if you had a small 401k(20k or so) you hadn't thought about in a while, invested in a mix of mutual funds, what would you do with it? Im pretty sure the stock market is going to get hammered again...
I'd liquidate it and wait for this bear market rally to begin pulling back, and when it does, short the $#@! out of the financials.
wait, whats to short later when you already liquidated today?Originally Posted by DFF
Convert his 401K to cash, eat the penalty, open an online brokerage account w/margin, (assuming he doesn't alreadly have one) wait, and short the financials.
Or, just roll over 401K to an IRA, don't incur penalty and tax bill, and then short whatever you want.
what's the difference between a 401k and an online brokerage account? don't they invest the same ways in same places?
ohhh, you mean short the financials today, not later.
No. I'm not suggesting shorting them yet. Not until it becomes abudantly clear they're in the process of tanking again.
isn't it just a matter of when?
and when it becomes clear, wouldn't it be a little late?
Yeah, they're going back down. And you can take that to the bank. As far as timing to generate maximum profit, and minimize risk, the key word is "process". Shorting them now (well, at least most of them) is too risky given their recent upswing. But once they start to fall, based off bad earnings and technical analysis, or some headline out of the blue, short, short, short.
See if you can get assets denominated in AUD, NZD, SGD, HKD, and EUR.
A margin account is required to short stocks. You can't get a margin account in an IRA.
What about commodity ETNs?
If that's the case, just roll over to an IRA and liquidate to cash. You're going to have to hit home run after home run on margin to overcome the 10% penalty plus income taxes.
He wouldn't even need margin with an inverse ETF like FAZ (which on the by and by is at an alltime low since the funds inception). Once the correction begins, and the market begins retesting the previous low, searching for a true bottom, FAZ will skyrocket, along with all other inverse ETFs.You're going to have to hit home run after home run on margin to overcome the 10% penalty plus income taxes
Depends on your 401(k) options. If they are lame, roll over to a Roth IRA where you have more options.
For the next 6 months, get out of S&P 500, DOW, etc. Dollar cost average into CEF and GDX...
Hey all,
I'm relatively new here and completely naive when it comes to investing. I recently became employed (1 week ago) with a company who offers 401k. Can anyone point me to online resources where I can gain some background and knowledge on 401k. Any direct advise would be appreciated as well (i.e. should I just take the money out and invest in PM, etc.) Thanks for any and all advise.
You can't margin or short in an IRA.
Whatever you do, don't invest in American mutual funds.
most 401ks have an option for money market accouts (which they advertise as low risk/low return). many also have an option for investment in an overseas fund.
if you think the US stock market is crap, i'd either move or allocate funds to the money market option or if you think Schiff is correct that overseas funds will do well relative to US equities, allocate a larger portion to these funds.
The best thing you can do, within the 401k platform:
First, get rid of all your fixed income/debt holdings. We're already experiencing the return of inflation to the markets, which historically does very terrible things to owners of debt. Also, risk is back in vogue with investors, people are shedding corporate debt for better returns in other investments. That means lower bond prices and higher yields. So unless you want to wait years to get your money back, and still lose money to inflation, dump it.
Next, start investing in emerging market mutual funds or ETFs. You have a very distinct advantage here because these funds invest in other firms in other currencies. If the USD continues to tank, which it should as we're in the midst of a multi-year cycle, your returns when brought back to USD are going to be leveraged by the power of currency fluctuations. That's a good thing.
The US stock market may or may not get hammered again. Stocks usually do a very good job of tracking true inflation - that is inflation of the money supply. But we're obviously entering a terrible economic climate. Employment is the name of the game, last month's numbers were an improvement but only because of 140,000 temporary census jobs.
Your best bet is simply taking your wealth overseas. You can't protect it here. I'd recommend the eurozone first, simply because it's central bank has been the least active in expanding the money supply.
I would also look for Australian investments simply due to the fact they have a very commodity based economy. Wool, precious metals and kangaroos :P
Stocks only track inflation when inflation is modest. If there is a run on the dollar, all dollar denominated assets would get killed.
I created a precious metals IRA at Goldstar Trust. I moved my 401K and IRA funds to this precious metals IRA account. Then I purchased silver that is being held by Goldstar. This was simple and safe. I have already made 5% this year.
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