Are PM's and tangible items the best place for money right now?
BigRed
Posts: 716
Has anyone taken thier money out of stocks and bonds and other paper assets to put in tangible assets? I've been in the stock market for over 20 years but i'm afraid one morning I will get up to see my meager portfolio cut in half or worse.
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<< <i>Has anyone taken thier money out of stocks and bonds and other paper assets to put in tangible assets? I've been in the stock market for over 20 years but i'm afraid one morning I will get up to see my meager portfolio cut in half or worse. >>
The stock market is down about 25% already, so if the total decline is going to be 50% that means that it is half way.
It is rarely a good idea to make "all in" or "all out" kind of investment decisions, especially when prices are moving quickly. If a person can't sleep at night, sell off a bit, like 10% or 20%, not the whole hog. If it keeps going down, perhaps do another chunk in three months. Panic bottoms occur when a lot of people get scared at the same time thinking the worst is yet to come. No one knows what the future will bring, however, prices moving down seem to cause a lot more people to sell.
One way to add pickles to the panic is moving from something that is down a lot, to something that is hot at the moment, only to see that new hot thing fade and slide too. I'm not saying that would be selling stocks and moving to gold, but it wouldn't be that far a stretch given the current environment. Only in hindsight will a person be able to tell what would have been the best move, so don't panic, sell some if a person can't sleep. Sell some more in a few months if a person still can't sleep. Moving it all in one "bold" move, sometimes is done at the worst possible time, the panic bottom.
/edit to add: precious metals can also be volatile. During the recent dip, silver lost about 50% in a few months $20.50 to $10.25, gold 25%, $1030 to $750. Both silver and gold have moved up nicely from their lows, but someone who got scared might have sold at the "panic bottom" and took their losses. At the time of the lows, there was no guarantee that they would bounce, just as now that stocks are down 25%, no one can say for certain if up or down is what comes next.
Yes. I'm lucky that I didn't put it into pms all at once, but I already had a strong position anyway, so I wasn't in a rush.
Alot depends upon your current asset allocations, so the advice I'd give myself isn't necessarily what anyone else ought to do.
I knew it would happen.
<< <i>
<< <i>Has anyone taken thier money out of stocks and bonds and other paper assets to put in tangible assets? I've been in the stock market for over 20 years but i'm afraid one morning I will get up to see my meager portfolio cut in half or worse. >>
The stock market is down about 25% already, so if the total decline is going to be 50% that means that it is half way.
It is rarely a good idea to make "all in" or "all out" kind of investment decisions, especially when prices are moving quickly. If a person can't sleep at night, sell off a bit, like 10% or 20%, not the whole hog. If it keeps going down, perhaps do another chunk in three months. Panic bottoms occur when a lot of people get scared at the same time thinking the worst is yet to come. No one knows what the future will bring, however, prices moving down seem to cause a lot more people to sell.
One way to add pickles to the panic is moving from something that is down a lot, to something that is hot at the moment, only to see that new hot thing fade and slide too. I'm not saying that would be selling stocks and moving to gold, but it wouldn't be that far a stretch given the current environment. Only in hindsight will a person be able to tell what would have been the best move, so don't panic, sell some if a person can't sleep. Sell some more in a few months if a person still can't sleep. Moving it all in one "bold" move, sometimes is done at the worst possible time, the panic bottom.
/edit to add: precious metals can also be volatile. During the recent dip, silver lost about 50% in a few months $20.50 to $10.25, gold 25%, $1030 to $750. Both silver and gold have moved up nicely from their lows, but someone who got scared might have sold at the "panic bottom" and took their losses. At the time of the lows, there was no guarantee that they would bounce, just as now that stocks are down 25%, no one can say for certain if up or down is what comes next. >>
Very good advice. The fact that so many are pondering selling now after a 25% decline demonstrates why the average investor has underperformed the S&P by a significant amount over the years. Set up an allocation you feel comfortable with, and whether it's 100% stocks or 0%, don't let current conditions through you off your plan. There's never really a way to know what's "the best place for money right now" IMHO.