Nobody can predict the future and much less predict which coin you should buy. While I would certainly not buy cards at the inflated prices they are now, a mining rig always has and will be a hedge versus buying coins directly. By investing directly in a coin you are taking a risk that the coin you invest in goes down in value and you are left holding the bag. A mining rig is an asset that has a value other than mining that can be sold or it be can be repurposed towards another coin. What history has shown is that those that look at mining as a long term investment and keep mining even when it was not profitable to do so are the ones that benefit the most e.g. LTC and ETH 6 months ago.
History has shown us if MOST people had spent the $600 dollars they would have spent buying a 7970 on buying Bitcoin directly they would have come out with more Bitcoin in the end (myself being one those and I was mining BTC in 2011).
There is no guarantee history will repeat itself from 2014. 10x as many people now know what crypto and blockchain tech is. GPU mining has proven that it not just a fad. Hindsight has also shown Bitcoin has periods of great boom and retraction, as does ETH. Even if you missed buying ETH at 0.8 cents where was everybody when it was under $10 in January of 2017. Litecoin was laughed at. Monero was looking like a PnD.
My gut tells me that all those people buying $600 1070s and $400 470s are going to call it quits once they're making less than 50 cents a day per card and they get sick of the heat and noise. Those using the cards for heating will push on. Those massive GPU farms in China have no intentions of quitting and will drive ETH difficulty well past 100 before end of August.
If you're casually mining to pay off part of your new gaming rig then go for it! You're helping to secure emerging networks and if you're selling for fiat each week you really can't lose much - but you're not really INVESTING.
INVESTORS don't care about the fiat price from day to day or even month to month. They care if their dev team is advancing the tech. If you're buying one of these new ETH ICOs which people are selling their cars and houses for then I have to question the sanity of the current market. Bloomberg calling Bitcoin a ponzi in 2011 was hack journalism. WSJ call ETH ICOs a craze that will end badly for some is probably insightful reporting.
You say if INVEST in a coin and the coin's value (in fiat) I assume goes down then you are left holding a BAG. haha, bagholders. Yeah well some of us BTC bagholders sold at $5 after Bitcoin recovered from $2. Again anything is duh stupid with hindsight. That's the thing though, there is RISK with investment.
Building a mining rig to mine with is hedging your investment. You're assuming that even if the coin you're mining goes to zero you still can sell your parts for at least 33 to 50% of their original value (unless you're buying a RX560 for $250).
The richest men/women in crypto did not become that way buy hedging. They went all in (some by scamming).
As an investor never invest more than you can afford to lose - this is sound advice since all of time and is still valid today (unless you like waking up with your kidney missing). If you feel more comfortable hedging by mining then that is a viable option. If you truly believe your blockchain technology will change the world then you don't care if ETH was $10 in January even if you bought it at the peak in March 2016 (well unless you switched to the ETC team).
TLDR - If your goal is to break even in fiat and risk little go ahead and mine with current inflated card, DDR4, PSU and Mobo prices. If your goal is to become a crypto overlord and retire at 40 then just buy the coins - but at least learn a little bit of basic trading strategy and learn how to at least secure your own private keys.
