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powayseller
ParticipantJohn, if you don’t mind telling us, which type of investment lost money?
ParticipantNo, you don’t need to take it out of your retirement account to put it into a CD. Under the IRA designation, you can buy any index fund, mutual fund, CD, or stock or bond. Our retirement money is in CDs. It’s an IRA invested in a CD.
If the bank/brokerage holding your IRA does not offer the product you want, you transfer your retirement money to another institution. Probably USAA offers IRAs, and IRA CDs. You just have to ask. If they don’t, you can set up and transfer to Vanguard or other brokerage. What I like about Vanguard is that I can buy stocks in my retirement account.
When my husband and I worked at companies which gave us only 5 retirement options, we would put our retirement funds into their company-designated firm’s money market account. Then we made quarterly transfers from the company firms accounts into Vanguard brokerage, and then could do online trades into index funds, mutual funds, stocks, whatever.
There is no tax fee when you transfer.
You don’t need to use Vanguard. There are many brokerage firms. They help you with filling out the transfer forms.
I wish I knew where I could make a better investment than a CD, but since I do not know, I am in the CD for now. I plan to buy gold, silver, commodities index fund, Asian index fund, bond futures, but while I am checking this all out, I am in the CD. I’m not decided yet in my direction. In the meantime, while I am learning and deciding, I wanted to get out of the stock market, because I think it will correct. This is my strategy, and I hope more people will share their thinking and strategy so we can all learn from each other.
ParticipantHere’s an answer to the investing question from my brother, a brainiac attorney with a masters in computer science, a law degree from one of the top law school and who worked on Wall Street before coming to SD. He also reads an hour or two every day, economics and politics.
He recommends diversifying in a porfolio of commodities and East Asian and European mutual funds. If the yen goes up, so wil the East Asian funds. If the euro goes up, so will the European mutual funds. When the dollar falls, all three will go up. This way, you are betting against the dollar on top of making good investments.
Warren Buffet is making his new investments outside the US. He bought an Israeli company. So people who believe the dollar will fall, invest in non-US companies.
My brother and I disagree on whether the anticipated reduced US consumption will effect Asian and European stocks. He says Asia doesn’t need us; they’re selling us goods in exchange for IOUs, worthless paper (Tnotes). Since they’re not converting our dollars to their currency, they are not getting paid anyway. So when the US consumer slows down on Chinese goods, the Chinese will selling those goods to themselves. This does make sense, but if they don’t need us, then why do they continue selling to us with these supposed worthless dollars?
A reason that stocks/equities globally can decline somewhat in the next 6 weeks has to do with the yen carry trade. some guess that the Japanese carry trade, which put $200 bil of liquidity into the system and is unwinding by end June 2006, was used to buy equities and bonds. As these positions are liquidated between 3/06 and 6/06, the equity and bond markets where the investments were made, will go down. You can read more at atimes.com. They wrote that “the end of quantitative easing will pull an enormous amount of liquidity from Asian and US stocks and bonds, prompting widespread asst price depreciation and yen revaluation”.
Have you talked with Chris J about trading bond futures? I just subscribed to his service. You make 1-2 trades per week. Get in, hold for several days, get out. He makes his living at this, and has done well. Check out his blog.
I would love to know some good ideas for investing. I have made many posts about this, but don’t get many responses. I’m glad you are bringing up this topic.
What have you found out from the other sites?
Participant1) NAR radio and TV ads – Raise sales by running a seller education campaign on realistic pricing. The most important thing for the economy, besides construction, is the sale of homes. (Home sales generate furniture sales, etc.) We’ve got to increase transactions, and not worry if house prices are dropping.
2) Government affordable housing programs
3) Loan product for the 30% of Americans who don’t qualify under current loose standards. Loans to the bankrupt, felons, minimum wage worker, etc.
ParticipantGood luck on what?
What asset classes do you mean? Precious metals?
ParticipantYup, chasing down the price…Sellers have got to be realistic or they chase down the market.
ParticipantI love that dart throwing contest, and it is the reason I switched to index funds back in the early 90’s. The WSJ had a weekly column where the chimpanzees beat the pros most of the time.
The thread about the future of housing prices was an entertaining debate. I don’t know for sure it will go down 50%, but I am sure enough of a big drop that I sold my house. Only time will tell if my move was good. More important, how I spend my earnings determines if my decision was good.
Docteur, thanks for your lovely post about your family, and your dreams for your son. In a mobile society, stories of permanence such as yours are inspiring. While I cannot give my kids the family house (since I have more than 1), and cannot afford it anyway, I find your story sweet. Unfortunately, many Americans are counting on the sale of their home to fund their retirement. If more people lived within their means, we would hear more stories like yours. I hope your son’s job keeps him in San Diego, so he can live close to his parents and the city he loves.
ParticipantWow – that’s a great rate, better than Vanguard’s offering, which is 5.25% for a 1 year CD.
I don’t qualify for USAA; it’s for military people only.
That is a very good rate, and I assume is FDIC insured.
ParticipantWe’re hiding in Vanguard’s Prime Money Market, but are moving next week to Vanguard’s CDs. There’s a wide selection.
ParticipantFear of inflation seems to be the near term factor driving down the markets. But as you said, emerging and international markets may fare better. It all depends on how closely tied the global economy is. How did your international funds do in the 2000 correction?
I’m following the advice of the economists and advisors I mentioned previously. I take responsibility for my own decisions if they are wrong.
ParticipantAnother analyst who recommends entering the stock market with caution at this time, is Joseph Elliott.
His website regularly updates the chart in his book Ahead of the Curve. Historically, back to 1966 bear markets start when year-over-year growth in consumer spending falls. Given the consistent history of rising Discount or Fed Funds rate (green line, inverted scale) leading bear markets, investors should approach the stock market cautiously at this time.
One of the most important concepts in the book is the leading indicator chart. Even Richard Duncan, in the Dollar Crisis, makes the mistake of thinking that rising employment leads the economy. Employment is the most lagging of the indicators. It all starts with wages, which drives consumer spending. Government spending is 1/3 of the economy, and it is the hope to pull us out of the recession. Our government is large enough to spend its way out of the recession, unless the derivatives market falls apart. Not even our government is a match for that.
qcomer, I figure with CDs paying 5% now, why risk losing money in the stock market, which historically pays 7-9%? In today’s economy, with a falling dollar and a recession ahead, I’ll go with the safe 5%.
ParticipantI subscribed to the Yamamoto Forecast. Irwin Yamamoto says the S&P500 is 40% overvalued, and the housing market will have a negative effect on the stock market, so put 100% in cash (money market). He has a good track record, so I forked over the $350 annual fee.
Zeal does extensive research, and upon suggestion from Rich and leung-lewis, went to their site. I decided to join,and the newsletter tells me the following about the major indexes:
Name P/E Overvalued
S&P500 20.8 49%
Dow30 16.5 18%
NAS100 34.4 146%I don’t know how much to trust the numbers put out by the big companies. Think Enron and Worldcom, and today’s options exposure. They can hide their pension obligations, etc.
I do know that 2/3 of GDP is due to consumer spending, and as consumer spending slows, the entire economy will feel the pinch. Who will not be affected? Perhaps our government is large and powerful enough to take on more debt and ramp up spending. Perhaps you have knowledge of certain sectors or companies which will prosper, and have a good valuation. I do not have this knowledge, so I am sitting out.
I made an exception and purchased a lead mining company recommended by Zeal. I am also going to start purchasing bond futures with Chris J’s service. I already signed up for his service.
I checked into companies which I thought would do well in a recession, but they all have PEs over 25.
I would like to take a gold position, and am waiting for all the factors to be lined up just right. I am taking my lead from Chris J, who has shown the importance of making sure that the COT report shows the commercials are long. Zeal also has advice on this, and while they are long term bullish on gold, suggested not buying during the parabolic uptrend.
The big question I have about international and large caps is: how will they do when the US consumer, which powers the economy, pulls back? Can China switch from export to internal consumption? I don’t have the answer yet.
I also would like to learn, and will consider any advice shared by others.
ParticipantThe soft landing forecast. Too bad they didn’t explain how they came up with these numbers. Data, please!
The forecast came from Fiserv Lending Solutions, a mortgage lender/provider, and Moodys.com.
The whole thing is ridiculous. With so much inventory, how can Phoenix do anything but keep dropping. This group will have lost their credibility before too long.
ParticipantIt’s natural for PM prices to rise and fall in their journey in this bull market. Whereas Jim Rogers says every day is a good day to buy PM, we can certainly improve our returns by exercising discipline and holding off when prices diverge sharply from the 200dma. We’ve been discussing the parabolic rise of gold in these forums, and some of us agreed we should wait to get in. I’ve never heard Rogers say we should wait to get in. Neither did Schiff.
Between reading Zeal and Chris J’s blog, this week’s correction was anticipated. I am awaiting a good time to make a purchase.
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