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I For Sure Don't Understand Investing
by James Glaser December 10, 2008 I have bought some things in the past thinking I could resell them and make a profit. That didn't always work out the way I thought it would, but many times it did, and I turned a profit. The thing is though, every time I invested this way, there was a potential for a profit. Yesterday, in the New York Times there is a story about how U.S. Government Bonds are paying out a negative yield. That means going in, the people who buy these bonds know they are going to lose money, in fact there is no way they can make a profit.
Did you get that last part? "Losing only a small amount of money on an investment is tantamount to coming out ahead." Who are these people? If they didn't invest their money at all and just sat on it, they would have come out even, but no, they bought U.S. Government Bonds, and paid money to do it. Now listen to this. Our government sold 30 million dollars worth of four week bonds yesterday, and those bonds paid 0% interest. Now you know that is a lose-lose transaction. The people who invested had to spend some money buying the bonds, and our government had to give them some sort of paperwork. On top of that, the Treasury Department has to monitor the paper work and issue a check after the four week period is over. Tell me now, is all of this called "busy work"? Lots of people moving money around, with nobody making any money for all their work. I must say, I don't understand this kind of investing. Are these people completely stupid, or do they know something we don't know. Either way, this type of money trading shows us one of the reasons we are in the financial fix we are in. |
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