Thoughts on investing in gold/silver

[beppington]

I would just add that a portfolio likely will require rebalancing periodically to maintain the desired asset allocation. That's one of the reasons I like the all-in-one mutual funds from Vanguard, Fidelity, T. Rowe Price, and others. They do the rebalancing for you.

With regular monthly or twice monthly additional investments, you may be able to re-balance that way, as you go along, depending on your portfolio's total value & how much you contribute each time. If your regular additional investments aren't enough to re-balance, especially combined with market swings, & you feel the need to re-balance, expert advice says not to do it any more than annually, & bi-annually is probably better. For most it costs $ to re-balance, in transaction fees (depending on your account & investments) &/ or taxes (again, depending on your account & investments).

They do the rebalancing for you.

I like to handle re-balancing (& anything else I can) myself. So, I stick to Vanguard index mutual funds, but not the all-in-one type.

 

[beppington]

I think most financial advisers would recommend a diversified portfolio with both equities and bonds.

I completely agree. While stocks are the best performer over the long term, holding a certain percentage of bonds smooths out the ride. My own bonds allocation is 10%. Experts advise a higher bond percentage the older you get, into retirement, etc, up to 50% or more.

 

[beppington]

Not quite true based on recent experience.

Schaeffer's Media Outtake: Weighing Stocks vs. Bonds

I think most financial advisers would recommend a diversified portfolio with both equities and bonds.

Some quotes from that article:

"Of course, PIMCO, a bond shop, has an incentive to paint stocks as less attractive." Hmmm ...

"Anyone with a time horizon of at least ten years should stay in stocks."

"This market does have some short-term issues, some of which I'm sure our Todd Salamone will be discussing this weekend in his next Monday Morning Outlook, but from a longer-term perspective the ongoing combination of strong price action with deep-seated skeptical sentiment remains a very compelling "one-two punch" for an aggressive allocation to stocks."

 

[foggy1111]

If you think that this country is not going to survive the massive national debt load over the next few years, (Like some European countries are having problems now) IMHO Buy all the gold and silver you can afford. The Dollar will not be worth anything. Ken Sweet

No doubt our national debt is out of control. Lots of people (myself included) don't see a clear way outta this economic hole we have dug....unless we make some dramatic headway soon. While investing some of your wealth into precious metals may provide some peace of mind.....I still gotta believe that we can muddle-through our problems and get back on track.

But....suppose we don't.....I'm still not sure what I would do with gold bullion.....other than pay everyone else's taxes. The ultimate redistribution of wealth.....give it all away in taxes. :laughing:

I say.....Diversify between (short term) bonds, cash, stocks, some high-quality collectibles (gold and silver?) , and real estate. And....hang-on.....its gonna get interesting.

 

[sweettractors]

No doubt our national debt is out of control. Lots of people (myself included) don't see a clear way outta this economic hole we have dug....unless we make some dramatic headway soon. While investing some of your wealth into precious metals may provide some peace of mind.....I still gotta believe that we can muddle-through our problems and get back on track.

But....suppose we don't.....I'm still not sure what I would do with gold bullion.....other than pay everyone else's taxes. The ultimate redistribution of wealth.....give it all away in taxes. :laughing:

I say.....Diversify between (short term) bonds, cash, stocks, some high-quality collectibles (gold and silver?) , and real estate. And....hang-on.....its gonna get interesting.

You are doggone right it is gonna get interesting. The housing crisis is really just a bad as it ever was after throwing billions at that problem and the Commercial market is going to hit next and it will be worse than the housing crisis. Ken Sweet

 

[Chuck52]

The commercial real estate market already took a major hit. I've got part of my 403b in commercial real estate and it dropped 30% just shortly after the big market drop. However, of late that part of my portfolio has begun to turn around. Some talking heads say there will be a second dip; some say there won't.

Chuck

 

[sweettractors]

The commercial real estate market already took a major hit. I've got part of my 403b in commercial real estate and it dropped 30% just shortly after the big market drop. However, of late that part of my portfolio has begun to turn around. Some talking heads say there will be a second dip; some say there won't.

Chuck

Just imagine how many were initially underwater before the recession and to that number, add Hundreds of thousands more commercial businesses. These are the ones that are owned by small businessmen or shareholders that have the 9.5 % of the population Layed off from work and no daylight at the end of the tunnel. The mortgage payment, insurance and taxes are still running on these vacant properties and with 0 income. Ken Sweet

 

[foggy1111]

Just imagine how many were initially underwater before the recession and to that number, add Hundreds of thousands more commercial businesses. These are the ones that are owned by small businessmen or shareholders that have the 9.5 % of the population Layed off from work and no daylight at the end of the tunnel. The mortgage payment, insurance and taxes are still running on these vacant properties and with 0 income. Ken Sweet

I agree Ken. I have a commercial rental property....and I really like the rental income. Now those folks want to buy.....and I feel forced to sell to 'em. If the building goes empty.....I got a huge reversal in cash flow. And.....there are no buisiness' to take their place. Who in their right mind would get into the manufacturing biz now?

 

[sweettractors]

I agree Ken. I have a commercial rental property....and I really like the rental income. Now those folks want to buy.....and I feel forced to sell to 'em. If the building goes empty.....I got a huge reversal in cash flow. And.....there are no buisiness' to take their place. Who in their right mind would get into the manufacturing biz now?

I know exactly how you feel. I have 5 residential rentals and I lowered the rent $30 to keep one from moving about a month ago. There is just not much money flowing in this economy. Ken Sweet

 

[bp fick]

Has the stock market ALWAYS, in EVERY decade performed well?

Gosh no. There are historically a number of "lost" decades" where the S & P average lost money. We just had such a decade and it has generally been labeled, properly, a lost decade. Doesn't mean everyone lost in stocks, but on average, the decade, years 1999-2009, was a loser. Flat out.

Historically, however, averaging in the majority of decades, stocks perform well. Who is to say what the next 10 years will bring? Nobody knows for sure. A diversified and balanced, and periodically rebalanced IRA, 401 or other portfolio is always the better part of wisdom.

The OP asked specifically, however, about Precious Metals. That remains a very open question. Again, no one knows for sure where these commodities are heading.