US investments?

[chinamansteve]

Hey everyone,


I currently have $5000USD and im not sure what to do with it. lol.
I'm not familiar with the US market and what kind of funds/stock to invest into. I'm looking at investing the money into something that at least pays dividend (preferably on a quarterly basis or monthly basis), and I'm interested in investing into the market sometime soon seeing that everything is at a bargain. I'm looking at investing the money for more than 5 years since I do not need any of it, I have more USD set aside but this amount is just whats left over in savings. I would say my risk tolerance is medium-high as I'm only 20.


Anyone know as to where I can go to search/research for US funds?

Thanks! :)

[potato]

i don't have much advice because i dumped all my us investments when their dollar went over 1.25cdn. a few weeks ago. I didn't really make much on the investment but I did on the exchange.

i think as the markets start to recover the american dollar will drastically fall.
in a few years because of conversion rates you may really take a huge paper hit on your investments.

just some more info you should research and make your own descision

[Thalo]

You think other countries' currencies are in any better shape, that they would go up relative to the $USD? Even the $CAD is purely determined by what the U.S. can or wants to pay for oil.

In any case, most other countries probably won't let their currencies appreciate too much vs. the $USD because it lowers the value of their loans to the U.S.

[potato]

I pretty much said do your own DD.

Too big to fail. Sounds familiar.

[Hugh Jass]

Stick it in a mutual fund made up of dividend paying large cap stocks, like the banks etc. I would be wary of the US$ ones coz you could lose bigtime if the dollar comes back to parity. As was said previously, the US dollar WILL weaken when the economy gets stronger.

[DanielCarrera]

I currently have $5000USD and im not sure what to do with it. lol.

Give it to me!

I'm not familiar with the US market and what kind of funds/stock to invest into. I'm looking at investing the money into something that at least pays dividend (preferably on a quarterly basis or monthly basis),

No company pays dividends monthly.


and I'm interested in investing into the market sometime soon seeing that everything is at a bargain. I'm looking at investing the money for more than 5 years since I do not need any of it, I have more USD set aside but this amount is just whats left over in savings. I would say my risk tolerance is medium-high as I'm only 20.

On the other hand, your knowledge is low. I recommend that you read Random Walk down Wall Street by Burton Malkiel and then put your $5,000 in a low cost index fund. After you've read the book you'll understand why the index fund is a very good idea.

[chinamansteve]

Stick it in a mutual fund made up of dividend paying large cap stocks, like the banks etc. I would be wary of the US$ ones coz you could lose bigtime if the dollar comes back to parity. As was said previously, the US dollar WILL weaken when the economy gets stronger.

True, there is always the risk of the exchange rate... In any case, im not thinking about exchanging the USD back to CAD as my family do plan to travel at least once a year, and many countries take USD.... but i do appreciate for the advice...


On the other hand, your knowledge is low. I recommend that you read Random Walk down Wall Street by Burton Malkiel and then put your $5,000 in a low cost index fund. After you've read the book you'll understand why the index fund is a very good idea.

Hmm...Ill give that book a try, I've read the wealthy barber and its a pretty good book and ive learned quite some stuff from it. in terms of index funds, i might as well look into index ETFs that pay dividends?




What ive been thinking lately is to maybe invest into Citigroup or Fannie Mae as they're both currently restructuring and are at a bargain right now...

For Citigroup, seeing that the US government currently bailing them out is a sign that the US wont let them fail...and i mean Citigroup is one of the biggest banks in the states... or even the world? any insights?

In terms of Fannie Mae, just recently the CEO or president made an announcement that they will NOT let Fannie get delisted on the NYSE, and they might even do reverse stock splitting to accomplish this. So maybe i can short Fannie. Even if i play Fannie long term, in 4-5 years i feel they will recover to maybe at least $5/share??

EDIT: in terms of online brokerage accounts....I currently have TD waterhouse, and although its all set up...the fee is quite expensive....=S what kidna of investing accounts do you guys use for your stocks?

[sexpuppet6000]

No company pays dividends monthly.






There are companies that pay monthly dividends.

[Thalo]

True, there is always the risk of the exchange rate... In any case, im not thinking about exchanging the USD back to CAD as my family do plan to travel at least once a year, and many countries take USD.... but i do appreciate for the advice...




Hmm...Ill give that book a try, I've read the wealthy barber and its a pretty good book and ive learned quite some stuff from it. in terms of index funds, i might as well look into index ETFs that pay dividends?




What ive been thinking lately is to maybe invest into Citigroup or Fannie Mae as they're both currently restructuring and are at a bargain right now...

For Citigroup, seeing that the US government currently bailing them out is a sign that the US wont let them fail...and i mean Citigroup is one of the biggest banks in the states... or even the world? any insights?

In terms of Fannie Mae, just recently the CEO or president made an announcement that they will NOT let Fannie get delisted on the NYSE, and they might even do reverse stock splitting to accomplish this. So maybe i can short Fannie. Even if i play Fannie long term, in 4-5 years i feel they will recover to maybe at least $5/share??

EDIT: in terms of online brokerage accounts....I currently have TD waterhouse, and although its all set up...the fee is quite expensive....=S what kidna of investing accounts do you guys use for your stocks?


Be sure to keep some of the money safe, if you need some on an annual basis.

If you want to sort of "hedge" against a decline in the $USD you can buy Canadian stocks that are listed on the NYSE. Almost all the bigger companies are. You would also get taxed a lot less on the dividends.

[sexpuppet6000]

What ive been thinking lately is to maybe invest into Citigroup or Fannie Mae as they're both currently restructuring and are at a bargain right now...

For Citigroup, seeing that the US government currently bailing them out is a sign that the US wont let them fail...and i mean Citigroup is one of the biggest banks in the states... or even the world? any insights?

In terms of Fannie Mae, just recently the CEO or president made an announcement that they will NOT let Fannie get delisted on the NYSE, and they might even do reverse stock splitting to accomplish this. So maybe i can short Fannie. Even if i play Fannie long term, in 4-5 years i feel they will recover to maybe at least $5/share??



The bigger they are the harder they fall. The bigger and harder they fall the longer it takes to get up.

You say that they are at a bargain price right now, but how would you know? It is because they are trading for significantly less than they have in the past?

[chinamansteve]

If you want to sort of "hedge" against a decline in the $USD you can buy Canadian stocks that are listed on the NYSE. Almost all the bigger companies are. You would also get taxed a lot less on the dividends.

sorry but can you explain this method :D

The bigger they are the harder they fall. The bigger and harder they fall the longer it takes to get up.

You say that they are at a bargain price right now, but how would you know? It is because they are trading for significantly less than they have in the past?

yeh, thats basically one of the reasons, and just that seeing I'm still young (20) and I practically just got my feet wet in the market (only got into investing for 2 years), I have time to wait for the price to climb back up (if im lucky i have at least 50-60 more years to go lol). Also since the two companies are currently restructuring (and Citi cut 53,000 underperformers) and are being backed by the US government, i feel they are a better company as before? but in any case, even if i do decide to invest into these two companies, I'm gonna wait for the next big dive before dumping money in.



once again thanks for the replies in this thread, im enjoying the views and opinions from everyone. Makes me think that much harder before coming up with a decision.

[potato]

50 years won't matter if it goes to zero.
Which IMHO is very possible.
US is bad and in for some major pain.
US financials, don't even know where to start, even more risky.
They are all essentially insolvent and just scraping by.

I am mostly in commodities and basic materials.
Index funds too.

[sexpuppet6000]

sorry but can you explain this method :D



yeh, thats basically one of the reasons, and just that seeing I'm still young (20) and I practically just got my feet wet in the market (only got into investing for 2 years), I have time to wait for the price to climb back up (if im lucky i have at least 50-60 more years to go lol). Also since the two companies are currently restructuring (and Citi cut 53,000 underperformers) and are being backed by the US government, i feel they are a better company as before? but in any case, even if i do decide to invest into these two companies, I'm gonna wait for the next big dive before dumping money in.



once again thanks for the replies in this thread, im enjoying the views and opinions from everyone. Makes me think that much harder before coming up with a decision.

Just something to think about:
If there is a company that is on the brink of going under; their management failed big time, so to cover their losses they sell as much crap as possible and fire people left and right, even tho it won't cover their asses. Then they go to the bank and beg for loans. And the bank says, 'is this enough?', and they say "idunno, but give me more and maybe ill know'. Would you consider buying and owning this company?

Being 20(ish) myself, I thought I'd be able to invest for the long term, but as the years pile on you find yourself having to dig into your savings. Don't expect to let some money sit for 50 years, you'll need it before then.

[chinamansteve]

50 years won't matter if it goes to zero.
Which IMHO is very possible.
US is bad and in for some major pain.
US financials, don't even know where to start, even more risky.
They are all essentially insolvent and just scraping by.

I am mostly in commodities and basic materials.
Index funds too.

I do have a couple mutual funds that are commodity and financial heavy. in terms of index funds...im looking into that as well, but not gonna make any contributions until i see the market start gettin better so i can hitch the ride up lol. Do index etfs pay dividend or are there no such thing?


Just something to think about:
If there is a company that is on the brink of going under; their management failed big time, so to cover their losses they sell as much crap as possible and fire people left and right, even tho it won't cover their asses. Then they go to the bank and beg for loans. And the bank says, 'is this enough?', and they say "idunno, but give me more and maybe ill know'. Would you consider buying and owning this company?

Being 20(ish) myself, I thought I'd be able to invest for the long term, but as the years pile on you find yourself having to dig into your savings. Don't expect to let some money sit for 50 years, you'll need it before then.


hmm true, but at the same time, some prince and some other middle eastern leaders invested a huge amount into citigroup, im sure they know what they're doing or have connections directly or indirectly (if you know what i mean ;)). In terms of digging money later on, i actually have a bunch of other savings, in money market funds, dividend paying mutual funds, as well as GIC, so i am quite diversified, so if anything i can pull money out of those vehicles. i am lookin into acquiring a property as well (yeah i know i have a lot of plans lol) and renting it out for a couple years until i get to my late 20s and/or have a family of my own, and then moving into the house myself, that way i get my mortgage paid by the tenants for the couple years. Im just waiting for the housing market to go down a bit more, ive spoken with a real estate agent and she said she expects the market to continue going down in the next year or two, so somewhere along this time i will most likely be purchasing a property. (and in terms of the down payment, ive got that covered :D)

[Thalo]

sorry but can you explain this method :D



There's really not that much to it. Most big Canadian companies are listed on the NYSE. Their stock prices keep in line with the exchange rate, so if the $USD goes down, then the stock price on the NYSE goes up, all else being equal.

[chinamansteve]

There's really not that much to it. Most big Canadian companies are listed on the NYSE. Their stock prices keep in line with the exchange rate, so if the $USD goes down, then the stock price on the NYSE goes up, all else being equal.


oh i see, so if i invest a part of the 5000 into let say RY, and the rest into whatever else, at least i have some shelter from the exchange rate...hmmm seems cool, ill check that out. thanks