Is investing in cash US dollar a good idea?

Anis asked: the US dollar a good investment? when all the trouble with iraq dies down the dollar should re stabalize? somebody let me know? alternitively of a better investment? long or short term?

surfinthedesert answered: No, investing in cash is never a good idea. The dollar is devalued year after year without fail due to inflation (and other factors). You should at least try to earn interest on your money (enough to surpass inflation). dont invest in the dollar the american economy is struggling… however the dow jones and the standard and poor’s index, which are indices that are composed of large cap and med cap companies, have been performing sightly better recently. Investing in a commodity such as cash or eurodollars is not a way to make money as the return is very small compared to that of securities/ equitys. If you have a small some of money the best thing to do intially is to try and find a product that has a tax free shelter, in the Uk this is known as an ISA.. im pretty sure in the states you have something similiar. This is the first step that you should make if you are wanting to create a portfolio.. as any gain with regards to the cash side of things is tax free however the equity is open to capital gains dependable on you tax bracket. If not this then some form of investment trust….and find a good fund manager that has a diversified portfolio and a good forecast on growth

Narki answered: A pretty safe long-term investment is equities (shares), especially in blue-chip companies. Long-term, by the way, is 10 years or longer. The year-on-year return of the Footsie100 averages 12-13% annually, the Dow-Jones equivalent similarly.

A spread of companies, at least ten, is better than one or two, to spread the risk and if you do not have a substantial amount of capital to invest from the start, a monthly savings plan into a Footsie100 tracker provides the advantage of pound-cost averaging to your investment plan until you build up a reasonable capital sum. Thereafter minimum investments of £1,000 per company reduces the initial costs; the more you buy the less you pay per share to purchase.

Do not start unless you know for certain that you can carry through your investment programme for the requisite term. Stopping a monthly plan will cost you money, having to sell shares when the market is low will cost you money; buy low & sell high. Putting money into e.g.dollars is not investing it is gambling. Only gamble if you can afford to lose money!

By Alexandre Laurent

Alexandre Laurentl is working in the jewelry and investment gold since 2002. Alexandre graduated from The Normandy School of Business and from the University of Perpignan a Bachelor of economics in 1995.

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