October could get ugly
http://www.marketwatch.com/story/an-alre...?dist=countdown

If there's an oil glut coupled with waning global demand then why haven't retail gas prices gone down significantly?

Because the US dollar is increasingly worthless.

The article makes the opposite case- the dollar is strong, there is a glut of commodities.

The dollar is sound. The reason why I know this is because there's all kinds of people who want my dollars coming after me, always something being advertised and pushed at me wanting to separate me from my dollars. It's not usually my personality or company they want. If anyone wants to alleviate themselves of the liability of holding their dollars, it's quite easy to imagine how many people out there would be glad to take them.

But remember that these things tend to be cyclical. Stocks up, gold down, or vice versa when investors jump when one is up while the other is down. When a big IPO pops, the stock price surges then plummets because all the initial speculators who got in early have made their money and then are quickly cashing out.

Likewise on a macro scale it works kind of in a similar way, a bull economy runs too hot, investors back down, triggering a bear cycle. Things settle down and become cheaper, then buyers jump in, it starts the cycle all over again.

By the way, Google has a nice portfolio calculator tool that allows you to create hypothetical portfolios so you can compare your investing strategies with market performance. No risk.

Apart from that, funds are probably the best thing for non-professional, individual investors, the small investor simply does not have the experience nor the data they have to 'beat the market'. The old cliche applies though: it takes money to make money. The more profitable hedge funds aren't accessible to small investors, having an initial investment commitment of $200,000, they are managed by the sorts of people who have been at the game professionally for decades, but they might return up to $10,000 profit with a couple of years. That's way better than any individual stock or commodity any of us are likely to pick.

If you had lots of money, buy prime commercial real estate, office parks and buildings. That's what really rich people do, aside from investing billions of dollars in startups.

A return of $10,000 dollars after a couple of years for $200,000 is not something I would call professional. My personal experience was double that amount in one year and even that was a relatively safe fund.

About the market, I'm severely jaded. I'm managing my own portfolio of stocks in the U.S. and I'm not fazed by the market's state today. I have a graduate degree in finance, but still, even with all the simulations, and everything else I learned in the academe, I wound up implementing the strategy I came up with before I took the course.

I also don't know why anyone has to set the goal of beating the market. If I'm getting enough gains that I'm satisfied with that's enough for me. Well, there was a time when my portfolio beat all the U.S. indices, but they're just extras.

Well, it depends on the investor- how aggressive their positioning is and their appetite for risk. This is not an absolute standard by any stretch, but in either case, individual stock picking by small investors will probably never do that well. The average person could not simply do as well spending their time researching the market, even if they had quit their full time job to do it. So yes, that is a better return than what small investors can expect just picking stocks.

Yes, oh dear, oil has plummeted to $91 a barrel, a drop of 3.5%.

Converted to gas prices, that means a drop of about 16 cents if it was a 1:1 relationship, which it is not. In reality you'd see a drop of less than half that if you're lucky, and only if the price STAYS at $91 or drops lower for a significant amount of time.

That's because oil companies work like banks, which make you wait X days after a check is deposited to "clear" yet takes the money out of your account immediately, so if you write a check to your friend there is this gap time where you don't have it anymore and your friend doesn't have it yet. If the price of oil goes up, the gas prices immediately respond upwards because "they have to buy the oil for tomorrow's gas today". Yet if oil prices drop, it takes months as the supply of gas made from the cheaper oil works it way through distribution.
Oil companies of course pocket the difference.



The Jedi Master