Investing in My Future

While I'm not a financial guru, I do know a bit about investing, stocks, commodities, debt and so forth. Like many people, I had a lot invested in my 401(k), and like most investors, I lost a lot when the market crapped out. The way I differed from most people was that the ONLY reason I lost so much, was because my timing was a little off. I had planned on reallocating my investments because I saw the writing on the wall, but I was a bit too slow. It was a hard lesson, but I'm not losing sleep over it, because a lot of people lost a lot more than I did. And until I actually start realizing any gains or losses from my investments, it's all theoretical money. Besides, I'm young enough that I'll have time to recover my losses... as long as I play it smart and don't get greedy.

Since the crash, I haven't really invested anything in my retirement. My current employer doesn't offer any retirement package, and my income is lower than it was when Wall Street went south. With this in mind, I have taken a different approach. While the market is effectively moving sideways, I am paying off debt. Paying off debt provides a guaranteed return on my investment (something that no stock, bond or commodity investment can do), and it has a higher rate of return when compared to anything except for gold.

I've thought about investing in gold, but I don't have enough disposable income to buy a single ounce, much less the large stash required to really make some money from gold's current trend. I know that there's a major bull market on the horizon, but I'm going to let my 401(k) handle that for the near future.

Silver, however, is kind of intriguing. It's got the intrinsic value that gold has (though on a far smaller scale), but it also has industrial uses. I may be able to pick up a bit of silver over time. Another thing I've noticed regarding precious metal investing is the lackluster performance of platinum and palladium. Platinum generally runs several times what gold costs, but recently gold has taken off to such an extent that it's very close to the price of platinum. This ratio can't stay the way it is forever. Either gold will have to drop or platinum will have to skyrocket too. Palladium is in the same boat. It generally trades somewhat less than gold (50%??), but like platinum, its value hasn't appreciated much. This kind of makes sense. Palladium is a main ingredient in catalytic converters in cars, and face it, cars aren't selling like hotcakes lately. But again, at some point, palladium needs to take off. Silver seems to be starting to catch the coattails of gold, and it may be worth it to pick up some "poor man's gold" in the future. But for now, the way I'm going to invest is with a guaranteed return... pay off my debt.

Now, if only my government would follow my lead...