Stocks rose worldwide, driving the Standard & Poor’s 500 Index higher for a third day, as gains in metals boosted the profit outlook for raw-material companies. Gold climbed above $1,000 an ounce as the dollar fell.

Gold has shined  as a relatively good safe haven.  This should not change with the blatant overboard anti-deflation moves of the Federal Reserve.
So with this in mind how would one invest in gold in today’s market to take advantage of any such moves?

Well you can listen to the daily infomercials on the radio or television and begin buying gold bars and storing them at the bank or under your mattress.  Or there is a much simpler way that I recommend, which is to invest in ETFs that track the price of gold.  Who wants to lug around big bars of gold to your bank anyways? And then pay the fees associated with storing your gold?  Things are more sophisticated now, we have thankfully moved on past the days of the 49ers.  Just go online to your online broker and buy ETFs such as GLD, which will give you the same price appreciation as those bulky bars without the hassle.

There are a lot of options as well in the precious metal ETF category that you may like such as “Double” ETFs, which double your gain or loss based on the price movement of the metal.  Or you could go the other route by getting “Inverse” ETFs that go up when the price of gold goes down.  I will explain these more in another post… for now take a look at the Precious Metal ETF Map that I put together by clicking the image below. Let me know if I missed anything! Hope you like it.

(2 votes, average: 5.00 out of 5)

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I have had some people asking me about the Roth lately so I thought I would put together a few posts about it.  There are a lot of confusing articles out there about Roth details and also what the upcoming changes are in Jan 2010.  And because of the density of material concerning a Roth IRA I decided to break it up into 3 posts that will get more advanced chronologically.

First off wikipedia has a great background/definition on the Roth that I don’t want to fill this post up with.  So here is the link for reference.

With all the concern regarding the instability of Social Security and the lack of choices in people’s 401k’s, people are searching for ways to secure their financial future.  The Roth IRA gives you the ability to invest your after-tax dollars today, let the investment grow tax-deferred, and take qualifying withdrawals tax-free.  Okay I know that was a mouthful… I won’t leave you hanging.. let me break it down.

1. Ability to invest your after tax dollars today – Meaning this is the money that has already gone through the tax monster and hit your bank account.  This is an important distinction because a Traditional IRA gets the money before the tax man.  The advantage with the Roth is that the principal amount is never subject to taxes or penalties in the future, as long as you stay within the contribution guidelines.  In a Traditional you get hammered by the tax man when its time to pull out and the worst part is that you are usually at your highest tax bracket when this time comes.
2. Onto growing tax-deferred;  this means that the money in your Roth account is not taxed at the end of the year when you have capital gains, dividends, or interest.  So when you have that 50% gain from your wise investment choices Uncle Sam can’t touch it!
3. Lastly taking qualifying withdrawals tax-free.  I have to make one thing clear and that is that all your direct contributions (a.k.a your principal) can be pulled at any time tax free without reason, where a Traditional IRA will nail you with taxes and penalties.  There are also opportunities where you are able to take out principle and earnings tax free.  For this you need to have your Roth open for at least 5 years and second the withdrawal must be made after the occurrence of one of the following events:  (a) age 59 1/2  (b) death  (c) disability  (d)  first home purchase

Continued on full post…..

This is the number one question I get all the time once people hear that the

past2 years have been the best trading years I have ever had.  I get the look of  “um yeah your full of  s$%#” so I have to show them.  Shorting stocks is not hard and yes there is risk, but how risky has it been going long the past year or so?  And a plus of the downside is that stocks go down a lot faster than they go up.  For instance in March we erased all of the gains from 1996-2007 (11 Years) in the matter of 1 year and 5 months.

I’m going to keep these 3 ways very concise and open for discussion.  Easiest to complicated:

1. Buy inverse ETFs.  Advantages:

• These have the same great characteristics of ETFs and you can purchase them just like any other stock or ETF throughout the trading day.
• There are even inverse ETFs that are double or triple leveraged, which means as an example if the S&P500 goes down 2% on a given day and you owned SDS (double short S&P) you would make 4%.
• Another great advantage of investing in inverse ETFs is that you can buy these even if you cannot have a margin account, such as in your tax-deferred savings accounts (401(k), 403b or IRA)

Here is a link to the Proshares list of inverse ETFs they cover every sector that you can imagine:   Proshares

2. Short stocks straight up.  This requires a margin account.  The pluses are:

• You don’t get any price nuances, which happens sometimes in the inverse ETFs, where an inverse fund isn’t exactly performing as well as if you shorted directly.
• Still very easy to do using most online broker consoles instead of selecting “buy” a stock select “short”

3. Options.  This requires the ability to trade options with your broker, which usually means some extra forms to fill out.  Advantages:

• Leverage – You can put a smaller amount of money down for a lot more action.  This can also cut against you and most options are not for the faint of heart with the price swings that occur in a given day.
• Use options to hedge against your long positions.  Say you have 500 shares of SPY.. you can buy 5 covered puts to help cover your downside without putting up the price of 500 shares of SPY.
• This section has way too much info on it… books upon books of strategy  including names that you would see in your biology book like condors and butterflies….so I’m just going to leave it where it is… and I can post more details on options another time.

(5 votes, average: 4.80 out of 5)

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Most 401k programs out there don’t allow the investor to have very much flexibility in terms of investments.  This is especially true with the ability to short the market.  When confronted with a bear market 401k investors are forced to flee to safety in very low returning “savings account” type funds.  This should not be your only option.  Opening a separate individual account online is very simple with today’s user friendly websites and opens up the world of shorting to anyone.  This gives an investor the ability to at least hedge against a falling market and maybe end up making money in a down year.

To put this in simple terms; lets suppose you have a 401k through work with $50k in it at the beginning of the year…