Jayson Hickey emails:
I have a son who has just graduated high school and wants to save and invest the money he received from family at his graduation party.RW response:
I'm curious to what investment vehicle he should start his investment portfolio.
Should he put it in a money market type fund and add to it until it grows to a certain amount? Should he subscribe to EPJ Daily alert and start a brokerage account?
My 50 year old self would tell my 18 year old self to put money in funds that are performing well, like defense, alcohol, guns, and gold. As it is the most practical advice I can give to him is spend less than you make and save the rest.
His goals are to invest in real estate and businesses that have potential for growth.
Any advice is greatly appreciated.
There is no easy answer to this question.
We live at a time where normality has exited the country. In the EPJ Daily Alert, I tell subscribers that visibility, at best, is only three months to six months out.
Irresponsible Federal Reserve money printing is driving the current advance in the stock market, gold and silver. The threat of accelerating price inflation to the 5% annualized range, maybe even more, appears very real.
On the other hand, a shift in Fed policy, or even a slow down in the money pump could make investments in the stock market, gold and silver a disaster.
Don't blame me for these uncertain times, blame the Fed, blame Treasury Secretary Mnuchin and the economic ignoramus in the White House.
So I would tell your son to invest in books and read them about how the economy works so that he can anticipate how things might develop but this requires a lot of effort.
Murray Rothbard books are a good start:
What Has Government Done to Our Money?
The Mystery of Banking
America's Great Depression
My book on the Fed explains what a fraud it is:
The Fed Flunks: My Speech at the New York Federal Reserve Bank
Peter Lynch books are excellent at explaining how to invest in the stock market, but he says nothing about periods when it makes no sense to invest in the stock market:
One Up On Wall Street: How To Use What You Already Know To Make Money In The Market
Beating the Street Paperback
The EPJ Daily Alert is aimed mostly at investors who have portfolios at a minimum of $5,000. Many have much more. But there are some of college-age who subscribe to better understand what is going in the economy and how to think about these things.