What Type of Investor are you?

To me there are three types of investors:

1) The first group is a collection of people we'll call the "go along, get along" group. This is by far the largest group of investors. They invest by their broker's "ideas" and buy into the talking heads on main stream media. There are some problems here. A stock broker is paid to move stock and generate commission. This is a built in conflict of interest. Once a stock gets on Cramer's "Mad Money" or gets written up in Forbes, it's already old news. Chances are all the large profits have been made.

2) The next group is called the "dice rollers." They buy touts from telephone sales people and haunt financial chat rooms looking for the home run. These are the people who are the opportunity seekers and send away for the kit guaranteeing a 6 figure income while sitting in their recliner in the comfort of their homes. There isn't much one can do for them. They will either learn their lesson on the cheap and reform, or they will lose all or most of the capital that they have. The will be a small, and I mean very small, percent of these types of investors who will hit their home run and profit accordingly.

3) The last group is the "rational speculator." This is definitely a rare bread in today's financial market. They realize the risk-reward relationship in what they are buying into. They generally tend to be the contrarian to what is considered "common investing." An example of this is an individual who bought in the uranium market early. The price of U3O8 was beaten so low and next to zero exploration was being undertaken. Supplies of uranium were at critical lows. Even the thought of investing in uranium, to the average investor, was considered ludicrous. When in actuality it was based on the most simple ideas of supply and demand. The folks who got in on the front of the uranium market have experienced exponential gains in their portfolios (there's still a long way to go."

So what kind of invest am I? I consider myself 90% "rational speculator" and 10% "dice roller." I believe to have found several quite positive trends that will carry strong for the next 10-15 years, but at the same time I will be adding something that might seem unique from my other investing soon...stay tuned. Let's talk about gold and why to invest in it (as if I haven't beaten this subject to death yet). I would first like to say that less than 1 in 10 individuals in the whole world own physical gold/silver or gold/silver stocks. There's the contrarian factors, but let's look at the true driving force behind precious metal. If you invest on gold you are betting on curtain factors:

1) The Feds won't be able to manage the Mt. Everest of debt they've created.
2) The deflating housing bubble and its effect it will have on consumer spending and the economy.
3) The stampede of foreign investors away from the U.S. dollar and U.S. dollar denominated investments.
4) For the first time in world history the de-facto un-backed currency of one nation is the reserve currency of the world. I collapsing dollar will lead to a monetary crisis around the world.
5) The U.S. still has a few years left in Iraq, and Iran is next. Hence, increased debt due to high military costs.
6) The geopolitical situation in the world, plus the exponentially increasing demand for oil will cause oil to easily rise to $100 /barrel and beyond.
7) Either because of direct IMF involvement of just market scenarios, the Federal Reserve and other central banks will no longer be able to meddle in the futures market and fix the price of gold. This is probably the most important factor at risk here. (I have written a very detailed analytical paper regarding this topic. E-mail me if you would like a copy jones973@tc.umn.edu).
8) Historically gold bull markets last about 10 years. The current bull market started in 2001, so we are only 5 years into it, and this is going to be a bull market of historic proportions regarding the other issues involved that haven't been involved in previous markets. Also, the second half of the bull has historically experienced higher gains than the first.
9) The ridiculous amount of inflation caused by the Feds increasing the money supply by 10% per annum over that past several years that has taken place and will continue to take place.

I'm sure I missed one or two other good reasons, but for now that will suffice. Just one of those factors coming true is bullish for gold. The more of the factors listed above that come true the better the scenario is for the precious metals market. I truly believe that, not only are all of these factors possible, but they are quite probable to happen either sooner or later . Now it's impossible to predict the future, but precious metals is the SAFEST bet out there. Pad your portfolio with gold stocks and pad your safe with gold bars/coins. It's the only way to protect your investments and profit at the currenct monetary mess that we live in.