Tuesday, October 6, 2009

Investing in Preparation for a Hyperinflationary Environment

Some general rules of thumb:

[1] The U.S. Stock Market is not a good place to start. If you have never invested before, opening a brokerage account may cost you more than it will help you. For example, opening an account with Fidelity will cost you around $2,500. Do you have $2,500 to spare? Do you have enough to buy $7 per share? How many shares would you buy? Will you have money left over to pay for bills and food? Did you know some of the minimum deposits for some accounts begin at $10,000 and the cheapest being $500? Can you afford that? These are some of the questions you should ask yourself before diving into the stock market.

P.S. The only stocks that look as if they will do good are Gold Stocks, Silver Mining Stocks, and Oil and Natural Gas. Some of these stocks are really low (beginning at $1.69 per share; $6.95; $12.95, etc, these are general prices for demonstrative purposes only) Others are already as high as $2,000 per share (these are mainly the oil stocks)

[2] Gold is more valuable than silver, period. Gold ended today at $1,042.26. Silver ended at $17.38. Get my point.

[3] Gold is rarer than silver. Silver is used for industrial purposes because it is more common. Nobody uses Gold for industry.

[4] Gold is an inflation hedge. More people are buying gold than ever before to protect their money. (I was recently told that gold is better used for the recovery period i.e. post-depression. I will rebut that with more facts later.)

[5] Stay liquid. "Liquidity" basically means keeping money in your pocket to spend. It also means keeping money in your pocket to save.

[6] Here is a recent article on Gold. Check it out.

[7] Some gold companies require you to make a minimum purchase of $10,000. Sound familiar? Perhaps you are better buying a year's worth of dry food to eat in the case of food inflation. (Especially if you live in an urban area.)

[8] Here is another website giving basic information on the history of gold, investment tips, and more. I highly recommend it.

....More to come later.....

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