I have received a lot of Email recently accusing me of being a fraud and a moron, to put the complaints in a "brighter light". So if you bother to read what I have to say about Investments, please do your own "homework", and use due diligence. And should you decide that I have proposed a good alternative to jumping into the stock market at a time when our government is "Trumpeting" that inflation is near 1%, personal spending has increased, and employment is "gaining"........please be aware, that if what the government is rejoicing about is true, the advice I am about to "give you" is all wrong, and you would do best to purchase stocks, and help re-elect Obama for another 4 years. This said, either proceed to read further, or pop some Jolly Time popcorn, with the marshmallow coating, turn on the TV, and watch the latest addition of "Ice loves Coco".
The Obama government not only has a flag that replaces the stars, of the United States flag, with a picture of Obama, but it is "Trumpeting" that the recession is over, and that the stock market is the way for investors to "move" to "catch" the American dream. Personally, knowing how government runs it own business, I make it a point to see what the government is "pushing", and head in the opposite direction. Government is full of dreamy "Harvard" types who know zero about reality. Take their "Green Energy" theory as example: Obama and his minions want the price of oil and electricity to rise substantially. By legislating the price of these two products up, their "Green", fuel, and solar electric, will look to be market competitive, when in fact these two energy options are not something sane investors would choose to purchase as investments due to the fact that oil is a known fuel, and is relatively cheap, and at the same time, it is used to produce a significant amount of electricity. If something looks to have potential in the Free Market, investors will willingly take a chance and invest in it. But when government has to "Trumpet", and give taxpayer money to companies who want to turn the country "Green", the investment is bogus, and unless government protects these "Green" companies, they will "die", along with your cash. This said, what is a good investment at this time?
There are no good investments at this time. And this is because our government policy is based on a 4 year projection. We are caught in a clash of ideology between those that want to keep and uphold the Constitution, and those that want to rewrite the Constitution. And this "clash" continues, and will continue, every 4 years, until all Americans live by the Constitution, and accept personal responsibility for their own success or failure. It is not the duty of government to "back up" bad decisions made by the citizens. But the current, Obama, "Sugar Daddy" policy is good for gathering votes from citizens who want to live the "High Life" when they can afford only "Beer", and this Up and Down cycle will continue until there are Term Limits placed on all politicians. The small investor doesn't have the huge amount of cash needed to buy and sell stocks on a daily basis, so this investor is looking for stability of government policy, in the long term, and more Freedom to either succeed of fail without unnecessary government rules or restrictions. This said, we live in the "Real World", and must deal with "What Is" instead of "What Should Be".
For the small investor, I see only one option that makes sense, and it isn't gold. Gold is too easily controlled by the government, and this happened in 1935, when the Great Depression of 1929 continued in spite of all the innovative ideas tried by the "Harvard" types. It is OK to have a small amount of gold as a hedge, but don't trust the government. Investors are running away from the housing market because it lost so many Americans their "life savings" and caused such "personal pain". True. But in reality, the losses were mostly on paper, and the pain was caused by persons with a "Beer" budget buying "Champagne" properties. But Today, March 16, 2012, those same homes are selling for less than replacement cost, and this is not "factoring in" for the current 8% inflation rate that makes these homes increase in cost as time moves on (The government pretends, using creative math, that inflation is 1%, but then Congress believes that Obama has shown the world his birth certificate, go figure). Let me see......houses.....things that keep the rain off of peoples head.....and something that most every sane person in America wants to own......and can now be purchased at less than replacement cost....Is this a no brainier or what? What to buy and where to look? Look to purchase a single family, residential, home (No condo's or time shares, or other losers. These may seem cheap, but in the long run, they are "Money Pits"). Buy in Florida. Florida has thousands and thousands of cheap homes. And don't look near the water on either the East or West coast. Why? Insurance cost, initial cost, and taxes. Should you not take my advice, you will find yourself under government control again. Stay inland a few miles. Look for homes from Ft. Myers, north. The prices are so low that you can purchase, and not bother to look to rent it out. Use the property for yourself. Use it for a vacation in either the winter or the summer, and live like a "king". But if you want to rent, this past winter has been especially good for renting. And don't purchase anything you can not pay for with cash. This is "Survival Investing" not speculating. If the economy goes to "Hell", you will have an investment that you can touch, and use for your personal enjoyment. If you hold stocks, how much wall paper do you really want? I have purchased 2 really nice homes, in the past month, completely furnished, with renters in place, for less than $50,000, each. Good deals can be found right now, but once the suckers in the stock market get "hit" again, prices will zoom up. Don't say I did not warn you.
Post Script: If the houses I bought were such a deal, why did the owner sell? These houses were never listed. I was looking at a house nearby, and a neighbor came out and started talking with me. She said that she was just getting too old to take care of her rental houses, and would sell. I looked and bought in 20 minutes.
Lord Howard Hurts