There is one, and only one time when you can indulge in speculative investing: When you don't care about the money you're spending. If every single penny were to disappear tomorrow, would you kick yourself, or would you barely shrug?
With that in mind, I did a little speculation myself. I used the remaining $300 of my stimulus check and purchased 10 shares of a new ETF, Powershares global nuclear energy (PKN).
Why would I do something like that? I weighed the pros and the cons, and here's what I came up with:
- Cons:
- This ETF is brand spanking new. Although it tracks the WNA index, which hasn't done too badly, there is no real precedent Similar ETFs have done marginally well, although there is a volatility to them that is troubling.
- The fees on this ETF are very high for an index fund: 0.75%! That cuts into compounding returns for sure. Still, it primarily invests internationally, and that always affects costs. Many countries charge exorbitant taxes for out of country stock sales, and that can be reflected in the management fees.
- Buying an ETF costs money. Since this was less than $2500, and it went into my IRA, I had to pay a $10.99 commission for this trade. For such a low number of shares, that's a huge chunk of change, and it starts me out at a loss.
- This ETF is brand spanking new. Although it tracks the WNA index, which hasn't done too badly, there is no real precedent Similar ETFs have done marginally well, although there is a volatility to them that is troubling.
- Pros:
- A major reason why America's economy isn't as strong as it could be is our dependence on fossil fuels. Hopefully, with more money going into nuclear research, we could wean ourselves off of depending on an unstable region that hates us to provide our energy. I'm basically placing a bet that America will turn to nuclear energy before long.
- It feels moral. I don't like the stimulus check, I didn't want it, and I'd rather that money went to the federal budget, honestly. If this ETF goes bust, I won't care. I'll just pretend I never got it in the first place.
- A major reason why America's economy isn't as strong as it could be is our dependence on fossil fuels. Hopefully, with more money going into nuclear research, we could wean ourselves off of depending on an unstable region that hates us to provide our energy. I'm basically placing a bet that America will turn to nuclear energy before long.
Irresponsible? Probably. Will it work? Only time will tell. This is a buy and hold ETF for me, so I won't be selling it anytime soon. With luck, the value will continue to rise.
