Thrilling Financial Thoughts
Need more hype?
Warning: this is one of my longer posts.
As everyone competes for attention (and I whine that nobody reads my articles), we find ourselves living in a world where routine things are hyped. For example:
“Forget Fiat: Silver Explodes 10% to $67.81“
Obviously I’m pro precious metals (I dislike using the term “bullish”), but if you keep a close eye on silver spot prices you’d be well aware that they bounce around a lot and a 10% change in one day isn’t exactly headline news. Well, okay, it’s a big deal but it’s way over the top to use a word like explodes.
They aren’t even technically correct. If you take the very momentary bottom price of the past two days and compare to the very highest price (which occurred after that article was published) you get a 9.6% rise. Nobody times it perfect, so let’s not get too excited about these swings.
So is silver back on the rise? Or is this just another one day bounce?
My assumption is that my readers generally aren’t checking financial market prices daily. If you are then I’m sure you realize how much that can drive you crazy as every time Trump says something prices dramatically drop or rise. Perhaps my articles can serve as a way to remain aware of the financial markets without getting drown in hype?
As long as Trump remains in office, I’m expecting the volatile headlines and dramatic financial changes to continue to occur. We can let that drive us crazy or we can just accept it for what it is. So far this year, I see two major forces impacting the financial world: Trump statements and the “AI” hype. If you’ve done a good job investing, this year has been extremely good for you.
I’m in a fortunate position to compare my personal investments (a one time seed amount 18 years ago) vs my employer’s 401k (13 years). This allows me to observe that I’m blowing away the “market” with my investments while the managed 401k (that I can’t control) limps along relatively speaking. This year has been fantastic so the 401k also looks very good, but pales compared to my investing decisions.
So far this year, on average, my very small personal investment account has been gaining at a rate that pays me double what I earn at my job. There is a lot of bouncing as typically two out of three days are very good gains and the third day is a small give back.
My 401k gets a constant flow in of new investment money (automatically withdrawn from my paycheck every two weeks) and yet in 13 ½ years of this, each year contributions being roughly double what I originally put into my IRA in 2008, my 401k is still lagging far behind. But in the neighborhood. So this year I have roughly equivalent sized accounts that I can compare. It’s not unusual for my 401k to gain a small amount in a day when the IRA gains twenty times that amount!
Why am I babbling about my own investments? What I’m trying to do is to get my readers to stop thinking that 10% to 15% annual returns on their investments are “good”. If you are using a financial advisor, you might want to ask them why you aren’t getting 25%, 30% or so far this year to date over 50% returns. Are you being to conservative and careful?
My strategy is to use gold and silver as my conservative and careful investments while my stocks are allowed to go wild.
Writing these articles is a struggle for me, because when I read my own writing it sounds like I’m an arrogant ass bragging about my own success. {laugh} I feel the same way when I read other financial people writing about their own success. This makes me feel foolish that I didn’t start being serious about investing long, long ago. Why did I wait until just before retirement?
Inflation, true inflation (devaluation of the dollar), has been killing the typical person for decades. It’s a slow death, a form of slavery. It’s motivation for me to write these articles because I’m convinced that if you don’t “join them” (utilize investments – aka Capital Gains – in addition to working) then you are going to watch your future slip away into financial mediocrity.
So as I retire and try to give back to the world, my hope is that by sharing these thoughts I will help others improve their lives.
Precious Metals:
Gold: $4,222
Silver: $68
As of the moment, gold and silver seem to have bottomed out for now. I’m expecting gold to reasonably reach $6,000 per ounce by the end of the year. Yes, it should be a good purchase now (at $4,200/oz). Silver has had a lot of hype about the industrial usages and the ongoing multi year shortage. If you listen to the non-hype experts, that work in the refining industry, they confirm the expectation of $6,000 per ounce as a quite likely high end expectation for gold this year, but don’t expect the drama and excitement of silver that we had in the past year.
What is interesting with gold’s rise over the past few years is that normally with these high prices you’d see gold being sold (like jewelry) but that’s not occurring now. People and institutions are buying gold and not selling. More and more, people and central banks around the world are not trusting fiat money and continue to build gold reserves to firmly back their wealth.
If you aren’t paying attention to financial news, perhaps you aren’t aware that the biggest IPO (Initial Public Offering) in history just occurred with Elon Musk’s SpaceX. To educate myself, I decided to participate too so I committed to buying shares before it was released to the public and opened to trading. As expected, once SpaceX became available for open trading, my shares rapidly gained in value → a 24% gain today. Not a bad day’s profit! It won’t surprise me if SpaceX values crash a couple times in the near future. That’s okay, I’m in it for the long run. I did offer some of my shares for sale if the price bounces up a bit more, but the rest I expect I’ll keep for years and most likely will buy more during any upcoming “crash”.
I’m heavily invested in “space” because I think it has a great future for profits. The SpaceX IPO had a very interested effect on the market. Earlier this week it “decimated” most of the strongly growing stocks as those were sold off to raise cash to buy SpaceX. Once raising cash for SpaceX was done, those stocks have been bouncing back very rapidly.
The other impact was that most other “space” stocks took dramatic falls. Naturally I used that as an opportunity to buy more of them as they bottomed out.
Hopefully my articles provide a refreshing different point of view as I don’t join in with the popular trend of predicting the next doomsday. My view is that one person’s doomsday tends to be another person’s boom. The trick is to make sure doomsday doesn’t come for you.
What will next week bring? Will Trump declare peace with Iran and then attack another nation? Who knows! I’m sure it will be an entertaining ride. Try not to drown, learn to surf and enjoy the times!