I wanted to take a quick break from the wintersday speculation (while there's still time - before more tidbits drop and markets start fluctuating even more) to talk about short and long term investment in Guild Wars 2.
What we've been talking about the past few weeks in relation to wintersday (like here, here and here) is short term speculation. An event is coming up and that event and the speculation before it are temporarily going to drive prices up.
Short term investments are, if you like, good methods for getting building your fortune in short starts and jumps. You are in and out relatively quickly.
Long term investments are ways of keeping currency safe (from inflation - where the quantity of currency in the market means the currency is actually worth less as time goes on) and, ideally, to make that value that you stow away worth more in the long run.
Now ideally you want to divide your funds between short and long term investments (with an amount of liquid, or free, gold in case you need anything or spot an investment opportunity that needs quick action). You gain from short term and you reinvest these gains into more short term investments along with long term investments.
Here's an example based on a beginner with 2 gold:
Investment diary day 1 - put 2 gold worth of buy orders in for chocolate after it fell sharply from 60 copper to 35 copper - the slump after the first big spike of last week.
Investment diary day 2 - listed the chocolate won for just over double 75 per bar.
Investment diary day 3 - collected approximately 4 gold. Chocolate DID have a second spike (in fact it had another major spike to nearly 1 silver 50 copper).
Investment diary day 4 - moved onto other short term investments for 2 gold. Placed 2 gold into a long term investment (gems).
Now the money came out of the short term investment towards the end of 28th November - at least that's when our man (or woman) invested in gems. He did this for a number of reasons. Firstly the gems had just spiked to as high as 2 gold 20 and fallen after that (each spike is followed by a slump) so it was a good rate.
Secondly, gems are one of the best long term investments in GW2. The only other long term investments we've really talked about so far are halloween items and chocolate and butter just when the nerf to their drop rates were announced (look how that combined with the short term investments this week past).
Why invest long term? I mean, you can see that short term investments can be very profitable. They can. But they're risky. They're also time intensive. For instance, I've had a very busy week and haven't been able to look into much short term (day or week) trading. So I've taken a lot of my funds and placed them about 50/50 in gems and glacial lonestones (lodestones) and glacial cores.
The cores and lodestones may not pay off. They're a short term gamble (for wintersday) but in truth I believe they'll increase in price anyway. It's not a market I'd need to check every couple of hours like a few other wintersday hopefuls.
Even if they don't gems will pay off long term. Get over to gw2spidy and select gem exchange at the top then hit all. See that climb?
You have to pay a fee for gems and it's a bit harsh but you won't suffer from the deflating price of inflating gold.
Truly, the crux of my post today is to remind you (if you've forgotten) to mix long and short term investments up (especially if you've not got the time to trade all day every day :P) and to remind you that gems are a pretty good long term investment vehicle.
Okay, now to the best part - encouraging comments: what other potential long term investments are you guys hiding gold in? What other trading strategies are you enjoying this weather?