky exotic stuff; no zero-cost collars; no short options at all; just buy put options. Your shareholders will bitch and moan because you're spending cash upfront to hedge, but they'll thank you in five years' time when gold has either tanked through the hedge level and your company is still alive, or screamed higher and you've taken them along for the ride. Plus you get the best possible accounting treatment - full hedge accounting, which you don't get when you do messed-up exotics, which makes for nice smooth accounts and no awkward mark-to-market volatility on the profit and loss accounts.

Also, volatility in almost every asset class is at historically low levels. That makes hedging with options cheaper than it's ever been.

I'm totally serious about this. I did this on the sell-side for ten years. I know what works and what doesn't. If you're a company executive, and you'd like me to help you design and execute a commodity or FX or interest rates hedging strategy, drop me a PM and we'll talk.

 

[Shahmatt]

$1,900 in what time frame? in 3, 10 or 30 years? because the time frame will affect your returns.

I prefer Austrian free market economics (instead of Keynesian economics). So when I consider the price of something I look at it long term. This is to avoid the "noise" of human emotion, short term traders etc. because such things are unpredictable. The prices of anything in the long term always default to supply and demand basics. So it is not possible to put a time frame. The time frame is a gimmick of modern economic thought.

The difference in the actual traded price from the natural price is what constitutes a bubble. It is worth noting that all economies must have bubbles. This can be due to insufficient or lag in information, lack of transparency etc. All bubbles result in wealth loss. So to minimize wealth loss and cause growth of an economy the quick popping of bubbles must happen.

The free market economy is the best system for popping bubbles. A central bank, or government run economic system is conversely the worst. One reason is by nature government run industries rarely ever fail because they have unlimited resources and it is politically inexpedient. Failure is essential to a free market system and hence price determination. This is why countries with too much government involved in the economy have prices of stuff that are badly distorted from what is natural. Resulting in bubbles that are abnormally larger, resulting in booms and busts, resulting in wealth loss more severe than what should be natural.

In the case of gold the situation is simple. Governments around the world are printing money to "solve" their economic problems. By Austrian theory printing money IS inflation. The increase in prices is a CONSEQUENCE of printed money flooding into the system. That is, more paper money chasing a limited, scarce goods and services leading to price increase in terms of that printed money. On this basis alone gold must follow all other goods and services in terms of price increase. That is, if government measured CPI is 5%, gold will increase by that amount anyway by virtue of its uses as an industrial metal and jewelry. So invest in gold to keep up with inflation is one possible benefit. You can invest in other hard assets also if you wish, but then with government so involved in property/land etc. it seems evident to me that these assets are malpriced and in their own respective bubbles.

However gold has historically been used by the market as a form of money. It has intrinsic properties that lend to that purpose. For this reason, and also because governments are currently abusing the monetary system through printing, gold is likely to benefit as a safe haven from this. It may also serve to revive a new gold standard, which would greatly benefit all, but that may yet take some time.

Gold price has increase 235% since 2004. Never mind the naysayers. This at least shows that people have not forgotten why it was valuable in the first place.