The million dollar question of the day is where to invest your money to maximize your return this year? Let’s look at a few places that may or may not make sense. Traditionally, people invest in a few tried and true places such as: the stock market, treasury notes, real estate, the money market, savings accounts, Certificates of Deposit and gold (precious metals). I am not an economist, nor am I a financial planner, but common sense says that each one of these offers has an inherent problem. If you are a business owner, I am going to offer you some ideas that I believe can help you survive the current recession and then thrive as the economy rebounds. Let’s take a look at each of the traditional places people invest their money and then my ideas for business.
Before I start, I’m sure there are a few stock brokers asking what gives a marketing and advertising guy the right to talk about investments? I promise you that any talented investment counselor can talk circles around me when it comes to sophisticated investment tools. I will also say that I am going to put forth a few ideas with the intention of opening up a conversation, with others adding great ideas that they have found to be working… However, I believe the common sense approach I am taking may just stimulate some business people to action and to grow their business. The bottom line – there are no small businesses too large to let fail. Large banks and large businesses got bail outs – we entrepreneurs and small business people are on our own…. Small business can be an engine for the recovery. However, I will state some hard to hear facts and then some ideas I have that can help some businesses thrive while their competition starves. I hope I can inspire small business people to act on their own behalf and invest in growth…. But let’s look at the traditional place people put their money first.
The stock market is going through one of the most volatile time in its history. I don’t need to tell anyone that it is not a place for the faint of heart right now… I have monies in retirement accounts and I am sure that the markets will come through this challenge just like we have in the past… stronger, more and more competitive. In the long term, I believe we will see growth that will provide a nice return. However, most will agree that the short term is no bed of roses.
Treasury notes offer very little up-side in the short run. The Fed just announced that interest rates are going to stay low until 2113. Ten year treasury notes are paying 2.5%…. so T-notes most likely are not even going to keep up with inflation. How about real estate? Yes you can buy cheap. Does the real estate market still have a bit more to drop? I don’t know. Should it do just fine in the long term? I believe it will. However, is it the place to invest short tern money? I don’t think so. How about the bank or a certificate of deposit? Both of these are offing interest rates that are less than 1% so they are losing ground against inflation too.
This leaves gold and precious metals. I bought a few ounces of gold and some investment silver coins about 20 years ago when gold was around $250 an ounce. In hindsight I wish I bought ten times as much…. As I write this gold is over $1800 per ounce! It is at an all-time high. If you asked me if you should have bought at $1000 per ounce I would have said no (I sold some – shows what I know)…. Will it go higher – most likely it may still go higher. If you buy at these rates you risk getting caught when the bubble bursts…. The old adage is buy low and sell high…. not buy high and hope that is goes even higher… Gold has certainly out-performed most investment counselor’s expectations but there is a huge downside in buying high. If you want to play this game, I hope you win but don’t cry if you lose big time.
Stay Tuned for Part 2 in my next blog, where I will layout 10-12 ideas that can help now and will open the discussion so that everyone can have input. The goal will be to let people share what is working and we can all help one another….