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gold and mutual funds
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any recommendations of a mutual fund that is a mix of balance with precious metals - moderate to low risk? Or any other tips on investing in gold via the market, companies, etc. -- Link to website with more info on this subject?
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42/92
Paul
Moderate risk PM Fund? That's easy there are none!
One item you might be interested in is symbol CEF. This "fund" holds gold and silver metal. My memory says they are not 50/50 - perhaps Gold is 60%. But the fund is backed by metal, not mines. Since my memory is bad you should research CEF and see.
Personally I use FSAGX (no-load!), AU, and DROOY. I think NEM and HGMCY are high risk options also. "High Risk" is only bad in a falling investment!
Wrong! Investments don't know our ages.
For example, I listened to my financial advisor and expected 10% return in 2000 when I invested in the Dow at 11,000. Three years later I should have Dow 14600. That hasn't happened.... one of the following must be true:
The Dow is undervalued by 41% today (I should borrow every dime available to BUY)
Or
The market will return less than 10% for my, make that our, investment career.... regardless of Young or Old.
42/92
Investor A puts $10000 in a 401k at age 25, and the markets take it up 15x by age 60. The next year Mr-Almost-Retired takes a 33% bear market loss, leaving $100,000.
Investor B puts $10000 in a 401k at age 25, but he believes that because he's young he has time to recover from losses. He learns the hard way and loses 33% the first year. Confused, he changes his ways, and the markets take his remaining investment up 15x by age 60.
Since both Investors retire with $100,000, it's clear that the young do *not* recover from losses any differently than the old. The expected return of the markets is not a function of the age of the person tossing hard-earned money in.
I admit people will feel sorry for the old investor who lost, but putting emotions aside, the young lost just as much.
I don't care what age you are. If you want to protect a portion of your hard earned assets, you should be divested at least 5-15% into gold/silver stocks and/or gold/silver bullion. Gold is a poor investment and for some "strange" reasons keeps going up ($424 and counting).
roadrunner
Investor A invests $10,000 at Age 25 with a 10% annual gain for 35 years, that brings his portfolio value to $278,700. Now Investor A loses that 33% in the Bear Market... and his portfolio value is now $186,729, and he's now 61 y/o, close to retirement, yes?
Now we look at Investor B...
Investor B invests $10,000 at Age 25, but loses 33% in the first year, and brings his portfolio value to $6,700. But then, because he is still young, he can invest $3,300 that he lost back into his fund. Then for the next 35 years, he gets an annual return of 10%, and that brings his portfolio value to... $278,700!
$90,000 difference in this example. Now there's the advantage of being able to take the risk when you are young, you can make up your loses, as Investor B did in this example, Investor A on the other hand, since he lost it towards the end near retirement, he has no way of reinvesting to make up for his loses, now he'll just have to work longer, while Investor B may be able to now retire at 60 while Investor A may have to work another 10 years so he'll have enough money to last him...
42/92
So there's no $3300 to materialize and to come to the rescue. I listened and lost my money on stocks.
but the actual percentage raise is different for both investors
Whoa! No way, the market returns what it returns. Even you recommended the S&P 500 Index, and claimed it returns 11% on average. So the percentage return is not different for the two investors.
42/92
It's VERY unconventional to recommend only 50% stocks for the retirement account of a 25 year old.
CNN says 85% stocks vs 15% bonds.
SmartMoney says 89% stocks and 11% bonds/cash.
Calvert says 75% / 25%.
Thanks for spurring the discussion - I am surprised the long term Asset Allocation numbers have changed (again). It was good to get a re-fresher.
42/92
Neither CNN's, Calvert's, or Smartmoney will fit everyone's situation. Likewise, G man's high school textbook knowledge is not the bible when it comes to deciding upon investments.
Liquidity should not be an issue for someone working full time, as you should not tie up your entire savings in investments of any kind, CD's, stocks, bonds, etc. Basically, if your car breaks down, most Americans will either have credit or liquid savings to cover this cost.
I'm not an expert in financial investments, so I won't pretend to be. Others should take my lead. There is no magic formula for suggesting exactly how to invest your money, and an inexperienced person on the other end of a message board would not be the best person to contact for a solution!
So my suggestion to the original poster is to contact your bank, which most likely has a financial plannign division who will explain and review your best options. These people do this for a living, and most likely it is free, until you actually invest, where your financial advisor will incur a commission or other fees. Once you yourself become well versed in investments, you can cut out the middle man and plan investments on your own, but the key is to get yourself educated as much as you can, or trust it to a professional.
I'm not saying professionals are always right, but you'll get far better results than people arguing back and forth on a coin message board.
contact your bank, which most likely has a financial plannign division who will explain and review your best options. These people do this for a living, and most likely it is free, until you actually invest, where your financial advisor will incur a commission or other fees.
I think that is about the worst way to get unbiased, financial planning advice that is in your best interest. The best way, in my opinion, is to do some reading. My favorite basic books include, "The Four Pillars of Investing" (Bernstein), "Making the Most of Your Money" (Quinn), "Bogle on Mutual Funds" and "The Millionaire Next Door" (Stanley). These books are not gimmicky (a la Suze Orman). If after obtaining a basic literacy on personal finance and investing you feel you need an advisor, get recommendations from friends, interview several, and make a choice.
<< <i>There is a lot of dogma and a fair amount of urban legend being dispensed here, but I had to post when I read...
contact your bank, which most likely has a financial plannign division who will explain and review your best options. These people do this for a living, and most likely it is free, until you actually invest, where your financial advisor will incur a commission or other fees.
I think that is about the worst way to get unbiased, financial planning advice that is in your best interest. The best way, in my opinion, is to do some reading. >>
Good point- it depends on how well you know the financial advisor and how long you have been dealing with the bank. I was offering it up just as an example. The reason being, most areas of the country at least have a bank offering financial planning services, but not everyone in rural areas has the option to interview several different financial planners.
Using a professional is the best and simplest route for someone who does not want to take the time to learn how to invest, and who might be fooled into flashy investment schemes through books, gimicks, etc. Suggestions from trusted friends is definetly a good recommendation for books to educate yourself or advice on choosing a financial advisor.... But the point is, you have a lot of options out there, and a single formula isn't going to work for each investor. Talk with a professional if you do not have the time to educate yourself on investment options, because at least you will be presented with different options. It is up to you to decide whether the options presented are in your best interest, and that goes back to the trust issue, and getting suggestions from friends.
I operate under the assumption that know one cares more about my money and financial well-being than I do. Professionals are a mixed bag. Some are excellent, and some are interested in enriching themselves first. If you do not have a decent grasp of personal finance and investment basics, you will likely not be able to tell one from the other.
Robert
Greg Hansen, Melbourne, FL Click here for any current EBAY auctions Multiple "Circle of Trust" transactions over 14 years on forum