4 ms·

What if you do not have confidence in America's economy, long-term? What do you invest in, then?

geogra4 8y ago
Gold, or perhaps, CNY/Yuan
whitepoplar 8y ago
Note that the best economies don't always equate to the best performing capital markets. Investors in China lost quite a bit of money during periods of immense growth. If you don't have confidence in America, you could diversify by holding a portion of money in indexed international funds. But be careful, no one can predict the future! Best to hold a little bit of everything.
- granshaw 8y ago
  Yup. The "great" thing about the US is that it's a large developed country with a strong rule of law, but at the same time also perhaps the most corporatist country on earth, allowing companies to act with impunity and lobby when needed, all of which leads to big and sustained profits. Compare this to, e.g. Europe.
  - Tehchops 8y ago
    >with a strong rule of law Not so certain these days.
    - whitepoplar 8y ago
      Can you give an example of a better-functioning legal system?
      - AnimalMuppet 8y ago
        Canada? Switzerland? Better examples aren't as easy to come by as cynics think. I think the problem they see is that it's worse than it was ten years ago, rather than that it's worse than most other places.
pembrook 8y ago
The question isn't if the region you're investing in is going to have high growth. Most retail investors make the mistake of assuming high growth = it will be a profitable investment. In fact, the companies and countries that are talked about in the press as being "the fastest growing" are typically the worst investments. How is this possible? Because everybody else has also purchased that investment thinking the same thing you are and pushed its valuation beyond even high growth levels.
- ta1234567890 8y ago
  Sounds like crypto
pm90 8y ago
There are really no other good options. The simple fact is that the American economy, and especially American financial instruments absolutely dominate the Global Economy. Consequently, a long term negative growth in the US would, by definition, lead to a Global Economic Downturn.
- ta1234567890 8y ago
  > There are really no other good options. This is just BS. There might not be other easy/convenient options for people in the US to invest in other economies, but that surely doesn't mean there aren't any options. One option: gold. Sure, you can criticize gold as an investment all you want (and I'm not recommending it), but it's definitely an alternative to investing (directly) in the US economy.
  - namibj 8y ago
    There are Vanguard index funds for other regions, and also iirc some others too. Combine with motifinvesting, and reap the low fees and such. I would certainly run the numbers if they didn't say they don't want me as a client.
  - whitepoplar 8y ago
    Gold is not an investment, as it isn't income producing (in the same way that a house isn't an investment). Gold is a speculative instrument.
    - ta1234567890 8y ago
      Sure, but that's the case for almost the whole stock market (in the US) right now. Fundamentals make almost no difference in the stock market today.
      - whitepoplar 8y ago
        It's richly valued, sure, but it's certainly an investment. VTI, for instance, currently yields 1.7% annual dividends, and the companies it holds negate the risk of inflation as they're the companies that charge (inflating) dollars for their goods and services. Gold is an unproductive block of metal that sits there. I'm not saying there's no value for gold at all, I'm saying that it's not an investment in the typical sense. Hold a small percentage of gold as a low-ish correlating asset class to rebalance with? Sounds great. Hold maybe 3-5% of assets in physical gold as a hyper-hedge insurance policy in case the US or world at large collapses? Perhaps a smart move. Holding all one's assets in gold as a perceived investment? No thanks!

Gold, or perhaps, CNY/Yuan

Note that the best economies don't always equate to the best performing capital markets. Investors in China lost quite a bit of money during periods of immense growth. If you don't have confidence in America, you could diversify by holding a portion of money in indexed international funds. But be careful, no one can predict the future! Best to hold a little bit of everything.

granshaw 8y ago
Yup. The "great" thing about the US is that it's a large developed country with a strong rule of law, but at the same time also perhaps the most corporatist country on earth, allowing companies to act with impunity and lobby when needed, all of which leads to big and sustained profits. Compare this to, e.g. Europe.
- Tehchops 8y ago
  >with a strong rule of law Not so certain these days.
  - whitepoplar 8y ago
    Can you give an example of a better-functioning legal system?
    - AnimalMuppet 8y ago
      Canada? Switzerland? Better examples aren't as easy to come by as cynics think. I think the problem they see is that it's worse than it was ten years ago, rather than that it's worse than most other places.

pembrook 8y ago

The question isn't if the region you're investing in is going to have high growth. Most retail investors make the mistake of assuming high growth = it will be a profitable investment. In fact, the companies and countries that are talked about in the press as being "the fastest growing" are typically the worst investments. How is this possible? Because everybody else has also purchased that investment thinking the same thing you are and pushed its valuation beyond even high growth levels.

ta1234567890 8y ago
Sounds like crypto

pm90 8y ago

There are really no other good options. The simple fact is that the American economy, and especially American financial instruments absolutely dominate the Global Economy. Consequently, a long term negative growth in the US would, by definition, lead to a Global Economic Downturn.

ta1234567890 8y ago
> There are really no other good options. This is just BS. There might not be other easy/convenient options for people in the US to invest in other economies, but that surely doesn't mean there aren't any options. One option: gold. Sure, you can criticize gold as an investment all you want (and I'm not recommending it), but it's definitely an alternative to investing (directly) in the US economy.
- namibj 8y ago
  There are Vanguard index funds for other regions, and also iirc some others too. Combine with motifinvesting, and reap the low fees and such. I would certainly run the numbers if they didn't say they don't want me as a client.
- whitepoplar 8y ago
  Gold is not an investment, as it isn't income producing (in the same way that a house isn't an investment). Gold is a speculative instrument.
  - ta1234567890 8y ago
    Sure, but that's the case for almost the whole stock market (in the US) right now. Fundamentals make almost no difference in the stock market today.
    - whitepoplar 8y ago
      It's richly valued, sure, but it's certainly an investment. VTI, for instance, currently yields 1.7% annual dividends, and the companies it holds negate the risk of inflation as they're the companies that charge (inflating) dollars for their goods and services. Gold is an unproductive block of metal that sits there. I'm not saying there's no value for gold at all, I'm saying that it's not an investment in the typical sense. Hold a small percentage of gold as a low-ish correlating asset class to rebalance with? Sounds great. Hold maybe 3-5% of assets in physical gold as a hyper-hedge insurance policy in case the US or world at large collapses? Perhaps a smart move. Holding all one's assets in gold as a perceived investment? No thanks!