Rob Black & Your Money

Understanding Investing - Invest in San Carlos California or San Carlos Costa Rico

8/17/2011 by Rob Black

Understanding Investing - Invest in San Carlos, California or San Carlos, Costa Rica

 

Pretty big difference on where your real estate would play out.

 

To be a successful investor you have to learn that assets differ like gold and clay. Investments include but are not limited to stocks, bonds, cash, real estate, commodities, baseball cards, art, etc . . . If you have time than picking the right asset is more important than picking the right price. I personally like stocks, bonds, real estate (prefer publicly traded REITs over personally owning a mortgage) and commodities. I really wanted to write a quick piece that was slapped together to highlight commodities as they are the toughest area for some new investors to grasp.

 

My belief is that stocks are all about diversification (size, style and location) and having the time to let them work (5 years minimum). Size of stocks refers to large capitalization, mid-sized capitalization, and small cap. Style is usually growth (revenue growth, earnings growth) or value (good not great earnings usually and pays most earnings back to you in a dividend). Location is usually broken down in Asia excluding Japan, Europe, United States, emerging markets and Latin America. So since I have time my stock portfolio has a little bit of all the above including size, style and location.

 


I think commodities should represent 5% - 10% of a typical balanced account and as much as 15% for aggressive investors. Commodities generally are thought of to include metals, energy, and agriculture.

 

The outlook for hard assets is promising, given low interest rates and weak currencies in major industrialized nations. Right now most forecasts that I see have the price of crude oil averaging $98 per barrel in 2011 and $102 per barrel in 2012. I look for a trading range of $80-$160 through 2012. The current price is $87.

 

Most economists forecast that gold will average $1600 per ounce in 2011. The top of our fundamental range is $1700, but volatile swings in the market can send the price higher. The current price is $1787 per ounce. Other commodities that look to be in favor include industrial metals, corn and wheat. Commodity prices at risk include natural gas and rice.

 

This is a super quick thought on understanding investing so please be careful and consult a broker/advisor near you before buying/selling any type of investment. Investments carry risk.

 

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