Whats the best way to invest a small amount of money?

Uniquack · Coal Joined: Mar 09, 2008 Posts: 11

Just as an interesting aside, today I calculated the percent of the fall of the Dow in 2000 and compared it to the current situation. Take a look at http://finance.google.com/finance?q=.dji&hl=en&meta=hl%3Den
and move the left slider below the graph all the way to 1980-- you can see that the precipitous drop that started in 2000 dropped over 3993 points and that was mainly because of the collapsing dot com bubble.

Far more money has been created since then in the FIRE sector bubble, and far more can be lost, yet the DJI has only dropped 1949 points! If the 2000 plunge lost 34% of its high value, so far the current market has only lost abbout 14% of its value. It could easily lose at least another 2842 more points to even reach a 34%, which would bring the dow to 9302.

So yes, I think it's important to get out of most of the stock market, especially those sectors that are very exposed right now. As business investment drops and fewer shoppers are buying, technology demand will drop precipitously.

The numbers:
pre 2000 high: 11522
post 2000 low 7528
difference =3993
pre 2008 high: 14093
as of 3/13/08: 12144
difference =1949

Taking it as a given that the market has a lot further to go on the downslope, much money will evaporate in lost value, but much will also be frantically seeking new, more stable homes. New bubbles may even result from this in the long run (see the recent article in Harper's about alt energy stocks being next), but in the short term (the next 3-4 years, say) the historically safe and recently illustrious rise of gold will glitter in many a frantic eye right about now. So I think gold is still a safe bet.

Again, even if that's not true, and the absolute value falls, gold's value relative to the dollar will climb because the dollar's value will fall. No numbers to back myself up on this, of course, but it just makes sense to me intuitively.

When it gets above $1700 or so, then I might consider getting out just before the "smart" money also bails. And where will those super elite be putting their money then? In the bottomed out real estate market again, but this time for agricultural land on which to put a new class of credit-card indebted serfs?

Mr-Eagle · Coal Joined: Mar 14, 2008 Posts: 3 Location: Netherlands

Hi bike756

I'm a 17 year old student from the netherlands, I also have a small amount of money to invest..

My advice to you is not to spend all of your savings, you can prepare without spending your savings :D.. Perhaps you could make a plan.. for example.. if you spend 50 $ a month to prepare, you can continue your normal life, but also prepare for the worst..

I also did that.. I spend 50 euros a month to buy silver, survival/camping bagpack and to build a food supply..

I've been doing this for about 6 months now.. I currently have 45 ounces of silver, a one month food and water supply and a bagpack full of survival stuff for if i need to leave in an emergency. I did all this without using my savings.. I have about 1500 euros of savings, and i earn 150 euros a month.

joeltrout

madison · Heavy Crude Joined: Mar 12, 2005 Posts: 247

Being poor myself, I have very small amounts of cash to use.

I buy seeds and know how to save them. Books of all sorts, and Archival Mist to preserve them so they are readable in 20 years. Gardening supplies - container gardening ala Square Foot Gardening style. Rechargable batteries and a solar charger. Solar showers. Classes and workshops. Traveling within a few hours of home to see new things like cob cottages and permaculture intentional communities. I also buy stuff that goes into a bin - sewing needles, fish hooks, pocket knives, unbreakable water bottles, whetstones, matches, etc. Wool socks and underwear, long underwear, hats and gloves. Bike tires, repair kits. Nails, screws, superglue. Waist packs and back packs in good shape from Goodwill, warm blankets and a couple of good sleeping bags and camping gear. Parabolic lighters.

I also stockpile coffee because I love it!

Small stuff, a little at a time. Someday my kid or I may need it or use it as trade goods.