Money & Investing - Banks.com

While many investors have their eyes full of gold, some investors are turning toward silver. It’s hard to ignore the fact that gold is still sitting above $1,100 an ounce. But some argue that gold is already near its high for now, and that, even if it goes higher, it might not provide the kind of returns that have been seen the last couple of months. Instead, say some investors, it is time for silver.

Indeed, silver often out performs gold as bulls in the stock market gain the upper hand. MarketWatch reports on silver as an investment:

Silver is a precious metal, after all, one that has historically outperformed gold in a bull market and doubles as an industrial metal — and supplies of it are depleting at a much more rapid pace.

“Silver is unique in terms of being both a monetary and an industrial metal,” the Bullion Services Team at GoldCore said in a recent report, pointing out that it’s severely undervalued. “Silver remains the investment opportunity of a lifetime.” …

“Silver is highly correlated to the safe haven of gold and is, in effect, a leveraged sister of the precious yellow metal,” according to GoldCore, an international bullion dealer. “Thus, informed investors use gold more for wealth preservation purposes and silver in order to make a return.”

It’s an interesting thought. With many investors turning toward precious metals as U.S. economic fundamentals erode (recent reports showed another increase in the trade deficit, investors look for more tangible investments, eschewing the dollar.

Even if you decide that investing directly in silver is not for you, there are ETFs and other instruments that make it relatively easy take advantage of rising silver prices — if they really do materialize.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Image via Wikipedia

One of the questions that many people have when it comes to look at how much return they are getting on their bonds has to do with the way the information is presented on the Savings Bond Wizard offered by the Treasury Department. One point of confusion has to do with the way I-bonds are presented, especially with regard to the term “yield.”

When the Wizard uses the term “yield”, it is referring to the average rate of return up to the present point. It is not actually referring to the current yield on an I-bond. It means the average rate of return up to the current point, over the life of the bond. When you see the “rate”, though, it means the current six-month period rate. I-bonds have two different rates, with a fixed rate for the life of a bond, and the inflation rate, which is adjusted in May and again in November of each year. So, if the current rate is higher than the yield, it is an indication that the rate is up in comparison to the average yield you have had over the life of your I-bond.

An I-bond is just one of the Treasury bonds available for investing. These are loans you make to the government, and the government pays you interest. I-bonds are protected from inflation. You can purchase them through Treasury Direct. It you use an electronic account, you only need a minimum of $25 to get started. Bonds offer relatively low returns, but they aren’t too bad. The current rate on I-bonds is 3.36% through the end of April — not too shabby for such an investment.  Better than a high yield savings account.

Bonds can make a good addition to an investment portfolio in need of a little shoring up for safety, but it is important to realize that you will get slow growth on bonds, and that if you want higher returns, you will need to balance things with other types of investments.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

Image via Wikipedia

Investors are enjoying some optimism in early trading today as they greet positive economic data with enthusiasm. The U.S. stock market is moving higher today, across the board, as investors react to reports that the U.S. economy expanded in the third quarter of 2009, signaling the technical end to the recession. Credit is being given to economic stimulus measures that helped start some economic activity.

MarketWatch reports on the enthusiasm some have for the economic stimulus measures:

“While it’s far too early to declare ‘mission accomplished,’ it is crystal clear that the Recovery Act was crucial in pulling the economy out of its tailspin and putting it on the path to growth,” said Josh Bivens, an economist for the Economic Policy Institute.

Clearly, though, there is a long way to go. The economy needs to be able to continue to move forward with recovery without additional stimulus from the government. Also, there are concerns about employment. This is having a somewhat restraining effect on what could have been a runaway rally today. But, since employment is showing a slight improvement this week, and since lack of jobs helps company bottom lines in terms of cost cutting, this is probably not going to have a huge impact — at least for now.

Buying stocks

Obviously, the time to buy stocks was months ago. But with the economy heading higher, there is still time to get some good bargains. It is a good time to look for solid income investing stock opportunities, as well as choosing some good fundamentally sound investments that are likely to grow. Many people are also deciding to get into index funds and ETFs right now.

For those that have increased their contributions to investment accounts during the recession, it might be time to consider backing off a bit now that you can’t get as much for your dollar. Although, if you can afford to keep putting in higher amounts, it’s probably still worth it.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.