I’ve got a 401K that I can’t do much with, so that will stay diversified in bonds,small and large cap, and international. I’m still in my 20s, so I’m not going to concern myself much with the fact that it may lose some significant value in the coming year or two.

For my other investment money, I’m preserving what money I have by investing in foreign currencies (Euro, Swiss, Swedish) and gold. I like the Merk Hard Currency fund, but the expense ratio is kind of high (1.3%). The fund is up 12%+ YTD, but it should be relatively low risk. No other fund like it though – the other dollar short funds are more risky, but could suit your needs (Pro Funds, Ryder, Templeton).

I also play around with a smaller amount of money. Right now I’m in energy but looking to possibly take some profits. I’ll play until the end of 2007, then probably go even more conservative with everything. Once the China/India bubbles pop, we’ll see a worldwide sell off. Not sure when it will happen, but just waiting like I am with real estate.

I just got back from Zurich and opened a Swiss bank account in a small private bank. They don’t do loans of any kind and have a 75% liquidity ratio. I have yet to allocate all of my funds because I am waiting for a few market moves but my investments will be as follows:

70% Euro 3 month paper
10% Yen
20% Gold

Back here in my trading accounts I will play in commodities(energy and grains)and some shorts.

Short of visiting Credit Suisse in Zurich, is there a way online to open a Swiss account and convert US$ to Euros?

We will not solve this here.

Investment advice will always be controversial. Variations in short-term markets will prove fools to be geniuses and vis versa.

That being said, I feel compelled to respond to this blog.

In my opinion, investing in foreign currencies is a poor strategy. Currency markets are a zero sum game. It is fraught with hazard (it has bankrupted giant banks). If you believe that you can outwit literally thousands of full-time currency traders at the game they rig — go for it.

On the other hand, foreign (international) stocks are not a zero sum game. They represent an ever-expanding (I hope) world economy. In the long run they should be excellent investments when paired with holdings in the world’s largest economy, the US.

In World history since the industrial revolution, stocks have been the preferred investments. There is no reason to expect a change in the future. Forget the numerous naysayers — I’ve already heard them all. The vast majority of reputable advisors will agree with my opinion.

I will refer the young, the naive, and the misinformed to a site put out by Ken Fisher Investments. Mr. Fisher may be more informed than you. He is a billionaire investor. He has written an investment column for Forbes Magazine for 25 years. He runs one of the more successful private investment companies (I’m a very happy client).

The short advice:
Don’t bet on foreign currencies
Don’t buy gold or commodites (though gold stocks may be worthwhile)
Don’t buy bonds when you’re in your 20s

http://www.marketminder.com/

I don’t know if Rich agrees with me. From lurking here over the last year and now finally posting, I have come to highly respect his real estate insights. I would love to hear his opinion.

Contrarian,

I 100% agree. You’re not a “contrarian”, you’re simply the voice of reason. OK, you maybe are one on this forum 🙂

Many people chase the latest investment fad, which these days is commodities and foreign currencies. Most young people should be just fine with a few index funds, and not sweat it too much. Gold has been a terrible long-term investment, and unless you think USA is going Zimbabwe, there is really not much reason to own gold. Ever. It is billed as “safe”, but it’s probably the most speculative investment someone can make. For everything else (stocks, bonds, real estate) you can have some idea of its value based on the underlying cash flow. Gold? For all I know, it could be worth a million dolar an ounce, or just a hundred. I don’t know and I don’t care. The point is, there is no long-term income from it, so its value (to me) is simply a random number on a Bloomberg screen.

PS: not a big fan of Mr Fisher’s firm though. They keep writing and calling me in the hope that I’ll have them manage my money 🙂

stocks in high tech. The weak dollar should make these companies number shine. Also, lots of acquisitions I'm guessing.

http://piggington.com/gold_is_a_bubble

Here is Mr. Toscano’s view of gold.