Stocks, Gold, Silver, and the printing press.

[JettaKnight]

That's one conclusion...


But where do they go from here?

 

[Jackson]

That's one conclusion...


But where do they go from here?

Up and down. As they have since we've been tracking it. I'll just keep investing and rebalancing. If it goes down big, like I know it will eventually, I'll stay the course and keep investing. If I lose my job in a great depression, I wont be concerned about the S&P.

 

[pudly]

Up and down. As they have since we've been tracking it. I'll just keep investing and rebalancing. If it goes down big, like I know it will eventually, I'll stay the course and keep investing. If I lose my job in a great depression, I wont be concerned about the S&P.

Right on point. You have to figure that parts of your investment portfolio will decline at different points in time in dollar terms. The only way to avoid that is to hold cash only. Diversify between different asset types and rebalance periodically. This guarantees that you will lock in some gains and will buy some assets while they are cheap.

 

[Jackson]

Right on point. You have to figure that parts of your investment portfolio will decline at different points in time in dollar terms. The only way to avoid that is to hold cash only. Diversify between different asset types and rebalance periodically. This guarantees that you will lock in some gains and will buy some assets while they are cheap.

Sometimes they all go down at the same time. In the US it has always gone back up. In other countries that may not be the case. The only thing I can guarantee is jumping out at the bottom and waiting for things to improve is a sure way to lock in those losses. Most everyone I know who got burnt in 08/09 did exactly this. They crapped themselves and pulled the money out to wait for better times. Well, better times came and they missed the boat.

 

[rhino]

Sometimes they all go down at the same time. In the US it has always gone back up. In other countries that may not be the case. The only thing I can guarantee is jumping out at the bottom and waiting for things to improve is a sure way to lock in those losses. Most everyone I know who got burnt in 08/09 did exactly this. They crapped themselves and pulled the money out to wait for better times. Well, better times came and they missed the boat.

Some didn't pull out, stayed the course, took huge losses, and have not recovered.

 

[Rookie]

Some didn't pull out, stayed the course, took huge losses, and have not recovered.

Yeah, children will do that.

 

[pudly]

Some didn't pull out, stayed the course, took huge losses, and have not recovered.

Yeah, children will do that.

Are we still talking about investing or have we switched over to reproduction?

 

[Rookie]

Are we still talking about investing or have we switched over to reproduction?

Yes.

 

[Jackson]

Some didn't pull out, stayed the course, took huge losses, and have not recovered.

How were these folks invested? I'm talking mostly about the market as a whole as measured by various indices. The S&P 500 for example appears to be pretty well above the late 2007 and early 2008 highs before it tumbled. Most of the stock indexes show a similar pattern. The Russell 3000 for example looks pretty similar.

If one were invested in specific companies or heavy in specific sectors or industries, performance would be very different. I like wide diversity because I feel there is no reliable way to predict when or if something will happen. At least not with the information and resources I have. So wide market indices describe my portfolio performance pretty well.

 

[pudly]

Mark Dice strikes again! This time he is offering passers-by a 10oz bar of silver or a Hershey bar. The results are too predictable.

[video=youtube_share;bYhTFz_SGw0]http://youtu.be/bYhTFz_SGw0[/video]

 

[IndyDave1776]

Mark Dice strikes again! This time he is offering passers-by a 10oz bar of silver or a Hershey bar. The results are too predictable.

Why couldn't I fortuitously encounter this guy and walk away with something of significant value amidst a pack of dumbasses with candy bars?

 

[rhino]

Why couldn't I fortuitously encounter this guy and walk away with something of significant value amidst a pack of dumbasses with candy bars?

Amen.

I'd be happy with a one-ounce ingot or round in lieu of the candy bar I can't eat anyway! Or a half-ounce! But 10 oz. would be more better.

 

[pudly]

I found a silver dime in my change this morning. A small victory in itself, but a good lesson about the declining value of the dollar. You may have heard that the dollar has lost 98% of it's value since the Federal reserve was founded a little over a century ago (1913). Since one of the Fed's dual mandates is to maintain price stability, they've clearly failed.

I decided to look up the value of the silver in that dime at coinflation.com and it is currently $1.06. Since the US removed silver from our coins 50 years ago (1965), the dollar has lost 90+% of it's value. With this kind of inflation, any bond that didn't pay 4.8% annual interest actually lost value over the last 50 years.

 

[pudly]

Looks like the US has turned a very negative corner on funding the deficit. Foreigners are now net sellers of US Treasury notes and bonds. The Chinese are selling a substantial percentage of their US debt and buying a lot of gold instead. This will put a lot more pressure to raise rates on those debts to attract people to continue loaning money to Uncle Sam and fund our deficit. On the other hand, the US can't support such a gargantuan debt at much above 0%, so they are boxed in. No pleasant options due to years of f-ed up fiscal policies. The fat lady is warming up...

 

[spencer rifle]

Time to print more money!

 

[pudly]

I understand you meant that as humor, but the way the system creates money is to borrow it into existence.* Even that isn't a solution.

* If you don't understand or believe that statement, here is your education:

[video=youtube;iFDe5kUUyT0]http://www.youtube.com/watch?v=iFDe5kUUyT0[/video]

 

[spencer rifle]

I understand - probably needed purple. But I'll watch the video anyway.

 

[zippy23]

buy gold now? i'm thinking i wanna get back in

 

[Hohn]

I watched that Mike Maloney video, as I end up watching most of his videos. He mixes truth with nonsense in dangerous proportions.

His distinction between money and currency is stupid. Anything with value is a store of value. All of them vary in how well they do that function. Land is a store of value. Gold is. Cash is. Cars are. Guitars are.

Over a given time period, some of those stores of value earn negative or positive return. That car might depreciate a ton, or you might have a 1936 Bugatti that ended up worth several million years later. Gold has gone up in value (or dollars went down), but it has also gone way down in value, even as dollars went down in value.

Since late 2011, Gold has lost almost a third of its value. Is this because dollars have appreciated by 33%? Of course not.

ALL VALUES FLOAT. ALL VALUES ARE RELATIVE. The market for gold affect the price of gold in dollars, but so does the market for dollars. The price of gold in oil or oil in dollar or gold are affected by all three prices. Gold, oil, dollars-- all float and have separate markets for their worth.

Gold is a terrible investment because a roaring economy can be justification for it both to rise and to fall, while most other investments rise in a good economy. Economic downturns are supposed to cause gold to crash. They often do. But often it's the opposite.

Gold is subject to supply and demand like everything else.

And the statement that gold "has never been worth zero' is true of any metal and any commodity. Tobacco has never been worth zero. Neither has copper for over two thousand years.

Just because scrap iron is 3 cents a pound doesn't mean I want it in my IRA. Being never worth zero is an incredibly low bar to meet as a selling point. Heck, ever been to a flea market? Have you seen all the crap that is still not worth zero?

Spare me!

 

[pudly]

Other commodities, land and collectibles are also valid investments to consider. The reason that the statement "has never been worth zero" is important is because fiat currencies have a nasty tendency to eventually end there and get replaced. No one, including Mike is claiming that gold and other precious metals don't rise/fall in price over over the short term. All investments do.

By your over-simple argument, investing in the S&P 500 after it went down ~55% in 2008 was a bad idea despite the fact it is worth 3x that now. If you don't want to invest in PMs, that is perfectly okay. It isn't for everyone and even most PM proponents only recommend it be part (5-10%) of your portfolio.