Since we seem to have some financial experts here, I'm curious what you think the market (specifically the Dow) will do in the next week or so. Our 401K has some money in the Dow right now, and I'm thinking about moving it until this so-called 'crisis' is resolved. It's just a click of the mouse to put it in something safer, and I'm worried about how Wall Street will handle the fall-out should this thing drag on. Any thoughts?
It's hard to imagine a positive outcome.
If they do nothing it could be a catastrophe, completely rattling the world economy.
If they come to an agreement, it will probably be bad.
Putting aside the merits of budget cutting plans, a dramatic reduction of federal spending, at least initially, will raise unemployment and reduce economic activity (GDP). So we're left with bad choices and worse choices.
I went to cash on Friday.
Depends. Are you planning on touching your 401k anytime soon?
During the 2008 downturn my 401k took a massive dump. I kept all my existing investments and continued to invest at the same rates into the stocks - basically dollar-cost averaging with my normal contributions/matches.
Then 2009/2010 rally took place and I saw quarterly returns of 25%. I recovered all I had in it before, plus upwards of 25-50% on the money invested during the downturn. I am quite pleased with that outcome.
Point is, I held steady and leveraged the downturn to my advantage. But I also have 40 years to go until retirement so my risk tolerance is high.
The short-term repercussions of the budget deficit, regardless of decision, could very well be negative for quite some time (which is my projection). Should they actually manage to find a workable budget for the longer-term, you could easily see corporate confidence return, hiring pick up, the deficit problem shrink further and the economy pick up steam.
Stocks = legalized gambling. You just never know.
Quote from: h0rizon on July 26, 2011, 12:19:52 PM
Stocks = legalized gambling. You just never know.
Cheers to that. d*
My wife and I are on either side of 60, so it's a relatively short-term investment at this point. I was thinking to get out right now, and wait to see what happens in the next month or so. We bailed out similarly the last time it dumped, and we got back in at a good time. We're running out of years to take a really big hit.
At your age, you should be invested alot more in bonds and such. That said, bonds could very well take a dip with this debt ceiling, especially if the ratings go down (although, yields could go up due to the lesser credit rating....).
For you, I'd say that is a tough call. You should aim to be risk-adverse, so ask yourself how much of the retirement fund you can stand to lose if it disappeared tomorrow. If you could lose 20% and be fine, then maybe that's how much you should have invested in riskier assets. (Obviously it's more complicated than that, but hopefully that will help).
Just my 2 cents, don't bet your livelyhood based on one guy's recommendation 8)
We had a pretty good chunk in a Dow- based fund, but moved it yesterday. I see the Dow went down another 200 today- I think folks are starting to wake up to the fact that these clowns in DC just may ride us into a further recession- or depression.
whats the problem? I continue to do well in the market.
Of course I only have two positions in this casino, a long term set of puts on LPS from March (up 400%) and a more recent set of puts on NFLX. (up 250%). I'm planning to keep both open thru September.
It's not about investing, it's legalized gambling. Find the pattern, play small, and enjoy the free ATM when it works, mentally prepare for what happens when it doesnt work. Just like any casino. Frankly in my opinion, if your investing in this market, you've lost your mind. The average (70%) of positions traded in exchanges lasts 11 seconds, it's all computers trading with computers. If you want to "invest", invest in yourself, your family, your house, your skills. If you want to gamble, well good luck.
disclosure - I emptied my 401k in 2007 after the bond market crisis in February that no one except financial tradefloors saw. I sunk my funds into metals and land (my place that I sometimes get to write about here). I sold my metals in 2008 and remained tangible asset focused. I keep a 4 figure "casino" account open, and make 3-10 trades a year .. 2008 was fantastic to me, 2009-2010 not as much, 2011 has been good. But I can lose 100% of that and still sleep well at night. Any significant gains go to 1) asset 2) debt reduction 3) productive improvements with eventual cash return or equitable increase. (water, pastures, fences, etc).
I am 35, I have a long way to go to "retirement" but I have little desire for risk. I do however have desire to take advantage of stupid moves by stupid people who failed 3rd grade math.
not a financial advisor, if you listen to me you likely will lose money.
After reading a lot of your posts Mouldoon, you sound like
you have your head screwed on tight.
Bruce
We will be investing some of our money into the house I'm getting ready to build. My wife is old enough (don't tell her I said so) to draw from her 401K without penalty. We'll wait til Jan. 1, as I won't be earning an income in 2012, so the tax hit will be less. We have enough money to move ahead full speed with the build until then. I used to think that drawing from your 401K for anything other than retirement was a bad idea, but now I believe having a debt-free roof over your head might be worth more.....
Sound advice Muldoon. Invest in your land (so you can feed yourself) and yourself (so you can weather downturns) and you should do just fine.
I may tap my 401k via loan to help pay for the land if possible. 3.5% rate and I get the interest I pay vs 6% and the bank gets it.
Retirement day July 31, 2011 c* We're thinking of taking everything out, pay off debts & live a little less stressed... Glenn is getting pretty burned out on this job, although we're thankful that he has it & the steel company people he's working for are great.
I keep kicking myself for not having reinvested in stocks when the market started going back up - I took all my money out right before the downturn & put it in US treasury bonds. Was going to retire last year, but stayed on until I turned, ah, the age where you don't have to pay a penalty ;) (I'm 2 wks younger than Glenn).
Everyone I've talked to has said I did the right thing... the way the economy looked & all those bailouts & the markets dumping big-time... oh well, win a few, lose a few...
I'm afraid to leave the money in the "Thrift Plan" Federal workers have... like Muldoon, would rather have tangibles than all that funny money [waiting] But the taxes are going to be pretty steep...
Quote from: Sassy on July 29, 2011, 07:43:21 PM
Retirement day July 31, 2011 c*
Retirement? Yours? As in no more punching a clock? Wow, what a day!! :) :) :)
I'm still in the semi retired stage, still 65, but more retired than not. :) Last year (school year Aug thru May) we worked Tues thru Fri, 9 - 3:30. This year Tues thru Fri, 9 to 12 Noon. Half the time = half the income, but also no employees now, so we save on those expenses. Uh-oh. Sorry I guess that doesn't help the economy. :(
No assets in stocks right now. And by some strange quirk the bonds all matured this week; cash in the bank looking for a new home. ???
The congress critters are still thinking about how to 'help' us with our 401K's
turn them into 'managed pay out plans' (for our own benefit of course)
I think we will convert a major portion of the 401k into the farm house remodel and other tangibles before inflation or the government get their hands on it
one more year to social security for me (I hope)
It is a flip of the coin.
The first time we had to make this decision, we got out and the market went up.
The second time we had to make this decision, we decided to stay in because of our previous overreaction, and we rode it almost to the bottom.
No one knows what will happen.
Generally, you should just do the opposite of what we do.
Quote from: hurricane on August 02, 2011, 12:39:14 PM
It is a flip of the coin.
The first time we had to make this decision, we got out and the market went up.
The second time we had to make this decision, we decided to stay in because of our previous overreaction, and we rode it almost to the bottom.
No one knows what will happen.
Generally, you should just do the opposite of what we do.
That sounds about like me d* I did get out of stocks before the big downturn a couple years ago (3yrs ??? ) but should have gotten back in - could have had almost twice in the Thrift Savings Plan than what I have... oh well, win some, lose some - I was too close to retirement to want to take the chance.
Another reason I wanted to retire besides my body just can't take the long hours in ER, is I want control of that money... as soon as I can, I will take it all out - even w/a big tax hit. Better than watching it whittle away from inflation or the many tics in congress/senate deciding to do something w/it for my own good >:(
I won't be entirely retired... will sign up w/a nursing registry to do home health if I can avoid a lot of lifting etc. Plus there is always lots of work around the Underground Complex... especially w/Glenn being gone a lot.
It's hard to say what the international bankers/international corporations/hedge fund owners/many tics/you name it have plans for...
Well, I see the Dow is responding favorably to the budget deal- NOT! I keep reading that the recession 'ended' in June of 2009, over two years ago, but I'm not seeing it.
I keep reading that the recession 'ended' in June of 2009, over two years ago, but I'm not seeing it
Now they are saying a 30-50% chance of a 'double-dip'.
This is just amazing. One part bad budgeting/greediness, 2 parts FUD (Fear, Uncertainty, Doubt) and you have a self-feeding, self-sustaining downward spiral.
I wonder how much further till we hit 'bottom'. Several more years I think.
Quote from: h0rizon on August 03, 2011, 12:01:51 PM
I wonder how much further till we hit 'bottom'. Several more years I think.
The real question is, the bottom of what?
John's "Muddle Through", my "Melt Down" or Glenn's "End of the World"? ???
good call, Mushcreek !
http://www.google.com/url?q=/finance%3Fclient%3Dob%26q%3DINDEXDJX:DJI&sa=X&ei=dew6TtLQJPLMsQL_y50e&ved=0CCkQowE&usg=AFQjCNEn8i4qSK1hIDLnu7-PdER79Xq-9A
or
http://www.google.com/search?q=dow&rls=com.microsoft:en-us&ie=UTF-8&oe=UTF-8&startIndex=&startPage=1
Here's the shape of the record drop of '87
(https://i1009.photobucket.com/albums/af219/countryplans/dow87.jpg)
Here's the more recent five year period including today's 4.3% drop.
(https://i1009.photobucket.com/albums/af219/countryplans/dow11.jpg)
Not very promising. A good outcome would be to drop another 5-8% over the next few months and then start a three year slog back.
Watching the DOW is really silly actually.
Consider this: after the last major crash two major players were removed from the mixed bag and replaced with players that would perform better.
Thus, the DOW figures, if you put the group back together would not be the same as you see today. Put GM back in there and CITI and see what happens. Also, perhaps, put all the rest back in.
Fact is the DOW is manipulated so that it will tend to trend favorably no matter what.
As for the markets, I'm no guru but I was not surprised to see the drop after the deal was signed. Frankly I think investors didn't believe they would do it, but when they did panicked and jumped ship....of course, strangely they jumped over to Treasuries more then commodities I guess -- which always baffles me.
We just raised our debt limit by more then the GDP of Russia or Canada and by 1/3rd of China's....where, exactly, are we going to borrow 1/3rd of ALL of China's wealth in the next year and a half? From the printing press me thinks.
Think Weimar is what I'm saying.
I'll leave you with this: http://surfingthenewnormal.wordpress.com/2011/03/09/hyperinflation-case-study-1-weimar-republic/
nice action today, it was just crazy tho. I saw a 72:1 down volume tick at one point. Crazy crazy, I don't think it was ever that heated in 2008. I exited my netflix puts with a nice return. Might be too soon, but no one ever went broke taking a profit.
The market structure is soo jacked here I tend to expect a rip your face off rally or an outright crash. My bet is short term reversal with some green days tomorrow or next week; longer term, lower highs and lower lows trending down.
Yeep! I think I'm out of the Dow fund for the foreseeable future. We're going to draw some of that money out in January for our house anyway.
Dollar-cost averaging, boys....think long-term.
I never try and time the market. I max out the 401(k) regardless of the market conditions. The only timing technique I have used is to try and add more to the IRA when the market is lower.
Quote from: muldoon on August 04, 2011, 06:31:20 PM
nice action today, it was just crazy tho. I saw a 72:1 down volume tick at one point. Crazy crazy, I don't think it was ever that heated in 2008. I exited my netflix puts with a nice return. Might be too soon, but no one ever went broke taking a profit.
The market structure is soo jacked here I tend to expect a rip your face off rally or an outright crash. My bet is short term reversal with some green days tomorrow or next week; longer term, lower highs and lower lows trending down.
I'm expecting something that resembles stabilization Tuesday or Wednesday Muldoon, maybe even a short bounce. What happens beyond that is unclear. I'm watching this very carefully because it could be much worse than I think....or just another bump.
Right now I'm tickled pink that gold is nearly $1,700.00 and oil is down.
BUT....Food costs are way up. You think there might be just a little inflation the Government bean counters are missing.
Time to take a few profits and head to the stock auction for another steer. They're going cheap right now.
dow is down 350
I just checked my 401K
they have a 30 day 'lock out' to prevent 'short term trading' (just started this policy Jan 2011) before trading within the T Rowe Price funds was almost unlimited
I was considering going into stock after this next bottom (who knows where that will be)
But I sure don't want to be locked out of going back to the 'cash' fund I am in now (it has been returning over 4% for the last 2 years with no losses)
Peter I like your idea of getting a steer or two -- I just can't do it because the pasture at the farm is not well fenced
hhhmmm maybe time to invest in some posts and fencing
I have a few thoughts on this newest direction, and I intend to put them down tonight but want to address a few comments I have seen.
Quote from: Native_NM on August 06, 2011, 10:33:12 AM
Dollar-cost averaging, boys....think long-term.
I never try and time the market. I max out the 401(k) regardless of the market conditions. The only timing technique I have used is to try and add more to the IRA when the market is lower.
Buy and hold works, except when it doesn't. I think you need to consider secular bull and bear markets. I believe we have been in a secular bear market since 2000 that could continue for another 10 years.
Keep this in mind - today on the S&P we traded at a the same print from 1998. Meaning if you bought in 13 years ago, you lost money. For a long term investor this is disaster.
Buy and hold is a great strategy at certain times, a horrible one at others. Equities went nowhere from 1966-1982 (16 years), 1929-1950 (21 years), and 2000-? (11 years so far). It worked great from post-WWI to the 1929 crash, during the Eisenhower and Kennedy years, and during the greatest bull run of them all from the early 80s to the new millennium.
It works when it works, and if you only look at a 30 year span it looks like it always works. It Doesn't. The cycles involved are much larger than 30 years in span.
Quote from: peternap on August 07, 2011, 09:03:45 PM
I'm expecting something that resembles stabilization Tuesday or Wednesday Muldoon, maybe even a short bounce. What happens beyond that is unclear. I'm watching this very carefully because it could be much worse than I think....or just another bump.
Right now I'm tickled pink that gold is nearly $1,700.00 and oil is down.
BUT....Food costs are way up. You think there might be just a little inflation the Government bean counters are missing.
Time to take a few profits and head to the stock auction for another steer. They're going cheap right now.
We are currently trading around 1115 on the S&P. A few days ago it was 1350. Basically, we have lost an entire years worth of gains, pretty much back to the start of QE2 that was announced after the Jackson Hole meeting. You are correct in mentioing that food prices are up, and gas as well. What has happened is that "stimulous" is gone, but the unemployment, except food, except fuel. The games Bernanke plays have left us continually in worse shape then when he started.
So let's say I put $15k a year away for 13 years, and my balance at the end is $195,000, because the market is flat. I'm still ahead $66k real cash in my tax bracket, and that ignores state taxes.
Muldoon:
What does a long term, non-trader investor do in a secular bear market?
(I guess buying gold [metal or miners] in 2000 would have been a good investment at least this time.)
Quote from: John Raabe on August 08, 2011, 09:53:55 PM
Muldoon:
What does a long term, non-trader investor do in a secular bear market?
(I guess buying gold [metal or miners] in 2000 would have been a good investment at least this time.)
Ask him how many "really good days" or "really bad days" there were over any "secular period". In other words, over any period of time, the big increases (or the decreases) were concentrated into a handful of days. If you missed the 30 best days over the last ten years, you would be negative instead of flat. If you magically pulled out of the market before the 30 worst days over the last ten years, and jumped back in the next day, you would be fabulously wealthy (and under SEC scrutiny). Over the last ten years, less than 30 days account for almost the aggregate closing price today: 11.1K. To put it another way, if you missed those days, but were in the market every other day, you would have zero.
Secular is a fancy trading word for long-term trend...but discounts the huge impact of statistical outliers and the importance of those key data points on the trend line's overall shape. Take every point over the past 10 years, pull out the outliers (either winners or losers) and plot the line. Something fishy in River City? Yep.
I'm not a stock analyst, and certainly not an expert on Wall Street matters. I have spent a considerable portion of my career in professional and corporate accounting, including positions as CFO. My jaded position is that the whole system is rigged; save as much as you can, minimize your tax burden as much as you can, and not worry about the rest.
Remember, wealth is not the same as cashflow, and vice-versa. Dug here should be an inspiration to millions of Americans, as he is actually wealthier than half the population in the most affluent cities in the US. That is a hard fact. My wife and I are working toward zero debt (including the house). If I can get my kids through college without any student loan debt I'll be a proud, proud man.
As an aside, I'm sure many of you saw last week that almost half the nation could not come up with $2,000 in five days. Think about that one!
The stock market is totally rigged like any self respecting casino. Get out while you can.
based on the asian markets (down) I expect another big down day
futures down 100 already
sure am glad I am out of stocks
Quote from: peternap on August 07, 2011, 09:03:45 PM
I'm expecting something that resembles stabilization Tuesday or Wednesday Muldoon, maybe even a short bounce.
Yep, short bounce is here. Probably close flat or close to it.
Gold is still going up [cool]
Here is a reminder that the classical economists always understood - we are enveloped in a POLITICAL ECONOMY and two are linked at the hip. The economic adjustments we are making now are tied to the political adjustments we will, at some point, also have to make.
http://www.stratfor.com/weekly/20110808-global-economic-downturn-crisis-political-economy?utm_source=freelist-f&utm_medium=email&utm_campaign=20110809&utm_term=gweekly&utm_content=readmore&elq=761c2e5c240b4a64819f1b236ea68544
Quote from: John Raabe on August 09, 2011, 10:10:13 AM
Here is a reminder that the classical economists always understood - we are enveloped in a POLITICAL ECONOMY and two are linked at the hip. The economic adjustments we are making now are tied to the political adjustments we will, at some point, also have to make.
http://www.stratfor.com/weekly/20110808-global-economic-downturn-crisis-political-economy?utm_source=freelist-f&utm_medium=email&utm_campaign=20110809&utm_term=gweekly&utm_content=readmore&elq=761c2e5c240b4a64819f1b236ea68544
Interesting article but immediately apparent is that the author is more interested, perhaps politically, in addressing the problem from a specific point of view while possibly ignoring another. I need to finish reading it, but from the first 1/3rd or so I'd say "yes, but where is the part about the political ideology that was bent on controlling the markets in order to allow everyone to buy a home whether they could afford it or not? Or how about the politics behind entitlements? Socialist programs?.
I'll keep reading but one thing I've learned is that objectivity isn't always something economists or political writers have much of.
Quote from: John Raabe on August 09, 2011, 10:10:13 AM
Here is a reminder that the classical economists always understood - we are enveloped in a POLITICAL ECONOMY and two are linked at the hip. The economic adjustments we are making now are tied to the political adjustments we will, at some point, also have to make.
http://www.stratfor.com/weekly/20110808-global-economic-downturn-crisis-political-economy?utm_source=freelist-f&utm_medium=email&utm_campaign=20110809&utm_term=gweekly&utm_content=readmore&elq=761c2e5c240b4a64819f1b236ea68544
The further I read the more I think "Clap Trap". The author has no idea what he is talking about frankly, and is clearly an ideologue.
Buy and hold is a great strategy at certain times, a horrible one at others
Agreed but disagreed. That depends largely on how long you buy and hold. For some (myself included) it's 40 years. For others, it's 40 months. More importantly, you should be questioning how much stock you are invested in compared to how long you have. I have no problem with a 20 year lull in my 401k, with the caveat that it doesn't happen when i'm 15 years away from retiring.
As with construction, it's all about using the right tool for the right job. Stocks are but one tool in the investment toolbox.
we are enveloped in a POLITICAL ECONOMY and two are linked at the hip.
We are enveloped in an EMOTIONAL ECONOMY more so than a political one. Large run-ups and associated bursts/pops are fed largely by the general populous, based on their beliefs and emotions at that moment. Take yesterday's stock crash; everyone has known for quite some time that the fundamentals of the government and economy are poor, and yet the market has been on a steady uptick. Suddenly we are downgraded by ONE company to AA+; essentially just putting the rubber stamp on already well-known issues - and suddenly everyone pulls out of the market. And now, the market is trending up again today.
Any political actions are simply leveraging this fact.
Remember, wealth is not the same as cashflow, and vice-versa
Spot-on. If you have $0 to your name, $0 yearly expenses, food on the table every-night and a smile on your face, you are every bit as wealthy as those "1% elites".
I make mistakes in life, some little, some not so little....I take my lumps, look for the lessons available, and try to make use of them....se la guerre.
But I really hate it when other people's mistakes or poor choices take me down with them. I could be really angry about what is happening in DC....but it seems so not worth it.
Good point Considerations. A good and reasonable point.
So who jumped out of the market and missed today's rally?
Even though there is so much dysfunction, I for one am still in the market with my old-age money betting on America (largely) long term.
The strengths are many and don't make the news or blogs as they are taken for granted and therefore invisible.
All the hissing and spitting is on the margins and can usually be ignored - in politics and business. Fear mongers are everywhere trying to get you to buy in.
Quote from: John Raabe on August 10, 2011, 12:27:49 AM
Even though there is so much dysfunction, I for one am still in the market with my old-age money betting on America (largely) long term.
The strengths are many and don't make the news or blogs as they are taken for granted and therefore invisible.
All the hissing and spitting is on the margins and can usually be ignored - in politics and business. Fear mongers are everywhere trying to get you to buy in.
It works for Buffett; it can work for you.
Quote from: Native_NM on August 09, 2011, 11:55:13 PM
So who jumped out of the market and missed today's rally?
Looking at today it might be better to ask: who stayed in, gloated and now is losing?
Going down!
(http://t0.gstatic.com/images?q=tbn:ANd9GcT1OmfK9N3h1XBhXOLyjBNgDOwpQIiK9IkJoriG6Q-39vm3QNkgnA)
Quote from: peternap on August 10, 2011, 10:26:32 AM
Going down!
(http://t0.gstatic.com/images?q=tbn:ANd9GcT1OmfK9N3h1XBhXOLyjBNgDOwpQIiK9IkJoriG6Q-39vm3QNkgnA)
lol
sadly I fear it's going down a lot further but I suspect it will bounce back up first, drop some more, bounce up again and so on -- I'm no market guru though, heck I'm a total dummy when it comes to the markets but I see Gold is nearly $1800 now and if the trend means anything then I suspect it will break $2k within the next 6 months and the markets? Probably go down and up at the same time (inflation might make them look up but vs gold on the other hand (and other commodities) will probably be down).
I have no $$$ what-so-ever in the markets mind you as I pulled out my 401k and annuities when they were still worth something and I had some hair left still (didn't want to pull the rest out) and figure veggies and land are better investments for me.
Again, I'm no guru or even a market wannabee but I believe we are in the beginning stages of a 'Greatest Depression' and that entitlement spending will drive it on for longer then the last big one.
Hang on to your hats because if I'm right it's gonna suck! But I pray I'm totally off my rocker though.
If you are in it for the long haul, you don't worry about the daily gyrations.
Quote from: Native_NM on August 10, 2011, 12:49:43 PM
If you are in it for the long haul, you don't worry about the daily gyrations.
Good thing I'm not in it at all...but I wonder if that's what folks thought in Argentina before theirs collapsed....though I have heard that some bought stocks when they were pennies on the dollar and a decade later became rich....
Me? Don't have the money but I believe the writing is on the wall.
Actually, NM has a good plan. It will work as long as there is a viable economy and if there is not one any longer...all the cash will be worthless anyway. So he's in a win/win position as long as he has the time.
I'm 99% out of the market, 100% out of bonds and heavily invested in Gold & Silver.
I also have several tons of lead which I still think is the best investment going for the long haul.
Everything I own is paid for and I'm kinda enjoying the show. c*
Quote from: peternap on August 10, 2011, 02:16:11 PM
Actually, NM has a good plan. It will work as long as there is a viable economy and if there is not one any longer...all the cash will be worthless anyway. So he's in a win/win position as long as he has the time.
I'm 99% out of the market, 100% out of bonds and heavily invested in Gold & Silver.
I also have several tons of lead which I still think is the best investment going for the long haul.
Everything I own is paid for and I'm kinda enjoying the show. c*
High Speed Lead? I'm invested in some of that too ;)
Quote from: peternap on August 10, 2011, 02:16:11 PM
Actually, NM has a good plan. It will work as long as there is a viable economy and if there is not one any longer...all the cash will be worthless anyway. So he's in a win/win position as long as he has the time.
I'm 99% out of the market, 100% out of bonds and heavily invested in Gold & Silver.
I also have several tons of lead which I still think is the best investment going for the long haul.
Everything I own is paid for and I'm kinda enjoying the show. c*
I seem to recall Anthony 'can't keep from taking pictures of my' Wiener claiming that Gold was a bubble at $1000/oz and that you would never get your money out of investing in Gold if you bought any back that.....
Of course I also remember being told Gold was a 'Bubble' at $900/oz and that it would NEVER break $1000 an oz....and then there are the folks who claimed it wasn't a sound investment at $500/oz because it was over priced....
Funny, but at $1800/oz I'm thinking they were all full of it, didn't know squat and should not be listened to...but then what do I know?
Now, if only I'd listened back when gold was $500/oz and invested a little....dammit! Ahh well, I'll have to settle with watching it go up, the dollar down and hoping that sanity returns some day soon.
Gold is a risky investment. Much of what I have and darn near all the silver, goes back to the 80's. It's taken that long for it to really move.
I did buy a fair amount of coin silver in the last few years as well as every piece of estate and flea market gold I could find.
I didn't pay anywhere close to spot at the time so no mater what, I have a profit.
It will go down sooner or later. Deciding where to sell and finding a buyer other than bottom feeders, is the trick.
No one can say for sure where the top of the gold market is for sure. But when that bubble does pop, and it will (it always does), look out below.
That move will be fast and furious. Think the Hindenberg. Oh, the humanity!
Quote from: archimedes on August 10, 2011, 06:36:19 PM
No one can say for sure where the top of the gold market is for sure. But when that bubble does pop, and it will (it always does), look out below.
That move will be fast and furious. Think the Hindenberg. Oh, the humanity!
Perhaps, but then if you think 'Wiemar' then perhaps you'd be closer to what I think.
And I think the problem with 'bubble's is that the money with which you buy the object (s) that is considered a bubble must survive. Thus, to believe that Gold is a bubble you must also believe that the US Dollar (FRN) will survive. I may well, but then it may not.
Lastly, anyone who looks at gold prices and inflation knows that it could reach $6600/oz and not be as high as it was (inflation adjusted) ini the 1979/80 'bubble'.
Personally? I think the FRN is done and there is no Gold bubble but then I don't have an investment in the issue so don't count I guess.
http://www.realclearpolitics.com/video/2011/08/10/ron_paul_gold_is_not_a_bubble.html
I think Ron Paul is probably closer to reality then most these days.
http://www.fool.com/school/buyandhold/buyandhold04.htm
Never understood any of the gold or dollar debates. If you have good growing land and a fresh water supply, it seems like that would be the drivers seat. 8)
I used to joke that the rich man was the one with all the chickens. doesn't seem all that far fetched anymore. :-\
I know, if I had a good food and water source, no amount of paper or heavy shiney metal would make me part with it.
Speaking of buffet...
http://finance.fortune.cnn.com/2011/08/11/warren-buffett-buy-stocks/
When buffet speaks, I tend to listen. Granted he is not always right, but for a guy in the business of making money betting on other companies, I think he knows a thing or two.
I believe it was buffet who said something along the lines of "The first thing a man should, before buying a single share of stock, is to buy a house". Could not be truer today.
Now my 2 cents on this gold issue; regardless of what you invest in, investing in only one or two things is very risky. Precious metals is only one segment of the overall economy, and as with any individual segment, there is risk of collapse. Remember housing? Diversification is the key, even if everything is on a downward slide. And if everything goes to sh*t, it won't really make a difference either way (as previously noted).
Quote from: zion-diy on August 11, 2011, 07:54:02 AM
Never understood any of the gold or dollar debates. If you have good growing land and a fresh water supply, it seems like that would be the drivers seat. 8)
I used to joke that the rich man was the one with all the chickens. doesn't seem all that far fetched anymore. :-\
I know, if I had a good food and water source, no amount of paper or heavy shiney metal would make me part with it.
I am on the same page with you there. You can always trade food for goods. Cool clean water is the kindest thing you can do for a thirsty weary person.
Quote from: h0rizon on August 11, 2011, 12:20:20 PM
Speaking of buffet...
http://finance.fortune.cnn.com/2011/08/11/warren-buffett-buy-stocks/
When buffet speaks, I tend to listen. Granted he is not always right, but for a guy in the business of making money betting on other companies, I think he knows a thing or two.
I believe it was buffet who said something along the lines of "The first thing a man should, before buying a single share of stock, is to buy a house". Could not be truer today.
Now my 2 cents on this gold issue; regardless of what you invest in, investing in only one or two things is very risky. Precious metals is only one segment of the overall economy, and as with any individual segment, there is risk of collapse. Remember housing? Diversification is the key, even if everything is on a downward slide. And if everything goes to sh*t, it won't really make a difference either way (as previously noted).
I'm not an investor in stocks or bonds so should preface my response with that -- but I agree here completely.
I believe, after losing my 401k in the Williams bankruptcy because it was all in Williams stock, that if you are going to invest it should start with these things:
1. Pay off your credit bills.
2. Invest in a home and/or land (they aint making any more land)
3. Diversify
4. Don't count on the Government to feed you in retirement -- plan to do it yourself.
I currently don't have a 401k (refuse to do it right now as long as there is uncertainty as to whether or not DC will take it) but took my last out of mutuals etc right before the last big crash and moved it into money markets. When I was laid off I cashed it in and put it into my other retirement plan: my property (often called the farm or homestead).
I figure that since I own the land outright and the cabin I could retire there and raise livestock and grow veggies for my retirement if that's all I can manage. ;)
I figure that since I own the land outright and the cabin I could retire there and raise livestock and grow veggies for my retirement if that's all I can manage. Wink
We're definitely on the same page :)
they aint making any more land
Well, that's not entirely true. They are selling plots of land on the moon, afterall; going for about $20/acre. Not a bad deal. Too bad the commute sucks. But hey maybe they'll start selling plots of land on Mars too, once they get that frozen water thing figured out. At least there I might be able to plant my raspberry bushes :P
Quote from: OlJarhead on August 11, 2011, 01:19:47 PM
I'm not an investor in stocks or bonds so should preface my response with that -- but I agree here completely.
I believe, after losing my 401k in the Williams bankruptcy because it was all in Williams stock, that if you are going to invest it should start with these things:
1. Pay off your credit bills.
2. Invest in a home and/or land (they aint making any more land)
3. Diversify
4. Don't count on the Government to feed you in retirement -- plan to do it yourself.
I currently don't have a 401k (refuse to do it right now as long as there is uncertainty as to whether or not DC will take it) but took my last out of mutuals etc right before the last big crash and moved it into money markets. When I was laid off I cashed it in and put it into my other retirement plan: my property (often called the farm or homestead).
I figure that since I own the land outright and the cabin I could retire there and raise livestock and grow veggies for my retirement if that's all I can manage. ;)
Years ago when COBOL was still a language (Think mainframe era), I took a class in programming in business school. I still remember some syntax:
If No_debt
If own_home
If diversified
If 3 months_already_saved_in_bank
Perform 401k_plan
Else
Pay too_much_taxes.
Seriously,
If you are employed and have an adequate emergency fund and are serious about saving money, there is not a better return than a 401(k) plan. If you are risk averse, just put the money in the MM fund. You will get no real interest, but its as safe as the cash in the bank. The possibility of the government seizing 401(k) plans is pretty low.
Think about this rate of return scenario:
A family guy earning $75,000 wants to save 15% of his income. He's afraid of the stock market, so he just saves post-tax cash at the local bank. He puts $11,250 in the bank over the year, and at today's interest rates accrues $22.50 for the year. Rate of return on cashflow basis: 0.20% <<less than 1% at current rates.
The same guy enrolls in his company 401(k). The match is $1500 (2% national average). In addition, he defers $1,687.50 in taxes at the 15% marginal rate. Rate of return on cashflow basis: 28.33%! ($1500 + $1688) / $11,250. If you ignore the tax affect, its still a 13.33% ROI.
His money is in his 401(k) in a MM fund that is as safe as cash in the bank.
Max Keiser talks with Jim Willie from 7/30/2010
http://www.youtube.com/watch?v=YUxZRJxNrMI&feature=player_embedded