Taking some PM profits, where to put them?

Jaywalker · August 10, 2011 1:47PM

I'm going to sell some ounces of Au in the next few days for a couple of reasons: I'm overweighted in PMs (I know, some people think that isn't possible), and I think we'll get a correction from the current run-up. Will probably sell about 10% of my stake.

And didn't Jim Sinclair say a while ago that we should take our original investment off the table near this level, and keep the ounces that represent profit? (Play with house money.) Someone who follows JS more closely than I do can probably cite the exact advice.

So what should I do with the proceeds?
--Commodities (oil, agriculture?) ETFs?
--Pay down 4.5% mortgage (the house is a deteriorating asset for the time being and will possibly go down another 20%, but I need a place to live, and I'm not going to walk away from my mortgage.)
--Keep it in cash (another deteriorating asset)
--Wait for the correction and buy back into Au
--Ag
--Farmland
--Stocks
--Other?

I know this subject has already come up at times. Just thought it was time for fresh answers.

percyb · August 10, 2011 2:23PM

Farmland!

zrlevin · August 10, 2011 2:30PM

I've done the same thing. I been putting the proceeds into the stock market.

RedTiger · August 10, 2011 2:34PM

I take it this is long term money. Invest in what you understand. Where else have you invested money? If you are comfortable with other asset classes, put it there to balance out. If you are an investing novice, take some time to learn about stocks, bonds, real estate, and make an informed decision and let it sit for now. Investing is much more a marathon than a sprint. Sound financial habits, such as living below ones' means and a high saving rate will tend to mean more than where money is invested.

Short term trading can be exciting, but maybe 10% of those that try their hand at that, that make much money at it. The rest do about average, or a bit below, with a fair sized group that blows up and loses everything. I'm sure some of the plungers will come along and tell you to pile all the money into some short term trading vehicle.

Some popular broad stock market ETFs are VTI and VEU. More boring are various bond ETFs such as SHY, BSV, and BND. Some sectors mentioned recently are agriculture (MOO), and water (PHO). If you want income with a decent chunk of risk PFF is a preferred stock ETF, yielding 7.7%. The downside is that PFF will go down if the stock market continues down, and if the economy tanks into severe recession, many preferred stocks will defer their dividends and a few companies will go under and never pay. Again, don't buy anything based on what anyone replies, do some homework and understand what you are getting into, in terms of risk, reward, expenses, commissions, etc.

Artist · August 10, 2011 3:20PM

Hmmm... it seems like when people panic, they a.) sell stocks, and b.) buy gold. Seems like you could make some nice money by betting this trend: sell gold when it runs up & use the money to grab stocks that everyone is trying to dump, then when the stocks rebound some, take those profits and put them back into Au which hopefully will have 'corrected' by then.

morgantype · August 10, 2011 3:21PM

My two cents - real property

derryb · August 10, 2011 3:40PM

cash, await buying opportunities as they appear

goingbroke · August 10, 2011 7:55PM

<< I've done the same thing. I been putting the proceeds into the stock market. >>

WHAT?

pmcollectour · August 10, 2011 8:12PM

I disagree with your premise that we'll get a correction from this "run up". Like I've said before, if Gold has gone from 1670 to 1770 in a week, that is like a stock going from 16.70 to 17.70 in a week. Does that stock need a "correction" ?

But if you have the urge to sell, then good luck with your profits. I would not pay down the mortgage. Cash would probably be
the best place until the market creates a bottom that has been tested two or three times.

pmcollectour · August 10, 2011 8:52PM

Year
High
Low
Range $
Range as % of High Price

2009
1007.7
801.5
206.2
20.5%

2008
1033.9
681.0
352.9
34.1%

2007
848.0
603.0
245.0
28.9%

2006
730.4
503.8
226.6
31.0%

2005
541.0
410.4
130.6
24.1%

2004
456.9
371.3
85.6
18.7%

2003
418.0
322.1
95.9
22.9%

2002
350.5
276.7
73.8
21.1%

2001
294.0
255.0
39.0
13.3%

Average 23.8%

These numbers show that the average fall for gold over the past ten years (excluding 2010) is 23.8% annualy.
Just wanted to post these in case you're looking to sell now and get back in at a lower price, if that happens.

jmski52 · August 10, 2011 10:29PM

Actually, I think that Sinclair said quite recently not to sell your hedge (gold).

With this much froth in both the gold market and in the stock market, it's anybody's guess what's coming. The big boys were meeting in the White House yesterday over the "crisis", so step lightly.

OPA · August 10, 2011 10:50PM

<< cash, await buying opportunities as they appear >>

guitarwes · August 10, 2011 10:57PM

<< Farmland! >>

And learn how to use it. If you can grow your own food stuffs you can be that much closer to being "off the grid" in case the grid fails. Solar and wind power suppliments is something to look into also.

Beef up security at your homestead also. Just makes you sleep a little better at night.

57loaded · August 11, 2011 2:04AM

turn back the clock to 08 and buy AAPL

take RedTiger's advice or just cash.

Kip · August 11, 2011 5:15AM

<< I disagree with your premise that we'll get a correction from this "run up". Like I've said before, if Gold has gone from 1670 to 1770 in a week, that is like a stock going from 16.70 to 17.70 in a week. Does that stock need a "correction" ?

cjmezz · August 11, 2011 5:17AM

Farmland

Baley · August 11, 2011 6:07AM

if 10% of your metals holdings is enough money to buy "farmland" then you should probably be giving financial asset allocation advice, rather than asking for it.

braddick · August 11, 2011 6:44AM

Apple.

I see it has an easy $500. stock in the near future. With the release of OS5 and the iPad pro along with the next generation iPhone5 Apple is on a tear.

When their latest OS was launched (LION) there were one million downloads the first day.

Even in difficult times people will go without... but not their smartphones.

TomB · August 11, 2011 7:40AM

I've never owned a smartphone.

JCMhouston · August 11, 2011 9:33AM

I bought a couple thousand shares of Cisco Monday when everything tanked, feeling pretty smart today.

yellowkid · August 11, 2011 11:14AM

<< I've done the same thing. I been putting the proceeds into the stock market. >>

Baley · May 30, 2015 4:17AM

Wednesday August 10, 2011 8:47 PM

I'm going to sell some ounces of Au in the next few days..

Attaboy! It would be interesting to find out where Jaywalker put the profits of getting out near the peak, and how those investments have done

Barndog · May 30, 2015 5:03AM

last time I sold gold, I put the money into a garage (built a garage)

TwoSides2aCoin · May 31, 2015 1:51AM

I keep putting mine back into the business. And to be honest, I hate my business because of that. Fear drives me to conservatorship and the market drove me to approach with caution.
And this thread is 4 years old. Time to get back in, if you want my thoughts 4 years later.

DrBuster · May 31, 2015 10:34PM

I made a thread back in the 2011 day about selling off a 1/3 of the stack to maybe put into the market. Didn't do it, but if I had and threw it into my picks for just the stock pickems here I would have been sitting about 6x~ prettier for sure.

RyansRust · June 3, 2015 8:09AM

If I had money, farmland. Since it's what I do Mon-Sat. But only if it had a well and you get the rights. But only short term. 10-15? years. Farm it now and eventually sell to the solar companies as regulations on Food safety, air quality etc make it harder and harder (costly) for farmers . Oh and don't forget not too many young people want to move into farming. Should be a shortage in the future.

Taking some PM profits, where to put them?

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