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With all the financial craziness these days, I hear more and more about gold being the smart way to invest. Does anyone out there have any knowledge or ideas on this? And if it IS a good idea, are there any reputable online places to purchase it?
cat, on the cbs news last night they said it was at its all time high since 30-40 years...
go to cbs.com and see if they have a link to that...
if its high.. and bought today..you would have to hold on to it for a very long time to make any money.. I would think...
I've heard the price of gold has skyrocketed right now, so it looks like it would be a good time to sell. I'm just trying to figure if it's better to invest in something other than the norm. Gold, diamonds, etc. I've always tried to keep a little extra cash stuck back in a lock box, but am wondering if I'm missing the boat.
In the day..my younger years...I was a physical therapist...(had to stop...found out I hated to put my hands on people I didn't know)..anywoo...one client was a mall owner. He told me if I was ever to invest, invest in three things...FOOD..everyone eats...CARS..of the future...(he told me this in the 80's and he said.. only if people knew whats out there)..and CLOTHES..textiles...everyone is wearing something on their back... and he said no matter what put 30% of your earnings away..
so you would put 30% away,invest, then live on the rest...OK...do I need to tell you how he lived...lol lol lol
No offense, but this is why most people aren't very good investors. You want to buy LOW and sell HIGH, not the other way around. If gold is at its highest levels in years, it's a 'shoulda done it five years ago' lesson.
Buying gold entails high fees and storage costs. If you must invest in gold, use a commodity fund. There are many different ones, with varying fees and costs. As with any taxable fund, you may have capital gains or capital losses that will be reported yearly to the IRS via 1099 forms.
A good portfolio is diversified between different asset classes: stocks (equities) of varying types including international, bonds, REITs, (and if available to you) commodity funds. Most pension funds will not offer commodity funds because of their high volatility factor. For example, commodity prices such as oil went extremely high last year - remember the $140/barrel oil? - and then sank 68% within a few months. Commodities - and gold is a commodity - are even more volatile than stocks. The only investment that fluctuates even more than commodities is currency exchanges.
Unfortunately, investing is not a simple subject you can master by asking questions in an anonymous discussion forum. I'm an amateur at investing and enjoy the subject immensely, but I spend, literally, hours every day reading finance articles, magazines and newspapers. You can begin educating yourself on the Net with good resources like MSN Money and Yahoo Finance, but do realize this will take time and energy. These are not simple subjects, because money, investing, and legal matters are all intricately intertwined in our everyday lives, and everyone's situation is unique.
Frankly, investing on someone else's advice no matter how folksy and 'wise' it may seem, is just not a good idea. Investing in food, cars, and clothing, might well have netted an unwary investor a lousy portfolio of Chrysler, GM and Federated stocks/bonds. You'd obviously have done a lot better investing in Google, Berkshire Hathaway, and Apple!
Not even pro traders can foresee the future and pick 100% winning stocks. Amateurs have few weapons versus the Big Money that runs the total investment market. But two of those weapons are very real ones - dollar-cost averaging and long-term compounding. We can have patience for a true long-term outlook, keep our management costs low, diversify properly, rebalance regularly, keep our debt low and save as much as possible.
Thank you, cat64129. I feel very strongly on the subject of financial education because we ourselves made a lot of mistakes when younger. Some of our Gen X/Y friends have asked me to think about doing a workshop for them on financial basics, and I'm thinking about this. Some of the thoughts I had are applicable to anyone:
1) Get your legal docs done. If you don't have a will and an Advanced Health Directive, you will leave a mess for your loved ones. Why would you want to do that to them? Find out if your state recognizes will validity with just 2 witnesses, or if it must be notarized. The more money you accumulate in an estate, the worse the mess when you die if you’ve neglected your legal docs.
2) Make a list of your goals: short (less than 1 yr); mid (2-5 yrs); long (10+ or retirement, whichever comes sooner). Always make sure your goals align with your spouse’s goals – they don’t have to be the same, but you should know what you’re saving $$ for. And be willing to compromise – no one has enough money for everything!
3) Honestly assess your current situation. Start eliminating high-interest debt. Make sure you have an emergency fund to fall back on. Save as much pre-tax as you can. Every dollar you save can grow to $3 or more, over 25 years’ compounding, with even just average results in the stock market. A diversified portfolio helps mitigate risk yet still gives good returns over the long run. Rebalance that portfolio; don’t chase last year’s winner or the latest hot investing fad. It’s been shown that an 80% stock/20% bond allocation does almost as well as a 100% stock portfolio with less risk. A 70/30 mix is even better, and even the conservative 60/40 mix still does pretty well over the long run (meaning at least 20 yrs or more).
4) Remember the rule of Four (and a half): Update your legal docs and goals at any of the 4 life-changing events – Birth, Death, Marriage, Divorce. The ‘half’ is any change of employment, which is so common now for young people. Job change doesn’t usually affect legal matters outside of updating beneficiaries and rolling over old 401k’s into a new IRA, but it definitely affects one’s financial profile and often, goals.
5) Do not beggar yourself for your children or your parents. Too many people short their retirement savings or raid their 401k’s. As the saying goes, your kids can get a loan for college, but no one will give you a loan to retire with! Always explore every service available for helping the elderly first: Federal, state, county, city, charitable – before coming out of pocket to help an elderly relative. It’s a big organizing job and takes time, but again, no one program will cover everything so even with such help, there will be small stuff that you’ll need to pay personally for. You can and should minimize those costs to yourself, because you don’t want to end up in the same situation thirty years from now!
6) Life does not end at retirement – by that I mean, your money will have to last several decades. A modest distribution rate, and timing your retirement to start in an ‘up’ market instead of a ‘down’ market, can keep your portfolio going much longer. Don’t be greedy – if you’re close to retirement and the market is strong, start building a more conservative portfolio. You want to be selling in an ‘up’ market and buying in a ‘down’ one, not the other way around.
7) In retirement you will still have a budget to consider, including housing expenses in one form or another. Clothing budget may disappear, but travel and medical can eat up large amounts of $$ very quickly.
6) Never feel powerless! Money can smooth some of the ‘bumps’ in life, but it has never guaranteed happiness. Having money will not make you immortal, smarter, or a better person. Treasure the people you love, for that’s your real wealth.
May we all be healthy and happy in the years ahead.
May I add one humble thing? LONG TERM CARE INSURANCE! My 69 y o moderately wealthy father just had Medicare, considered himself very healthy for his age, and didn't have any long term care insurance. Then on his 70th birthday he had a hugely incapacitating stroke. He started out with home care, that proved too expensive, then moved to assisted living, still too expensive, now he's in an "upscale" nursing home. Better health insurance could have changed this whole picture.
I have multiple sclerosis, diagnosed when I was 25. I have been on Medicaid/Medicaire almost half of my life and am forced to do pretend "work" to be eligible for the home care I need so my husband can actually work. Does that make any sense? MS can affect anybody, so can a lot of other bad things. HAVE HEALTH INSURANCE Re-evaluate, too, that with every job change.
carrielamont, that's a very sensible suggestion, although I fear we've drifted OT so I hope cat64129 doesn't mind.
I personally strongly believe in using insurance for risk mitigation. My DH and I have LTC policies we purchased in our late 40's. This was very advantageous as he suffered a stroke at age 50 so would not be eligible for a good rate any longer. We have no children to take care of us, and although comfortable in retirement, not enough $$$ assets to self-insure beyond the 3 month elimination period on our LTC policies.
However, for many people it is still very difficult to accept the idea of paying for sufficient life or LTC insurance, separate from health insurance. Sad, but true.
I don't mind at all. Any information anyone has to help us all, is more than welcome! Planning for retirement, in every way, is something we all need to think about. Please feel free to chime in anyone!
However, for many people it is still very difficult to accept the idea of paying for sufficient life or LTC insurance, separate from health insurance.
Until my dad had this stroke, it had never occurred to me. Now my mother and step-father both have LTC policies (although I'm sure it would have been cheaper in their 60's, when they married.) I'm not eligible for anything, and I'm already "retired." But my DH should check into LTC, definitely.
