Has Anybody Been Looking at Their Portfolio Statements?

[Paulie]

I predict that if we do not see evidence that the banks commence lending, we are going to see a nasty depression.

As for whether the juiced monetary base will translate to substantial increases in the money supply, I continue to look at the numbers in search of hard evidence before making moves. But thus far, the Fed has not released the plug in that it has recently increased the interest rate it pays on both required reserves and excess reserves. Thus, there is less incentive to lend.

Fed changes interest rates paid on reserves - Ron Paul Forums

Brian

Well PoliticalChic asked if she should take a real loss on her portfolio by selling now. Do you advocate that she sells now, eats the loss, and moves whatever's left into metals and cash, or do you think there will be another boom on the way that she should wait on, to hopefully recoup her losses at the moment before she moves her money?

I mean, I'm quite the bear these days, but I'm finished trying to predict the future. I've been of the mindset that we have seen the last of the boom and busts for quite some time, and we are entering the beginning of a depression. If that is true, then the best move is take the loss and protect what's left. But if these bastards somehow managed to finagle another rebound and subsequent boom (bubble, of course), then maybe she'd do better staying put and making up the loss?

I don't really know what to tell her. If it were me, I'd protect what's left. The chances seem moderately good that you could recoup the losses in just metals and cash positions ANYWAY. But I'm stumped.

 

[gonegolfin]

Well PoliticalChic asked if she should take a real loss on her portfolio by selling now. Do you advocate that she sells now, eats the loss, and moves whatever's left into metals and cash, or do you think there will be another boom on the way that she should wait on, to hopefully recoup her losses at the moment before she moves her money?

I provided my opinion in post #17.

Brian

 

[Silence]

I'm glad I don't retire for another 25+ years

 

[PoliticalChic]

Well PoliticalChic asked if she should take a real loss on her portfolio by selling now. Do you advocate that she sells now, eats the loss, and moves whatever's left into metals and cash, or do you think there will be another boom on the way that she should wait on, to hopefully recoup her losses at the moment before she moves her money?

I mean, I'm quite the bear these days, but I'm finished trying to predict the future. I've been of the mindset that we have seen the last of the boom and busts for quite some time, and we are entering the beginning of a depression. If that is true, then the best move is take the loss and protect what's left. But if these bastards somehow managed to finagle another rebound and subsequent boom (bubble, of course), then maybe she'd do better staying put and making up the loss?

I don't really know what to tell her. If it were me, I'd protect what's left. The chances seem moderately good that you could recoup the losses in just metals and cash positions ANYWAY. But I'm stumped.

Hopefully, the stocks will come back in ten years. By then, I will need the money for my kids' college.

Honestly, I can't see myself taking the loss. The last time when we went through a major correction, I held out. That was rough, but most of them came back.

I don't give advice to people because I have no true expertise in this area. My husband prefers stocks and I prefer mutual funds. Some are professionally managed. Everything got hit. I don't need the money now so I am grateful for that.

I won't be looking at the portfolio for a while. Actually, if I had been smart, I should have some cash on the side to make some buys.

Anybody think that this is the bottom?

 

[Zoomie1980]

Some of us saw the writing on the wall and moved out of equities.

I'm heavy in metals and cash right now.

Best take what profits you have now (you've already lost a good bit if you are still in metals) and start moving into quality equities NOW. Cash will need to follow the coming spike in interest rates as banks eventually let go of their bailout money so hopefully your cash is in very short term notes and highly liquid. But staying in any commodity right now is, well....short sighted to be nice.

 

[Zoomie1980]

I should have just chucked them into the shredder. How many years will it take for your portfolio to go back to pre-economic meltdown levels?

Haven't sold any stocks or funds, but haven't bought any either. I imagine there could be some real bargains out there. Rick Edelman says stay in the market because it will come back.

I'm CAUTIOUSLY moving money out of cash now back into quality equities. I think banks will start lending their bailout money by next spring or early summer. If they don't, get ready for the soup kitchens of the 1930's because we are all TOAST and nothing short of hard gold will help. But I'm quite positive right now at least some money will start moving by 2nd Qtr 2009.

Hedge your bets, start putting some (a little, not a lot) cash back into equities in your 401k but hedge by doing so slowly and keep 10%-20% in Gold (if your 401k has a metal instrument, if not at least try mining stocks..). At the first sign of sustained new lending open the spigot into equities. As for cash, get the hell out of Money Market Mutual funds and buy a short term CD or just stick it in a savings account at your local bank. You may be "locked" though if your Money Market fund is selling for less than $1 a share..... Kind of stuck if in a 401k, though.....the downside of those is their lack of options in times like these....

Now that's just me and I am no professional at all...

 

[Zoomie1980]

Hopefully, the stocks will come back in ten years. By then, I will need the money for my kids' college.

Honestly, I can't see myself taking the loss. The last time when we went through a major correction, I held out. That was rough, but most of them came back.

I don't give advice to people because I have no true expertise in this area. My husband prefers stocks and I prefer mutual funds. Some are professionally managed. Everything got hit. I don't need the money now so I am grateful for that.

I won't be looking at the portfolio for a while. Actually, if I had been smart, I should have some cash on the side to make some buys.

Anybody think that this is the bottom?

My 401k lost about 45% after 9-11. Made all back by 2005 and was up very nice by mid 2007. Lost 45% again in this one but even then I'm still well ahead of my last bottom in 2002 on that account anyway. It's all paper until you sell, though. If you time horizon is 10+ years, I'd just sit tight, you've already lost about all you are likely going to lose in stocks and you only lock in your losses now if you sell. At some point you have to put your faith into your fellow Americans at the big banks, that they will do the right thing and start lending again.

If they don't, we are all done for anyway......

Also of note, the main posters in these type threads are Libertarians, and as such, have what many "mainstream" investment professionals would call rather extreme views. These types ALWAYS advocate the same thing in any bear market....buy gold, gold, gold, gold, and more gold, usually about the time precious metals are at or near their market peak. If you didn't buy gold back when it was in the 400-500 range you've missed almost all its run-up. Gold is the worst investment vehicle in the history of mankind, over time. It's 5000 year return to date is right at 0%. It's a great WEALTH PROTECTOR but perhaps the world's WORST wealth BUILDER.

 

[Toro]

The market is as cheap as I have seen it in my career.

I have been buying stocks for the first time in a while.

 

[Truthmatters]

Pretty simple really , if you have years to go before you retire then you buy low and sell high.

Now it is low.

 

[Toro]

Also of note, the main posters in these type threads are Libertarians, and as such, have what many "mainstream" investment professionals would call rather extreme views. These types ALWAYS advocate the same thing in any bear market....buy gold, gold, gold, gold, and more gold, usually about the time precious metals are at or near their market peak. If you didn't buy gold back when it was in the 400-500 range you've missed almost all its run-up. Gold is the worst investment vehicle in the history of mankind, over time. It's 5000 year return to date is right at 0%. It's a great WEALTH PROTECTOR but perhaps the world's WORST wealth BUILDER.

I tend to agree.

I was told I was the largest owner of gold stocks in the Southeast in my fund earlier this decade. I also do not discount the possibility of gold going over $1000 once again but I sold all my gold holdings around $950 when it was clear that it was breaking down.

I have found that gold bugs view gold as religion more than an investment. Often, this theological acceptance is backed by a philosophy about how an economy should work, particularly from an Austrian point of view.

Gold has done the opposite of what I believe many of the gold bugs thought it would over the past few months. A break down of the financial system was supposed to send gold soaring. It has not. Instead, it has fallen like all other assets, and has dramatically underperformed t-bills denominated in US dollars. It is not hard to understand why, given that contracting credit should hit all asset markets, including precious metals.

Political dogma, whether it is of the sociological or economic, is a dangerous basis on which to build an investment philosophy. I would not be surprised if gold took out its all-time highs. In fact, I think there is a pretty good chance it eventually will do so. However, most gold bugs will not call the top as they look at the world through a dogmatic prism, and they will hand your head to you on a silver platter.

 

[Zoomie1980]

The market is as cheap as I have seen it in my career.

I have been buying stocks for the first time in a while.

I've increased the rate at which I'm moving money out of cash and back into equities now. But being cautious about it. If banks don't start lending in the next three-six months, we are all in for a world of hurt and a 2000 DOW by next summer is not out of the question. But I think they know they have to start lending at some time or they will cut their own throats. No lending, no income and they HAVE to generate income somewhere along the line.

 

[gonegolfin]

Gold has done the opposite of what I believe many of the gold bugs thought it would over the past few months. A break down of the financial system was supposed to send gold soaring.

I think it has done, for the most part, what is expected in such an environment. It has held its value. And in nominal terms, note that it is reaching all time highs in several currencies now. Just not the US Dollar due to the deleveraging and all of the loan repayments in Dollars. The US Dollar rally will not last unless we have a real deflation. And it may not hold at these levels even if we do. The US Dollar is a scary investment at this point in time.

Political dogma, whether it is of the sociological or economic, is a dangerous basis on which to build an investment philosophy.

I do not consider gold to be an investment. I consider it to be wealth preservation. And in this destructive environment for fiat currencies, I think it would be foolish not to own some.

I would not be surprised if gold took out its all-time highs. In fact, I think there is a pretty good chance it eventually will do so. However, most gold bugs will not call the top as they look at the world through a dogmatic prism, and they will hand your head to you on a silver platter.

I will always have a core amount that will always remain in my portfolio. I have the same Gold I purchased in 2004. In other words, it is not eligible for trading. However, I do keep a portion of precious metals for trading and utilize a trading service to do so. This service has called all of the major tops and bottoms as well as the intermediate tops and bottoms. The same with oil, currencies, and bonds. Strictly technical in nature.

Brian

 

[Toro]

I don't have a problem with keeping a fairly small position in gold as a core holding hedge. However, as of the close today, the price of gold has risen by 4.4% per year since the creation of the Federal Reserve, which is slightly more than cash, 1.5% less than investment grade bonds, and 5.5% less than stocks. $1 invested in gold in 1913 would be worth $60 today whereas $1 invested in stocks would be worth $8,555.

 

[gonegolfin]

I don't have a problem with keeping a fairly small position in gold as a core holding hedge. However, as of the close today, the price of gold has risen by 4.4% per year since the creation of the Federal Reserve

The price of Gold was fixed during most of that period. It was obviously not worth the fixed price of $20 in the early 1930's and was not worth $35/oz. when Nixon closed the Gold window. The reason I mention this is that governments have proven over time that they suppress the price of Gold to preserve confidence in their currencies. There is significant evidence that Gold has been suppressed via a variety of measures since the closing of the Gold window as well. Thus, while I purchase Gold and think of Gold as a wealth preservation asset, I also think there is some upside baked into the cake because of the suppression that has occurred. Lately, it has been large short positions by a small number of participants that has been quite influential (Silver as well). But there have been other methods used as well.

Brian

 

[Paulie]

The price of Gold was fixed during most of that period. It was obviously not worth the fixed price of $20 in the early 1930's and was not worth $35/oz. when Nixon closed the Gold window. The reason I mention this is that governments have proven over time that they suppress the price of Gold to preserve confidence in their currencies. There is significant evidence that Gold has been suppressed via a variety of measures since the closing of the Gold window as well. Thus, while I purchase Gold and think of Gold as a wealth preservation asset, I also think there is some upside baked into the cake because of the suppression that has occurred. Lately, it has been large short positions by a small number of participants that has been quite influential (Silver as well). But there have been other methods used as well.

Brian

Exactly.

And Zoomie, I don't think you'll find one libertarian or gold bug for that matter, on here trying to claim gold is a wealth builder. If ANYONE knows gold's true purpose, it's the gold bugs. The reason I advocate owning a good portion of gold right now is the same reason I would advocate it any other time. The US Dollar is an uncertain currency right now, as are the rest of the fiats, and we are BURIED in debt and deficit. There's no rational reason to think we're going to magically pull out of this by inflating. We're going to continue causing more bubbles, as we always do in this Keynesian, fiat system. That's the reason gold bugs push gold so hard, because we believe that this is the time to be protecting what you have.

I will always keep at LEAST 20% of my money in metals. I don't do it to make a profit, and no libertarians that I discuss investing with do, either.

So relax.

 

[Zoomie1980]

Exactly.

And Zoomie, I don't think you'll find one libertarian or gold bug for that matter, on here trying to claim gold is a wealth builder. If ANYONE knows gold's true purpose, it's the gold bugs. The reason I advocate owning a good portion of gold right now is the same reason I would advocate it any other time. The US Dollar is an uncertain currency right now, as are the rest of the fiats, and we are BURIED in debt and deficit. There's no rational reason to think we're going to magically pull out of this by inflating. We're going to continue causing more bubbles, as we always do in this Keynesian, fiat system. That's the reason gold bugs push gold so hard, because we believe that this is the time to be protecting what you have.

I will always keep at LEAST 20% of my money in metals. I don't do it to make a profit, and no libertarians that I discuss investing with do, either.

So relax.

Your timing is way off. 2007 was the time to protect. If you haven't protected anything now, there's not much left to "protect" and trying to do so will only keep you from BUILDING or REBUILDING your wealth. This coming year, may be the best year for wealth BUILDING since the 1930's. Folks should be laying the seeds for big returns 3, 5, 7 years down the road NOW, not well after recovery has already past them by.

 

[Paulie]

Your timing is way off. 2007 was the time to protect. If you haven't protected anything now, there's not much left to "protect" and trying to do so will only keep you from BUILDING or REBUILDING your wealth. This coming year, may be the best year for wealth BUILDING since the 1930's. Folks should be laying the seeds for big returns 3, 5, 7 years down the road NOW, not well after recovery has already past them by.

This is nonsense. It doesn't matter when you buy gold, it will maintain its value while fiat currencies depreciate. What you do by purchasing it is lock in the value of the Dollars you traded, and while those dollars continue losing value, gold does not.

 

[Gunny]

I should have just chucked them into the shredder. How many years will it take for your portfolio to go back to pre-economic meltdown levels?

Haven't sold any stocks or funds, but haven't bought any either. I imagine there could be some real bargains out there. Rick Edelman says stay in the market because it will come back.

You mean those numbers that keep shrinking? Not me.