401ks

[DEforRP]

It’s my opinion that stocks really don’t do as well in the long run as most of us think. If you’re a good trader than yes stocks are great but if you’re a buy and hold investor it’s not quite that cut and dry. It’s my opinion that the indexes and prospectus overstate gains and that creates the feeling that people are making lots of money even if it’s not entirely true. Honestly if you look at the stocks of companies that have been in business for long periods of time the chances are good that a savings account has delivered a better return. Even today with the stock indexes up 50% from the lows early in this decade many stocks are still at a lower price than they were in 2003. The Dow regularly rotates in good industries and cycles out the bad companies overstating a typical investors returns. I think only one of the original company’s is still in the index (GE). Many of the others eventually became worthless stocks over the years. Mutual funds do the same thing closing bad funds and dropping the investor’s money into the remaining funds with good return records. They just keep creating new funds to slowly remove the bad performing funds from the record. Unfortunately few people ever actually get the returns that are advertised over time. Plus math works well at overstating gains and making losses look smaller, just think about it a 100% gain is erased with a 50% loss, it doesn’t sound like a big deal but this also confuses things. I’m not saying don’t put any money in the stock market but if you think about the current value of old gold coins versus those hot rail road stocks of 100 year ago I think all investors should consider owning some commodities in a lifetime investment plan.

Just my two cents..

 

[Primbs]

Stocks that specialize in commodities look good. Even Warren Buffet has been doing that the last decade.

As the world economy heats up with China and India with 2.5 billion people, there should be increased demand for commodities and machines that help process commodities such as farming and mining equipment, oil and construction.

 

[jonahtrainer]

As the world economy heats up

The snow is falling and rapidly piling up; I'm not sure what you are talking about. BBbbbbrrrrrrr!

 

[Primbs]

As parts of the world economy heat up: Many countries are building their economies as the US falters.

The middle east is getting record prices for oil with their evil cartel. Even Russia benefits from that. These guys are not hurting.

China is building cities that are going make New York city look like a small town. China is on a huge economic upturn.

Much of the world is doing well economically. South America and parts of Africa and Russia are making a fortune mining gold, silver and palladium.

Of course much of the US is being outsourced to India and the Philippines and their economies are growing.

I think much of the world is gaining economically at the expense of the US and other 1st world nations.

With the real estate bubble, which involves so much of our economy, the US maybe having the biggest problems around.

Because other parts of the world didn't get caught up in multiple economic bubbles, starting with the stock market bubble in 2000, then followed by a Federal Reserve overreaction by lowering rates to 1 percent which then ignited a housing bubble, the US has a lot to recover from.

 

[lucius]

Unless you have full control over what your 401(k) invests in, I would take the 10% tax penalty and get out. With an understanding of current market conditions to guide your investments, you will more than make up for the loss very quickly. I did that myself about a year ago, and I'm very glad I did.

Agree

 

[JSutter]

How can you buy physical with an IRA?

The same way you can "own" Real Estate, bonds, or stocks with an IRA. You own it but it is held by your custodian.

Sterling Trust offers self directed Precious metals IRA's. Like any self directed IRA you make the decisions what to buy and authorize the purchase. They pay for it from your IRA account and it goes to a third party allocated storage. So you physically own your gold but it is in storage. You can have it delivered at anytime

You can take out up to the amount of your IRA contributions without incurring a tax penalty. Say you've contributed $20,000 into your IRA over 4 years and your metals are now worth $30,000. You can have up to $20,000 of it delivered tax free but you'd pay tax on the other $10,000 if you pulled it because it's considered earnings. The good thing though is that value is figured by weight and spot value so if you had one ounce gold eagles in there that are selling at $1000 when gold is at $950 spot, if you had them delivered each one would only be figured at $950 out of your contributions not at $1000 market value.

Sterling Trust charges around $100 a year to maintain the IRA and the third party storage is $100 a year flat. Both Sterling Trust and the third party storage have been around for a long time and have good reputations. I checked both out with the BBB and they both have great records.

Both KITCO and BullionDirect have IRA accounts available through Sterling Trust and you can have one or both on your Sterling Trust account. You can also buy from any dealer or individual and have the purchase paid for from your IRA by submitting an invoice and payment authorization. Whatever you buy either through KITCO, Bullion Direct, or other sources, once the third party storage recieves it they mail you a certificate of ownership. You actually own physical metals in allocated storage not part of a pool. The same way when you buy Real Estate with an IRA you get copies of the deed but the deed is actually held by your custodian but you can buy or sell it at your discretion and recieve cash up to your total IRA contributions without incurring tax [on a Roth IRA] in the case of metals you can have them delivered to you or sold back onto the market and recieve cash or have it rolled back into the IRA.

This is a great option for anyone who wants to hold a lot of precious metals but is worried about storing them themselves and not wanting to be part of a pool where you may or may not have access to your physical metals. I have precious metals that I hold physically and I have physical metals in my IRA that I can get at any time. Better than holding my entire inventory at my residence.

There are requirements on what metals you can hold in your IRA. They have to meet a certain fineness requirement so you can't have "junk" silver or Krugerrands because they're not pure enough but you can have Canadian Maple Leafs, U.S. Eagles, or bars and rounds from recognized COMEX companies that meet the fineness requirements. You can hold Gold, Silver, and Platinum.

You can also get a Sterling Trust Flex IRA that lets you hold metals, stocks, bonds, real estate, and unconventional assets. Overall it's a pretty good program for anyone that wants to be well diversified and have physical metals in their IRA.

Here are some links for more info.

http://bulliondirect.com/IRA/overview.do

http://www.sterlingtrustcompany.com/Default.aspx?tabid=409

 

[scooter]

It’s my opinion that stocks really don’t do as well in the long run as most of us think. If you’re a good trader than yes stocks are great but if you’re a buy and hold investor it’s not quite that cut and dry. It’s my opinion that the indexes and prospectus overstate gains and that creates the feeling that people are making lots of money even if it’s not entirely true. Honestly if you look at the stocks of companies that have been in business for long periods of time the chances are good that a savings account has delivered a better return. Even today with the stock indexes up 50% from the lows early in this decade many stocks are still at a lower price than they were in 2003. The Dow regularly rotates in good industries and cycles out the bad companies overstating a typical investors returns. I think only one of the original company’s is still in the index (GE). Many of the others eventually became worthless stocks over the years. Mutual funds do the same thing closing bad funds and dropping the investor’s money into the remaining funds with good return records. They just keep creating new funds to slowly remove the bad performing funds from the record. Unfortunately few people ever actually get the returns that are advertised over time. Plus math works well at overstating gains and making losses look smaller, just think about it a 100% gain is erased with a 50% loss, it doesn’t sound like a big deal but this also confuses things. I’m not saying don’t put any money in the stock market but if you think about the current value of old gold coins versus those hot rail road stocks of 100 year ago I think all investors should consider owning some commodities in a lifetime investment plan.

Just my two cents..

The good advice in this thread has slowly started to fade.

Does the poster who I have quoted believe that people buy the hot stock and then never sell it when it becomes not as hot? You say that the DOW rotates stocks to keep the indexes high, but how about those folks who have their 401k invested in the DOW index? They will get the benefit of the rotation and will perform exactly as the index has over the long run. And this is way better than savings rates.

The people who don't beat inflation investing in stocks are the ones who panic and sell at the bottom only to come back and buy in when things look rosie again. This is exactly what people are advocating in this thread.

Go ahead and take the penalties for all I care. Put all your money in gold and forget the stock market. Then when we have commodity deflation again as we did in the 80s and 90s, you will wonder why your full account is cut in half while those diversified in stocks, commodities, and other assets will only be hurting in one part of their portfolio while the rest is performing well.

Not being diversified is a big mistake. If you are making bets that the whole system collapses... then that is just a gamble and is not smart investing.

 

[Primbs]

The good advice in this thread has slowly started to fade.

Does the poster who I have quoted believe that people buy the hot stock and then never sell it when it becomes not as hot? You say that the DOW rotates stocks to keep the indexes high, but how about those folks who have their 401k invested in the DOW index? They will get the benefit of the rotation and will perform exactly as the index has over the long run. And this is way better than savings rates.

The people who don't beat inflation investing in stocks are the ones who panic and sell at the bottom only to come back and buy in when things look rosie again. This is exactly what people are advocating in this thread.

Go ahead and take the penalties for all I care. Put all your money in gold and forget the stock market. Then when we have commodity deflation again as we did in the 80s and 90s, you will wonder why your full account is cut in half while those diversified in stocks, commodities, and other assets will only be hurting in one part of their portfolio while the rest is performing well.

Not being diversified is a big mistake. If you are making bets that the whole system collapses... then that is just a gamble and is not smart investing.

Commodity prices are not discounted at the moment. One should exercise caution with these high prices.


Commodities are getting high in price. A slow approach might be needed. Many who bought gold and silver years ago might start dumping them on the market now driving prices lower and holding prices steady.

New mines are being opened to increase the supply of silver and gold.


Warren Buffet bought silver at 4 dollars an ounce. George Soros bought silver mines.


http://topics.nytimes.com/top/refer...rren_e_buffett/index.html?s=oldest&offset=120

http://www.pbs.org/newshour/bb/business/jan-june98/silver_2-25.html

http://www.nuwireinvestor.com/articles/gold-overvalued-or-undervalued-51418.aspx

 

[DEforRP]

I didn’t say to put all your assets in commodities, I just said stocks don’t perform as well as the average person thinks they do over time and that a stock buy and hold strategy it not such a great idea. I agree commodities prices could go down but over a lifetime but I still think it’s a good way to store some of your wealth.

I said if you’re a good trader stocks will work, but lets be honest most people WILL buy and hold funds and stocks. Oh and those mutual funds you love so much have lots of portfolio turnover and distribute lots of capital distributions that you will pay tax on annually, however if they go down in value later you can’t get that tax back without having a capital gain to offset it.

I’m just saying if your going to invest in stocks make sure you set stop loss orders or you will just go full circle with each bull and bear market. I’ve seen many people do this in my life and I’ve decided at this point not to be one of them.

I believed the same things your saying now until I learned otherwise from experience.

Just remember the same media that ignores Ron Paul is also the source of most people’s investment information and education.