What would you invest in if you had $50,000 cash ?

[Lyman]

Originally Posted By: tomcat27
$40k in Bank Of America stock (Warren Buffet is scooping it up) and $10k in Amsoil product! just for bragging rights!
Everyone I have talked to about BofA thinks they will go under. Unless they get bailed out that is.

 

[Pablo]

I thought the Buffer was buying preferred B of A stock that pays like 4%......I sorta skimmed the details.

 

[PandaBear]

Originally Posted By: LT4 Vette
PandaBear,

Lets say they have no kids, no debt (car , house, credit cards, student loans...etc) and wanted to all the money and not blow it on booze and hookers.



Assume you are not an expert in any particular industry or trade (i.e. can guess insider knowledge before the wall street guys do, pretty hard).

One chase business investment manager (formerly Merill Lynch but now got nothing to do as they down size, and end up only working as customer relation manager who provide investment consultant for business customer for free), told me to look at agricultural in Latin America (along with the typical diversification and invest what you know standard strategy).

He said that precious metal, energy are already overpriced and too volatile to go in, and agricultural (especially those cater toward Asia demand) are still booming and relatively stable. Based on his analysis, China is overheating, Russia and India are too unstable, and Latin America on non minerals are under appreciated.

One of my undergraduate international economics majored friend send me a bunch of Latin America investment report that he got access to for free (normally around $500-1500 each), and they all sort of point to the direction that Brazil and (surprisingly) Peru are booming, with about 30% of people in middle class income (new money, to their standard) and 30% below poverty, and the market for consumption growth is very high. Income growth, energy consumption (electricity), cell phone market, export all have a lot of growth potential.

That was before the downgrade and bust this month, I don't know how much have changed since then.

If you are interested in high risk high growth, I'd do a lot of research about those market before throwing money in there in a panic.

If you want to play it safe, buy into a mutual fund that's large cap in the developing world with emphasis on Latin America would be good.

 

[PandaBear]

Originally Posted By: Pablo
I thought the Buffer was buying preferred B of A stock that pays like 4%......I sorta skimmed the details.


6% dividend per year and the right to buy 700 million share at 7.14 in 10 years. Some news said it is a 8B deal for 5B or 25% instant profit on the first day of the deal.

Unless you are Buffer you will have no way of pulling it off, well, at least he's going to donate all his money when he die so it benefit the society in general.

 

[Drew99GT]

Originally Posted By: Stanley Rockafeller
booze and hookers for most of it.

the rest I would waste on getting an accounting designation


You just explained my life.

 

[Shannow]

More lottery tickets.

 

[dwcopple]

Gold, or you could pay off my student loan and live a happy life knowing you helped better someone else's well-being!

 

[RTexasF]

Corporate bond funds and some municipal bond funds.

 

[CivicFan]

$50k? I would invest in a month of vacation.

 

[CivicFan]

Originally Posted By: Pablo
I thought the Buffer was buying preferred B of A stock that pays like 4%......I sorta skimmed the details.


That's his M.O..

Originally Posted By: NewsSources
According to the terms of the deal, Bank of America will issue 50,000 preferred shares to Berkshire at a value of $100,000 each. The preferred shares will carry a somewhat hefty 6% annual dividend, paid out quarterly.


Simple mortals do not get deals like that.

 

[Hokiefyd]

What would I invest $50k in?

As a 30-something looking to retire in 30 years, I would invest probably half of it in some sort of index fund with a very low expense ratio, and the other half in a large-cap mutual fund with a very low expense ratio. Vanguard is known for having pretty "cheap" mutual funds, but others are out there as well.

 

[IndyIan]

$50K, that would kill off our mortgage and I'd probably "invest" in a newer car.
I don't know what I'd invest our former mortgage payment into? I don't have an index fund so maybe that, but I don't really like the stock market with all its "paper value" but I guess there are so many powerful folks leaching off of it that its probably dumb to bet against it...
I should look into buying farmland some how in monthly chunks.

 

[Drew99GT]

Originally Posted By: Hokiefyd
What would I invest $50k in?

As a 30-something looking to retire in 30 years, I would invest probably half of it in some sort of index fund with a very low expense ratio, and the other half in a large-cap mutual fund with a very low expense ratio. Vanguard is known for having pretty "cheap" mutual funds, but others are out there as well.


IMO, you'll get slaughtered in index funds these days. Look at how the markets performed over the last decade. Up, down, up down. Averaged out, it's essentially flat. The days of getting rich the easy way by parking money in a 500 index fund and letting it ride out the drops are over. You need to pick GOOD mutual funds that have well performing sectors and companies in them, or you need to learn how to do basic technical research and start trading more often with things like ETFs.

 

[CivicFan]

A better solution than buying index funds is to select the 30 companies that make up either Dow Jones, or the same number of companies representative of their industries, and buy the individual stocks. That way you avoid paying the middlemen and their costs as they adjust their funds to match the indices they follow.

http://money.cnn.com/data/dow30/

The companies that make up the Dow Jones are: 3M, Alcoa, American Express, AT&T, Bank of America, Boeing, Caterpillar, Chevron, Cisco, Coca-Cola, DuPont, Exxon Mobil, General Electric, Hewlett Packard, Home Depot, Honeywell, Intel, IBM, Johnson & Johnson, JP Morgan Chase, Kraft, McDonald's, Merck, Microsoft, Pfizer, Proctor & Gamble, Traveller's Corp, United Technology Corp, Verizon, Walmart, Walt Disney.

$50,000 may not be enough to buy significant number of shares but it's OK. Index funds are for people who want to invest incrementally with small amounts. But if you think of a stock portfolio as a hobby where you collect stocks instead of other collectibles like bottle caps or baseball cards, it's very doable to build a healthy portfolio over time.

 

[javacontour]

If you are buying it all at one time, that MAY be true. If you've been buying over the course of the decade, dollar cost averaging is your friend.

I'm trying to get my head around this. Most examples I've seen show only a few months.

I realize the DJIA started out in 2000 at around 11,5xx IIRC, and where is it today? It's at about 11,3xx give or take as of this writing.

Yet as it's gone down into the 7K range, I got more shares, when it was flirting with 14K I got fewer.

The shape of the curve is largely the same for the S&P 500.

I have some of each, about 5% precious metals, about 25-30% in international markets.

Mostly indexes in all those places, save for the precious metals.

My trading consists of selling what's over my desired percentages and buying what's below my desired percentages. That leads me to sell off SOME of my gains and buy more in the things that are out of favor. Sort of the Buffet strategy, but on a far smaller scale

If everyone is running to precious metals, I'm selling. When they flee, I'm buying, etc.

If I had 50K to invest, I'd either buy in a fashion to re-balance my portfolio, or dollar cost average and buy every month for the next 4 years, as the market goes up, down and sideways

 

[Hallmark]

Originally Posted By: CivicFan
A better solution than buying index funds is to select the 30 companies that make up either Dow Jones, or the same number of companies representative of their industries, and buy the individual stocks.


What a coincidence that you recommend buying the DOW on this date.

The DOW finished today at EXACTLY the same level it was 5 years ago today. So, exclusive of the miniscule dividends (albeit better than nothing), an investor would have gained nothing and, in fact, would have lost to inflation/purchasing power.

 

[Drew99GT]

Originally Posted By: Hallmark
Originally Posted By: CivicFan
A better solution than buying index funds is to select the 30 companies that make up either Dow Jones, or the same number of companies representative of their industries, and buy the individual stocks.


What a coincidence that you recommend buying the DOW on this date.

The DOW finished today at EXACTLY the same level it was 5 years ago today. So, exclusive of the miniscule dividends (albeit better than nothing), an investor would have gained nothing and, in fact, would have lost to inflation/purchasing power.


Exactly my point. You can buy at the bottom of each trough or dollar cost average for mutual fund shares in an index fund, but when the market hits another trough like it's been doing for the last, well, over a decade, with HUGE swings, you're still screwed.

There are good funds out there that are consistent and have owned the indexes if you search for them.

 

[crinkles]

Originally Posted By: javacontour
If you are buying it all at one time, that MAY be true. If you've been buying over the course of the decade, dollar cost averaging is your friend.

I'm trying to get my head around this. Most examples I've seen show only a few months.

I realize the DJIA started out in 2000 at around 11,5xx IIRC, and where is it today? It's at about 11,3xx give or take as of this writing.

Yet as it's gone down into the 7K range, I got more shares, when it was flirting with 14K I got fewer.

The shape of the curve is largely the same for the S&P 500.

I have some of each, about 5% precious metals, about 25-30% in international markets.

Mostly indexes in all those places, save for the precious metals.

My trading consists of selling what's over my desired percentages and buying what's below my desired percentages. That leads me to sell off SOME of my gains and buy more in the things that are out of favor. Sort of the Buffet strategy, but on a far smaller scale

If everyone is running to precious metals, I'm selling. When they flee, I'm buying, etc.

If I had 50K to invest, I'd either buy in a fashion to re-balance my portfolio, or dollar cost average and buy every month for the next 4 years, as the market goes up, down and sideways

DCA works better in a falling market, and worse in a rising market (what I have read a few months ago...).

I'd love to hear DRew's reocmmendations. I am either looking at Schroders or Vanguard. Schroders have done well in the past but I like Vanguard. I can invest in either in their wholesale funds with as little as $250 though an online bank as proxy. (0.7% brokerage).

 

[morris]

a good truck.

 

[Chris B.]

Class 3 machine guns and lots of ammo for when the SHTF.