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Buy-And-Hold (And Lose For 10 Years?)
"The Fed has created a world where the best action may be to cash out; not buy high - and wait. You can’t squeeze water from rock. Wait for the rain."
As John Hussman simplifies in the following chart - valuations matter (in the long-term - and that's the period we are constantly told to consider by the talking-heads and asset-getherers)
From here, anything can happen in the short-term... but in the long-run - it's clear where we go.
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Buy and hold, you mean gold?
You mean marriage?
No, thanks. Too much blood on your face.
ya mean the red badge of courage?
Considering what happens in divorce & how many men or women are just stupid, horrible spouses, I'd say it's not bravery. If you meet the right one, which is a rarity, it's a good thing. If you don't, your life is destroyed emotionally and financially.
Buy and Hold has always been for the un-washed public. The Brokers couldn't believe their luck when that Ad. Campaign started producing results.
If all you did since 2010 was buy ultra market indexes like QLD or SSO and then went to sleep you would have made well over 100% since then. TPTB want the "market" to go up. Fundamentals, logic and reason are irrelevant when the "visible hand" is directing traffic.
You can pick any two data points to make whatever argument you want.
My prediction: Who knows ? I have absolutely no idea what's gonna happen.
Now its about political moves by crazy humans 'in charge' and flocks of black swans incoming.
Nothing to put on a chart.
If you had bought SSO at the market bottom you would be up over 400% since then. I think any young investor would be wise to use SSO and UWM as the core of their portfolio. Lots of bumps but long term you will kick ass, especially under a dollar cost averaging program.
I do know that over the last 10 years my simple 6 managed fund portfolio (with 12-b1's) has returned well over 8% annually about 1.2% above the market as a whole. I don't understand this guys numbers, but maybe he is just using the averages without the dividends included.
Bottome line is don't trust anything you read here or elsewhere to be the truth without researching it for yourself.
I only trust mathematical facts. It's really that simple.
All by design.
Now that the Wall Street Warlocks have most assets captured in the 401K/IRA/Pension prison they can rotate in and out and buy low/sell high while the sheeple ride the waves getting seasick below decks chained to their oars.
When I started feeling concerned about 401K participation a couple of years ago I tried roll money out of that into an IRA, (as another coworker had in 2007) by doing an, "In Service Withdrawl". They rejected that and stopped doing IRA contributions as well...Disappointing to say the least!
I have a small 401k.
Nothing gives me more pleasuret than to call Vanguard and answer their query as to why it is I won't buy stocks. When I tell them it's because it he NYSE ,et al is a rigged game , I love it when they are at a loss for words. Then I end the call with a polemic about why it's mathematically impossible for the NY traders to sell/buy futures in Chicago milliseconds after the various numbers are released from the Bureau of lies.
Yes I say. How is that that their orders are filled before light could possibly travel from NY to Chicago? It's because the firms have the numbers before the little guys read it off the wire. Totally criminal. Don't even get me started on HFT. Fuck you NY. Triple fuck you from the fly over Midwest.
"I have a small 401k."
I made a decision to not "strand" my saved labor on that island anymore a few years back. Its not easy, watching the fake digits fly by, knowing I could and did contribute at one time to that...but it will be of some small comfort when they go flying by in the other direction ;-)
A 401k is a one way bet, held in the hands of people I wouldn't trust to walk my dogs.
I haven't made a 401k contribution in 14 years. Now I'm on to the other rigged SEPIRA. It's tough because there's really no where to go. I think I'm
Just glad my DAD didn't live to see this BS.
It's not complicated, people.
We really have turned Japanese in more ways than one, and look to the future & current Japanese debt loads, deficit spending, monetary & economic policy, and demographics if you want a forecast for the U.S. (with or without the continuing H1B Visa immigration, "Dream Act," etc. loved by both same political parties equally).
The U.S. Is now officially above 100% on an (official) debt to GDP ratio, which is where Japan was in the early 90s (when the Nikkei was still near 40,000), and now Japan has a debt-to-GDP ratio of 240% with a Nikkei that's down 90%+ in real terms from its 1990 highs.
Look who is (and has been) advising Japan on its monetary & fiscal policies for the last 24 years (it's the same group of clowns in control of U.S. monetary policy).
All debts/deficit spending will be monetized & all such economies will continue to be financialized - that's the only path to delay (kick the can) the real and full consequences of real productivity lagging real demand in economies such as Japan, the U.S. and nearly all in the EU.
Idiots. How much have you left on the table by not owning stocks in your retirment plans the last 5 years? Markets could drop 40% and people who dollar cost averaged in, would still be ahead over that time period. Especially if it is small account where each months contribution is more than 1% of your balance. In fact people in that situation should hope for the market to get crushed so they buy more and more shares with each contribution.
Ummm.At Dow 16,000 we still are only 13% higher, peak-to-peak, than where we were before the collapse of 2008.
Corporate debt levels are higher too. What happens when it's time to roll?
If you don't hold it, you don't own it. Probably was the tipping point for me to step out of the normalcy bias.
I sure wish I had cashed out of all my silver while it was still worth something. During that brief window, I mean.
I might have done so, but (1) I thought it would be much harder, and take much longer, to liquidate physical silver than it was, involving shipping it cross-country in bulk; I did not know a nearby coin dealer was able to handle that kind of weight; and (2) there still appeared to be good reason then to expect its value to rise even higher.
it still will - hang in there - they want you to sell now -
Too late: I already sold it all, at about a sixty percent loss. I had no choice.
Sorry it came to that. I sold the majorit of my 1 oz gold wafers for the same reason. Starting at 1700 into the 1800 peak and last one 1460 on the other side of the peak.
Was in for an average of 1300 (cdn)/oz so not too bad.
On the other hand the smarter choice would have been to use some cash to use GLD puts or slv puts and keep the gold but I just wasn't smart enough and like you, I did have actual real need. I still have gold & silver and I'm planning better this time. This time I've got options, got USLV shares and planning a better use of the cash buffer so if any is to be used early, harming my ability to use shorts later, it's to get something else physical of good holding value and/or dire real need so I can live with the exchange of opportunity cost. Food, tools & medicine certainly have strong value to me alongside gold & silver atoms.
Your gold and silver is a physical savings account you keep at home for when you need it.
The fact that it's indeed a effort to sell stops you from spending it in a sudden move of a need to spend.
But most people saved gold and silver and if they didn't would most likely spend the money on foolish crap with nothing to show for it 2 years later.
But you're completly right that it's not that easy to sell fast and get a good price for it. If you want to sell fast, you'll lose 30%.
You need to take your time and liquidation should not be a forced one or you'll lose money on it.
And I even think it to become more difficult in the future because of taxation issues on silver.
I hold a very large part of silver bullion and I also hold 1500 silver numis coins which hold a pretty high value. Those are even more hard to sell at a good price.
And no, I'll never sell at spot and no middleman will take a profit from my investment. I guess I'll take my time selling them piece by piece when I'm old and retired because I simply don't have the time to spend 300 hours cataloging and putting them online for sale right now.
And my actual dream is to simply give them to my kids when I'm old hopping I've never needed them. A family treasure.
fully agree 100%. That's also my plan. Pass on physical gold and silver to kids in the future.
Hanging on is going to be tough. You know what Iron Mike said about having a plan....
"Everyone has a plan until you bite their ear off"?
If I may ask, what are your favorite numis? Mine are the pre 64 Washington quarters and Mercury dimes tho I do stray from those into Morgans, Walking Liberty and Franklin halves. I think the Washingtons are still fairly cheap and easy to find and I think they have a chance to appreciate the most. I tend to buy them graded already and I typically keep to MS65 or above.
I've been so preoccupied trying to find the best price I've spent the past few months putting the finishing touches on an application (I'm a professional developer by trade) I've been writing that utilizes the ebay SDK to mine for coin info, pictures, pricing and especially the Cert Nums. My collection isn't anywhere near as extensive as yours but half of them cost right around what it cost to actually grade the coin.
I kinda became fascinated with historical coins when I lived in Germany as a teenager and found a 1930s 10 phenning piece in the front yard of my housing Bldg. Swastica and all. It was actually in pretty good shape too.
Well, I've got the entire latin currency collection starting form the napoleon 1 era untill WO1
The entire South and american collection, the entire english crown collection.
I'm more fond of all those crowns than i am about bullion to be honest. I hot all the big famous once but only a few are really collection worthly.
Take a morgan or a peace dollar and compaire that to a eagle and I'll take those anytime before a bullion coin.
The englisch crowns, wow!
And all the french crowns wow!
And the brazilian reis crowns and the spanish real crowns and mexican peso crowns. love'm!
It started with a morgan collection but I really expeanded it to all the silver crowns starting from the 17th century.
My real favorites? The Leeuwendaalderds, Lion Dollars as the Americans cal them.
16th and 17th century. I buy every single one of them on ebay for the last 5 years.
And another coin of which I buy almost every single one that's for sale on Ebay are the 5000 rupee celyon 1956 2500 birthday budha coins. I'm addicted to that very single coin :)
I don't think I'll ever sell my numis to be honest.
They all tell a story and I think I read a book about them for every 20 numis coins I have. They're my babies :)
And I haven't showed them to anybody. Even my wife isn't allowed to tough them :) At the beginning I once showed a few and she dropped some on the table and that meanth she could never tough any anymore :)
Wow, Thanks for sharing. You seriously went into the foreign territory. I haven't gone there only because I thought it may be harder to sell them (pffft, yea right) than American stuff becase no one wouldknow about "foreign stuff". I'm a knowledge freak so I tend to watch stuff that "teaches" something and every time I watch something about finding sunken ship treasures, I think it'd be really cool to actually have Pieces of Eight and things like that. I'll get there once I finish my quarters and dimes.
"she dropped some on the table "
AHHHHHHH! LOL. Omg. I show mine to my wife, but I do it while I'm sorta telling her about coin collecting so she knows they cant get banged and scratched.
Death by a thousand fiat paper cuts.
Buy and hold is just a fancy name for a investment gone bad.
Yeah and people tell you: It's just a matter of time and it will go back up. Don't worry! Just wait!
"A long term investment, is a short term gone one wrong".
Gold is like whole life assurance, when it pays off you would rather it had not.
I LOLd. That's a great (and depressing) way to put it.
Well yes if you by without discrimination; but one would think that it matters what you buy and when you buy it. I know what to buy - PM's. And I know when the dumb fucks running this circus beat the cost down it's time to buy.
I still think that contagion is still the biggest risk to the world economy, yet since 2011 that evil word has disappeared from the msm. Google trends: http://www.google.com/trends/explore#q=contagion
Just double up and cost average.
/sarc.
Damn, that makes sense! Then I can get out even at 25 instead of 45.
/s
If it was so worthless nations wouldn't be clamering (except heavily indebted nations) for gold.
The printing end game for the US is already here. The US government knows it cannot afford higher rates.
Gold and silver will ultimately rule in the world of money--even in this "digital" age. The fiat currency(s) will all fail sooner or later--and sooner is my bet.
I'm hanging on to my gold and silver.
Selling your Silver is like selling your kidney, it will get you by in the short term but, down the road you will be hurting...
Throughout the game of life with the current economic mechanism if you do not spend it then they will nickel and dime it out of you in one form or another recycling your value back into the system.
Where can you hide your value in a fiat monetary system where fiat can manipulate all values in everything. NOWHERE.
Once visible to the system then the best laid plans of ban kers / politicians is to remove this value from you BECAUSE IT IS THEIRS NEVER YOURSl
The fact they are trying to get you to give up on it is the best reason there is NOT to sell.
'Hand over the gutter metal, here's some scrip..'
Nah, bad idea. Let them sweat.
According to Tullett Prebon Group Limited:
http://www.tullettprebon.com/Documents/strategyinsights/TPSI_009_Perfect_Storm_009.pdf
perfect storm
energy, finance and the end of growth
Summary
The economy as we know it is facing a lethal confluence of four critical factors – the fall-out from the biggest debt bubble in history; a disastrous experiment with globalisation; the massaging of data to the point where economic trends are obscured; and, most important of all, the approach of an energy-returns cliff-edge.
Through technology, through culture and through economic and political change, society is more short-term in nature now than at any time in recorded history. Financial market participants can carry out transactions in milliseconds. With 24-hour news coverage, the media focus has shifted inexorably from the analytical to the immediate. The basis of politicians’ calculations has shortened to the point where it can seem that all that matters is the next sound-bite, the next headline and the next snapshot of public opinion. The corporate focus has moved all too often from strategic planning to immediate profitability as represented by the next quarter’s earnings.
This report explains that this acceleration towards ever-greater immediacy has blinded society to a series of fundamental economic trends which, if not anticipated and tackled well in advance, could have devastating effects. The relentless shortening of media, social and political horizons has resulted in the establishment of self-destructive economic patterns which now threaten to undermine economic viability.
We date the acceleration in short-termism to the early 1980s. Since then, there has been a relentless shift to immediate consumption as part of something that has been called a “cult of self-worship”. The pursuit of instant gratification has resulted in the accumulation of debt on an unprecedented scale. The financial crisis, which began in 2008 and has since segued into the deepest and most protracted economic slump for at least eighty years, did not result entirely from a short period of malfeasance by a tiny minority, comforting though this illusion may be. Rather, what began in 2008 was the denouement of a broadly-based process which had lasted for thirty years, and is described here as “the great credit super-cycle”.
The credit super-cycle process is exemplified by the relationship between GDP and aggregate credit market debt in the United States (see fig. 1.1). In 1945, and despite the huge costs involved in winning the Second World War, the aggregate indebtedness of American businesses, individuals and government equated to 159% of GDP. More than three decades later, in 1981, this ratio was little changed, at 168%. In real terms, total debt had increased by 214% since 1945, but the economy had grown by 197%, keeping the debt ratio remarkably static over an extended period which, incidentally, was far from shock-free (since it included two major oil crises).
This thread should be renamed the biggest loser thread. Everyone hates buy and hold except when it comes to your losing precious metals. I don't see a situation where long term, the value of precious metals increases while the value of other assets plummets.
Right, because this time things are different. Aren't they always?
It's a cyclic less than once-per-generation outcome but it happens and then when valuations snap back metals retain a higher value than in all the past as well. It's not just price, it's what you can do with those metals and trading them directly for goods with no cash in the middle.