Where are you investing this year | Yakezie Reader Insights | Yakezie Forums

No change for 2015! I will continue to contribute (max) to my 403b and look for opportunities in biotech stocks. 

I have used index funds, however my current investments are in individual stocks.

Barbara Friedberg said:

I have to contribute to this thread! As always, keeping my investing simple with a diverse portfolio of index funds – in line with my risk comfort. Included are stock funds-U.S. and International and I prefer individual bonds to funds. Additionally I contribute the max each year to US Goverment I bonds (in case inflation ever returns???).

 

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I truly believe that "where should I invest" is one of the most loaded questions you can ask. As individuals the word "invest" naturally creates stock market connotation in most peoples mind. Yet there are dozens of ways to invest your money, the number one way of which is in yourself and your own ideas. 

With that being said, two major areas where I am putting my money are Cyber Security and Energy. Cyber security funds are seeing an unprecedented growth, and it will only be getting worse over the next 10 years as we become more dependent on technology. Natural Gas probably seems odd, but I have been in the power business for quite some time, and there is no question oil prices will be higher in the coming years. I lived in Saudi for over 4 years and I can tell you that the Saudi's are fine with pushing people out of the market (shale companies, small producing OPEC nations), but they know what they are doing when it comes to oil. They realize that naturally pushing supply out of the market with a steady demand will create a rise in prices likely never seen before. The question is now just when.

Well one is a result of the other. The shale companies and smaller OPEC nations cannot withstand the lower oil prices, so they are being driven into bankruptcy. Most oil companies can produce oil for $30-35 a barrel, BUT, have large debt coverage ratios, so they can't afford to pay their debt. Oil is not going to come roaring back in the next 10 days, but in the next couple years once they companies are forced into bankruptcy, the supply levels will fall and oil prices will naturally trend upward. In fact, my consulting firm was just hired by a large private equity firm to specifically go and find distressed oil companies ($100-300M) who can't service their debt so they can buy them at .50 on the dollar. The problem with this is that most banks and equity firms realize that if and when these companies do indeed go into bankruptcy that they will have to take control of the assets. That is where companies like ours come into play because if that happens then we can manage the assets until they are once again profit generating so they can sell them back to the market.

It is quite a crazy business.