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RVB's Market Musings

What began here as an avenue to interact and learn has far exceeded those goals.

If you are a prospective employer, please consider this site a place where you can see my passion for investing...

Saturday, August 13, 2005

Investment Mindset

Last night I was at a rehearsal dinner with some good friends when, at the table, the topic of gas prices came up (currently 2.59 or 2.69 a gallon, depending on where one lives in the local area). Gas has risen about 40% in just the past year. But, this is not happening unexpectedly, as crude oil is currently just under $67 a barrel (up from about $28 less than 2 years ago).

What was most interesting to me about the conversation was that he brought it up because it was affecting his pocket book. Now, don't get me started on "selfishness and capitalism in general because that is another 40 hours worth of discussion and many, many pages of blogs). But, the point is that he has never once thought about perhaps investing in oil, while prices continually rocket up right in front of his face. If nothing else, he could at least HEDGE his financial situation by investing as little as a hundred bucks in a good oil stock. If the price of the stock continues up, he makes money on the stock, but loses money at the pump. If the stock goes down, he loses money on the stock, but makes up for it by paying less for gas.

This is so simple, isn't it? Why then, do most Americans never make simple connections like these? Simply put, the majority have no Investment Mindset (yet they will bitch when something is affecting them)

I urge everyone to take a little bit of time and read a simple investing book or two. Start thinking about this stuff, even just a little bit, because ignorance is NOT bliss when it comes to your hard earned cash. And the "I don't have money to invest excuse" is one of the worst excuses in the entire world. Stop going to Starbucks everyday - brew your coffee at home in the morning. The 3.50 you save every day working day will become $1000 dollars at the end of the year (Starbucks addictions are almost as expensive as smoking! And, the coffee sucks, too, but because it's the trendy thing to drink, people buy it in droves because it appeals to their desire to be cool. Maybe I should write a blog on our consumption-based economy next?)

The bottom line is that everyone wants to make money - because everyone has money tied up in the markets through various plans (401k, 403b, IRA's, College 529's, the list goes on...) There's no other reason to be in the markets other than to make money. If you can find one, let me know (but you can't do it, can you?)

When you're 50 / 55 and can't retire, it will be nobody's fault but your own. Pay attention to the things around you, and think "out of the box" for a second (I hate that damn cliche but here's a spot where I think it really does work). Instead of hearing about this oil report or that new trend, take it one step further and ask yourself, "Where might the opportunities lie?"


At October 11, 2005 4:00 AM, Blogger gastips said...

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See ya soon.. :)


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