$20,000 to invest: What to do? - Page 2

Well, let's try to be as accurate as possible. If you're talking about an indexed buy and hold strat for the U.S. equities markets, you would have to amend that statement to read "a 40 year investment may return close to 10% annually"

TraderNik gave the best advice IMHO.  I don't think buy and hold or any other traditional/conventional strategy is applicable in todays markets.  The markets are much different than they were twenty years ago and require a much different approach.  I would learn to trade the market.  This requires both long/short strategies as well as being dedicated to doing in depth research and analysis.  If you learn this skillset at your age and are disciplined with how you risk your capital you will set yourself up to live long and prosper.

What makes you so sure?

Trading is the ultimate test of individual judgement. Decisions are evaluated by measuring one thing - equity. There is no one or no thing responsible for my equity, except me and my decisions. There's nothing 'sure' in trading, except that bulls make money, bears make money and pigs get slaughtered. I used to think this was a corny bit of rhetoric, but I've learned over the years just how true it is. I didn't say I was sure. My statement reflects my belief, a strongly held belief.

I'm going to short gold if and when I see the type of trading that characterizes the top of a bubble. This may or may not occur. One look at the last gold bubble shows that there were plenty of good short entries available after the last blowoff. The risk/reward has to be skewed very high in my favour for me to enter this trade. If my conditions are met, I will short it and place protective stops. If I get stopped out I may look for a new entry, or may not.

There's nothing new in the markets. They've been acting the same way since the first rice futures were traded, a very long time ago.

Do you know who Stanley Druckenmiller is? If not, and if you're interested in trading, I strongly suggest you get some information on him and read his story. It might give you some insight into my statement about gold. Please remember that you can short gold here and lose not only the capital in your account, but be liable for theoretically unlimited losses on top of that.
Edited by tradernick - 9/9/11 at 10:08pm

I have successfully shorted several bubbles myself, so I know the timeless psychological aspects quite well.
As you implied, gold can go to $5000 before it hits $1500 and we've seen nothing remotely resembling a exponential blow-off top yet.
You just seemed very confident about the $1500 mark, which is what made me comment.
Edited by Reevolving - 9/10/11 at 9:46am