Author Topic: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...  (Read 3192 times)

Stackbuilder

  • 5 O'Clock Shadow
  • *
  • Posts: 2
I truly believe we are near the end of a economic cycle in which we WILL (as history has proven) see the collapse of the US dollar. After seeing a 15% jump since election day, I have taken everything off the table. I am in cash in all of my investments. Almost 20 Trillion in debt, stock market bubbles, bond market bubbles, housing bubbles, derivatives worse than 2008, exorbitant student loans and credit facilities... bad, just really bad.

Rather be 15 minutes too early than 15 minutes too late. I would like some advice from similarly-minded mustachians who may be taking a similar route. I currently have assets as follows:

$50K Traditional 401k from Previous Employer (MM Funds) - could be rolled over
$13K ROTH 401K with Current Employer (MM Funds) - No options except mm funds/bonds/equities
$3K ROTH IRA (cash) - could be rolled over
$3.8K Traditional IRA (cash) - could be rolled over

$14K in Savings - Open for ideas

0 credit card debt
Renting, have car loan @ 1.99% - no expeditious hurry to pay off

33 years old and curious what preventative steps others have taken in preparation for a potential US dollar collapse. Anyone have experience with Gold-IRAs or any other asset classes that would fare well in such a frenzied economic environment? Any positive insight on non-retirement assets is welcomed as well. Thanks guys/gals.

- Jonathan

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 7254
  • Age: 39
  • Location: Seattle, WA
    • My blog
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #1 on: April 10, 2017, 10:00:30 PM »
Honestly...I think if you're truly worried about an economic collapse gold isn't going to do you a whole lot of good, especially if it's gold in someone else's vault. An ounce of gold is too valuable to be of much use in everyday commerce. Silver has some plausible use here but even then why would you assume we'd go back to using pieces of metal instead of something new like a cryptocurrency?

As for me, I'm still invested in the stock market. I remember when we bought our house seven years ago our mortgage rate for a 15-year loan was 4.25%. People were saying at the time that interest rates had nowhere to go but up, and that the increase would happen any day now. What happened since then? Rates have gone down farther! Maybe they'll go up tomorrow, maybe not. Maybe we'll have some inflation, maybe not. Either way, the businesses I own through my index funds will keep operating and generating profits over the long haul. I'd like to see your lump of gold do that!

JAYSLOL

  • Handlebar Stache
  • *****
  • Posts: 2139
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #2 on: April 10, 2017, 11:31:50 PM »
I truly believe we are near the end of a economic cycle in which we WILL (as history has proven) see the collapse of the US dollar. After seeing a 15% jump since election day, I have taken everything off the table. I am in cash in all of my investments. Almost 20 Trillion in debt, stock market bubbles, bond market bubbles, housing bubbles, derivatives worse than 2008, exorbitant student loans and credit facilities... bad, just really bad.

Rather be 15 minutes too early than 15 minutes too late. I would like some advice from similarly-minded mustachians who may be taking a similar route. I currently have assets as follows:

$50K Traditional 401k from Previous Employer (MM Funds) - could be rolled over
$13K ROTH 401K with Current Employer (MM Funds) - No options except mm funds/bonds/equities
$3K ROTH IRA (cash) - could be rolled over
$3.8K Traditional IRA (cash) - could be rolled over

$14K in Savings - Open for ideas

0 credit card debt
Renting, have car loan @ 1.99% - no expeditious hurry to pay off

33 years old and curious what preventative steps others have taken in preparation for a potential US dollar collapse. Anyone have experience with Gold-IRAs or any other asset classes that would fare well in such a frenzied economic environment? Any positive insight on non-retirement assets is welcomed as well. Thanks guys/gals.

- Jonathan


If you are worried about the US economy, why not invest in an international index fund?  Every country in the world would have to crumble to the ground for that to go to zero.  Does that seem likely?  Or better yet, keep some of your money in the US market, some in international markets and some in precious metals if you really must. 

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 7916
  • Age: 1
  • Location: Earth
  • K Thnx Bye
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #3 on: April 11, 2017, 06:18:08 AM »
If the US dollar collapses, you have much greater things to worry about than your portfolio.

ooeei

  • Handlebar Stache
  • *****
  • Posts: 1142
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #4 on: April 11, 2017, 06:49:53 AM »
If the US dollar collapses, you have much greater things to worry about than your portfolio.

Agreed.  If you're seriously worried about the US Dollar collapsing, I'd start learning how to garden/farm and get started. 

In reality, plenty of businesses should continue to do fine even if the dollar collapses.  People will still need all sorts of things, and will buy them with whatever the new currency is.  Whether you trust the stock/market system during a time like this is another issue. 

Tetsuya Hondo

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: 1960's Tokyo on the Bad Side of Town
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #5 on: April 11, 2017, 07:54:58 AM »
Where are you hearing this? What are your sources? Why do you trust them?

Because I swear I've been hearing this talk for a couple decades now and in every single case its been by people selling gold.

Soooo...long story short. It's not something I put much stock (huh huh) in.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #6 on: April 11, 2017, 07:56:20 AM »
You are listening to too much AM radio.

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1686
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #7 on: April 11, 2017, 09:27:45 AM »
If the USD collapses, guess what:  "Exports will explode!"  and imports will get more expensive (likely unemployment will go down).

Gold:  Historically a bad investment.  Up and down with a terrible long term return.

For someone 33 years old, I would go here to build a portfolio:  http://paulmerriman.com/vanguard/

I would choose "aggressive" or 100% equity if you don't need the money for 15 years.  You can go more conservative (if you're really scared, choose 50% equity, that's ok too!).

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3053
  • Location: Emmaus, PA
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #8 on: April 11, 2017, 11:05:03 AM »
So you're a skilled hunter, right? That's much more useful in a TEOTWAWKI scenario than gold, especially 'virtual' gold.

Rimu05

  • Bristles
  • ***
  • Posts: 291
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #9 on: April 11, 2017, 11:29:35 AM »
I recommend tulips. Buy tulips!

Stackbuilder

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #10 on: April 11, 2017, 04:46:08 PM »
I am not asking you to agree with my position, rather, keep an open mind regarding current economic/political events in our country. If you have netflix I would encourage you to watch a documentary featuring prominent scholar Noam Chomsky, Requiem For The American Dream.

Has anyone invested in physically backed gold?

JAYSLOL

  • Handlebar Stache
  • *****
  • Posts: 2139
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #11 on: April 11, 2017, 07:17:11 PM »
I am not asking you to agree with my position, rather, keep an open mind regarding current economic/political events in our country. If you have netflix I would encourage you to watch a documentary featuring prominent scholar Noam Chomsky, Requiem For The American Dream.

Has anyone invested in physically backed gold?

The only gold i have is in my safe, its not a lot, and only makes up 1% or so of my portfolio (silver makes up another 3%).  For me, basically it's a way to store a cash equivalent that more or less keeps up with inflation long-term, and is ocassionally an investment rebalancing tool.  4% precious metals probably makes me at the extreme end of the scale for Mustachians, so advice on them may be hard to find around here. 

 

AlmstRtrd

  • Stubble
  • **
  • Posts: 183
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #12 on: April 11, 2017, 07:45:15 PM »
You don't have to be a doomer to believe that gold can play a part in a balanced portfolio.

Check out www.portfoliocharts.com for some lazy portfolios that include it. Generally gold will do well during periods when the US Dollar is weak and poorly when it is strong. It's vice versa for stocks so the two assets are relatively uncorrelated.

Ray Dalio has said, "If You Don't Own Gold, You Know Neither History Nor Economics". But he also makes money on stocks and bonds. Gold can be a good tool for smoothing out returns but it will also bring down overall returns when the stock market is humming along.

GhostSaver

  • 5 O'Clock Shadow
  • *
  • Posts: 86
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #13 on: April 11, 2017, 08:01:52 PM »
Ray Dalio has made his money by charging chumps 2 and 20 for no alpha and, unless I'm mistaken, does not have any training in history or Econ beyond whatever he did to earn his bachelor's. So I'm not sure he's a good source of advice.

If you believe you have something figured out about the path of commodity prices (I highly doubt that you do), then buy some shares of Rio Tinto or whomever.

To the extent that commodities can be a useful part of an optimal portfolio because they might be negative beta - I guess that's possible, but is anyone here actually calculating a Markowitz frontier and then borrowing at next to no cost in order to lever up to their desired level of returns?

canisius

  • 5 O'Clock Shadow
  • *
  • Posts: 49
  • Location: Dallas, TX
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #14 on: April 11, 2017, 09:18:29 PM »
This is based on emperical experience of family members who went through the collapse of the FSU and inlaws who went through inflation, and the revaluation after the civil strife in Peru.

1.) Stock in both cases was valid. Admittedly a lot was new stock, but using good value strategy,  most rose even after extreme fluctuations.
2.) People did trade with hard metals (and also bullets). However, this had the effect of sometimes attracting less than scrupulous officials and black market.
3.) Both sides ultimately suggested food. If you're worried about TEOTWAWKI, it's nice to have currency that you can eat. Also, it was the easiest to barter with.

So, if you're making that type of "investment " stock up: https://store.lds.org/webapp/wcs/stores/servlet/Category3_715839595_10557_3074457345616706370_-1_N_image_0?catalogId=10557&langId=-1&storeId=715839595&krypto=qhA2Yx8xBD%2FA7HVvZ%2BqJQM2Qbqq6uM4mHQ0FLw6FnoXYejk840%2FUPF0n5PIknxXLJx3x9CMzOO5lNTgfSokvfUC628fIhgPRlzZQeBXrZ%2F6gKbYBfsy%2FeiLh7nroTGQtJIT5ObYVrSC%2BPgzBReVJbBUdu8WRmRyer021xq7hxxs%3D&ddkey=https:SetCurrencyPreference

That said, for a mustachian, most of the resources will be covered by total market index fund. Although, I would recommend international (there have been national collapses, but there are no recorded incidents of everything collapsing) and REITs as additional. I don't care how bad the economy is, someone is paying rent.
« Last Edit: April 11, 2017, 09:28:25 PM by canisius »

aspiringnomad

  • Pencil Stache
  • ****
  • Posts: 956
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #15 on: April 11, 2017, 09:25:29 PM »
similarly-minded mustachians who may be taking a similar route.

I think you're barking up the wrong tree. Doesn't Zero Hedge have a forum?

w@nker

  • 5 O'Clock Shadow
  • *
  • Posts: 39
Re: Reallocating Investments: Thoughts on Gold? Gold-IRAs? PMs? etc...
« Reply #16 on: April 11, 2017, 10:26:01 PM »
I don't share the OP's gloomy outlook, but I do invest 2-4 percent of my portfolio in physical gold and silver.  The term "investment" is actually a misnomer here, as I have no expectation of making a real return on this tiny sliver of my portfolio.  Instead, I view it as an insurance policy - against a variety of long- tail scenarios.  I am particularly fond of the notion of having some tangible wealth that is outside of the system - beyond the reach of bureaucrats and populist revolutionaries.

That said, I think going to 100 percent cash as the OP had indicated is a very gutsy, and historically foolish, move.  The remaining 96-98 percent of my portfolio is in equities.