I enjoy the investing process. I like pinballs. Two great tastes that taste great together. And with pinball prices going up (http://bostonpinball.biz/ebay_112112.htm), maybe a collection of pinballs as an investment is not so crazy after all.
With investing, it is important to create a portfolio with different characteristics, much like a football team needs players of different skills such that the group is greater than the sum of its individuals. For example, a diversified investment portfolio might include:
1) Steady Eddie: these grow OK. They don't grow fantastically but won't make you lose your shirt. Example: Target
2) Totally speculative: you hate them, you love them, everyone has an opinion. This could double or go to zero in the next year. Example: Facebook
3) Income: these are all about your current needs. These investments give back a steady stream of dividends. These may never grow, but give you back money today. Example: Verizon
4) Counter-cyclical: these are likely to go up when others go down, but also lag while others are screaming upwards. Example: Kraft
5) Cash: zero risk. Doesn't go up, doesn't go down. But hold onto this for too long and you will slowly erode your purchasing power. This is a temporary parking area. Example: Treasury bills.
6) Alternatives: these fall outside normal classifications. These march to a different beat and do not go up or down with any decent correlation against other widely held investments. Only knowledgeable specialists should even try this: Example: commodity futures.
7) International: don't keep all your eggs at home. Go abroad with something that doesn't go lock-step with everything going on in the US. Example: Vodafone
So, what is the Target stock of the pinball world?
What is the Facebook stock of the pinball world?
What is the Verizon stock of the pinball world?
What is the Kraft stock of the pinball world?
What is the treasury bill of the pinball world?
What is the commodity futures of the pinball world?
What is the Vodafone of the pinball world?