47 posts tagged “investing”

While I am a firm believer in sustainable, organic farming at the local level, Globalists have a totally different perspective. They believe in corporate farming using pesticides, herbicides, hormones, and genetically modified seeds.

At the G8 summit (summer 2009), Globalists highlighted the underinvestment in agriculture in emerging countries. Recent estimates from the Food and Agriculture Organization, which is a division of the U.N., estimated that nearly 1 billion people would go hungry in 2009.

So here are my suggestions on how to profit from the need to grow more food globally. Invest in JJA ($44.66) – an index composed of seven futures contracts, soybeans, corn, wheat, cotton, soybean oil, coffee and sugar. Another good one is MOO ($42.54) – it invests in big agriculture names such as ADM, Monsanto, as well as fertilizer companies.

Retire

Mainstream media continues to state that traditional IRAs are tax deferred until retirement. Well, that depends. If your IRA owns mortgage-leveraged real estate, you owe UBIT.  If your IRA or 401(k) owns an active business structured as a pass through entity (such as an LLC or partnership), you owe UBIT.  UBIT, or Unrelated Business Income Tax, applies to tax exempt organizations including retirement plans. To pay UBIT, Form 990-T must be filed with the IRS.

Gold is a very popular investment these days. Is it possibble to own collectibles such as art, coins, and  physical gold inside an IRA? No. When an IRA purchases a collectible, the amount used to make the purchase is treated as distribution to the owner. It is included in the owner's gross income, and if the owner is under age 59½ and does not qualify for one of the exceptions, a 10% early distribution penalty is imposed on top of the income taxes.

Governor

A governor, or speed limiter, is a device used to measure and regulate the speed of a machine, such as an engine. I have taken that concept and applied it to finance. You put in place a governor that limits the speed at which you could potentially lose money.

Here is how I apply it:

• I try not to buy disposable products. Why throw money in the garbage?
• I place stop loss orders for every stock/ETF I own at 4.5% below its cost basis. My upside is not capped but my downside is.
• I play video poker with a $2 bankroll. If I lose it, I'm done. But I have the potential of winning much more with 4 deuces or a natural royal flush
• I use alternative income streams rather than bet everything on a single business venture. Collecting  aluminum cans, getting paid to read email, getting paid to watch Internet ads, getting paid to search, and getting paid to post tweets has no explicit downside risk

IMHO, US Treasuries are the next financial bubble to burst.

1. The Fed has been buying Treasuries bonds in an effort to lower borrowing costs and end the worst U.S. economic downturn in 70 years. Its holdings of Treasuries edged up to $759.80 billion from $757.77 billion last week. However, the Federal Reserve's program of buying Treasuries will end in October.
2. Even the Chinese, one of the largest buyers of Treasury securities, are buying fewer treasuries. They are buying gold with their US Dollars.
3. Yet investors are making huge bets on bonds. In the last six months they have allocated double the amount of new money to bond mutual funds as they did over the entire four years from 2003 through 2006! All academic studies agree that poor market timing decisions are the rule rather than the exception among mutual fund investors.
4. Besides that, the federal government actually needs high inflation down the road. Why? So they can pay off this low interest debt with cheapened dollars. Debtors gain during inflationary times.
5. It's not just me questioning the current price of treasuries.
   

Looking at the next 18 months, I see higher yields on the 10-year and the 30-year. Bond prices fall when interest rates rise. With fewer buyers and a falling US dollar, higher rates are inevitable. Get into TMV or TBT while they are on sale! My earlier posts on bonds should help you.

I talked about water being the new blue gold. It is more precious that oil, yet grossly under priced. Since I made the call on June 11th, CGW has soared from $15.95 to $17.53 - a 9.9% gain. Plus you get a nice dividend at the end of the year - 7.36%.

You can learn all my stock secrets by ordering "Computerized Tools For Profitable Investing" Just click my donate button in the sidebar.

The picks I shared with you on this blog included the following tickers - DGP | GAZ | TBT | DXDDX.

Here were my original posts so you know I'm not just faking things and you can get some further analysis:
how-to-play-the-demise-of-the-us-dollar | where-should-i-put-my-money | where-should-i-put-my-money-part-2

Based on the date of those original posts and Monday's closing price, here is what they did:
DGP went from 19.75 to 23.35
GAZ went from 16.11 to 15.92
TBT went from 46.30 to 46.20
DXDDX went from 20.98 to 23.60

A 5.75% gain if you owned all of them.

Stay away from GAZ because of the crackdown on commodity based exchange traded funds and notes. Replace it with a natural gas company like CLNE or CHK (both of which I own).

Start averaging into TBT. I'll explain why you should short the Treasury market in a future blog post. 

Firecalc

Thinking of chucking it all and retiring early, long before you start getting a pension or Social Security, and before you have ready access to your 401k and IRA?

Better run through this calculator and get a dose of reality.  http://www.firecalc.com/