San Diego Housing Bubble News and Analysis

gold

Government bond.

Government bond.

During stock market corrections the dollar usually goes up because there is an instinctive flight to treasuries. Which should be soon.

there has traditionally been an instinctive flight to treasuries because they are perceived as rock-solid safe. people have bought them even if they were guaranteed to lock in a small built in loss due to inflation. but what if the flight to safety suddenly switched to another asset perceived as instinctively safe? could that happen? heck yeah.

Maybe 15-20% of my money should go into gold. How do you buy gold with Fidelity 401K account?

That is a good question scaredy and one I have pondered my self considering the precarious nature of world currency politics.

I think we will get an equities crash soon, followed by a below normal flow to treasuries as some people find other safe havens.

I think the dollar will rise again, briefly, and gold will go down, slightly, followed by another huge push up after the crash.

this is not financial advice. im barely qualified to do my own laundry. but you can play gold in your 401k by buying CEF for bullion (safest bet, IMHO, much more real than GLD). also, gold mine stocks--etf index funds like GDX, others easily findable on the internet, which track gold mines. greater leverage than gold alone, riskier, more volatile. SLV for actual silver (i don't trust it), or SLW (i kind of trust it). of course, true gold bugs only believe gold in the hand is worthwhile, all paper is intrinsically untrustworthy. they may very well have a point.

My 401K account gained 65% this year. It is mainly Asian and Emerging market mutual funds.

How did it do last year? What was the combined return over a two year period?

We had an 'unusual' event that caused the market to drop, and possibly overshoot. Looking at the 2 year perspective might give you a better idea.

Can you buy ETFs in your 401k? If so, GLD and IAU are gold ETFs.

gld = derivatives

cef = bullion. audited in canada. since 1964 i think.

CEF is commodites. Not just gold.
http://finance.yahoo.com/q/pr?s=CEF

http://www.centralfund.com/

not sure; i think it's actually just 50-50 gold and silver.

No, my Fidelity 401K sucks. No option for precious metals. I just pushed 25% of my money into US Bond Index. The rest are equally divided into Emerging Markets, Asia Pacific, and Europe. Nothing in US stocks now.

jimmeyle, I'd pull out of your 401k. Tax deferral doesn't mean anything if you lose the money. I know I stopped contributing over a year ago. I'd rather eat 50% in taxes than 100% in losses.

As to where to keep your money, a mattress is a good option at this point.
Josh

Cash and short term government bonds.

I am a big time advocate of Gold but we need to be resonable here.

Someone just suggested you withdraw your money and take a 50% penalty, that is nuts!

If you no longer work for the company where the 401K was accumulated, you can convert it to an IRA account and have much more choice.

If you are still with the employer your choices are limited.

If I were you I would take at least 50% out of the stock funds and keep it on the sidelines.

Now keep in mind that Gold rises because of the falling confidence in the dollar as a vehicle for storing ones wealth. Ones wealth could be stored in stocks also. Investing in foreign stocks is an added bonus because when the dollar falls you make that much more.

It is quite likely much of your "gain" is simply from the dollar falling and not necessarily from the actual foreign stocks rising, although it would really depend, you would need to read up on that.

Odds are the dollar is not going to have any major rallies.

Keep your money in the 401K, pull some out of stocks before Christmas (the FED will do anything and everything to keep people in the spending mood for Christmas so they will pull out all the stops to keep markets at least stable up till Christmas).

Again, if you can't invest in Gold, the next best thing is any commodity so check for funds in your 401K that may invest in oil or lumber, anything like that.

Long term the value of the dollar will be less and less. Less compared to foreign currencies and less compared to what it use to buy.

When the market does correct (I think right after Christmas it will tank, but before the new year.....MY OPINION ONLY) don't make the mistake and stay out too long.

You think that's bad, my employer has nothing specifically Emerging Markets, Asia Pacific or Europe. We have a Fidelity Diversified Intl. fund and that's it for overseas.

My two years performance is -10%. Eventhough the gain has been great this year. I lost a lot from Fall 09 to Winter 10.

I can't check the gain for the last 5 years but 2006 and 2007 were really good years.

Extremely Bad Advice

Decisions like this will make you poor.

The 40-50% loss to taxes is guaranteed when liquidating a 401k (assuming you simply pull it out).

If you think you need to be out of dollar-denominated assets here is a better alternative:

1. Put your funds into the cash equivalent or short-term bond or stable value option in the 401k

2. Take a loan out for up to 50% of the 401k balance.

3. Put the loan proceeds into the whatever genius position you would have put the liquidated 401k proceeeds.

This approach avoids the immediate tax hit and allows you to demonstrate that perhaps you are not a genius gold or foreign currency speculator without taking a huge tax hit. If the return you get on the funds invested outside were a good idea they would greatly exceed the loan interest.

Sell, Mortimer, Sell!!

Equities are a bubble in a room full of pins....

Sobmaz and FSD are smart.

I know of someone who converted lifetime 401k to *physical* gold, bought a safe, put gold in safe, and was robbed within just a few weeks.

Awesome.

I believe the precipitating factor for this person's behavior was fear he developed by reading too many internet blogs talking about "Peak Oil".

Remember that? Seems quaint now... Just like all the talk here of depressions, collapse, civil disturbances, etc will seem quaint in 2011. Arraya and partypup will still have electricity and wifi, piggington will still be up (right Rich?) and they'll still be posting here just fine in 2011. Likely their incomes will be higher too. Just my prediction.

In the meantime I would advise, don't put all your eggs in one basket, and don't keep the basket at your house.

dude was robbed in that timeframe? Very likely he was telling someone he had gold in the house.

dude was robbed in that timeframe? Very likely he was telling someone he had gold in the house.

Land is hard to steal or lose and you can make a living from it.

But what about when 2012 hits ? !!!!!

My guess is someone from the store that sold him the safe. I've heard so many stories where you install some fancy car stereo in your car at a local shop and than you get it stolen in a few days, usually by the kids/dudes that installed it.

They know where you live AND that you have an expensive sound system in the car.

Yeah the assumption is that *someone* knew. Either a "friend" or the safe people. Yikes.

jimmyle wrote:
No, my Fidelity 401K sucks. No option for precious metals. I just pushed 25% of my money into US Bond Index. The rest are equally divided into Emerging Markets, Asia Pacific, and Europe. Nothing in US stocks now.

FSAGX is fidelity's metals mix. it has gold and other metals in it.Not the metal itself but the miners etc. It has done very well this last 8 months.Give it a try. I wouldn't worry about when to get out, I believe it is better to decide on a stop loss percentage like 7-8% and disipline yourself to stick to it, and go into a money market fund like FRTXX if all hell breaks loose. If your in Fidelity's 401k plans watch out for the short trade limits, some have to be held for 90 days. Good luck