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Thread: When do you get out of PMs (partially) and into other hard assets?

  1. #1

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    Last edited by AZKing; 04-27-2011 at 01:38 AM.



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  3. #2
    Housing prices went up in 1980, but not as much as inflation. I will be selling my silver and turning it into stocks that should be very much deflated in value relative to gold/silver.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

    "If you want to make a lot of money, resist diversification." - Jim Rogers

  4. #3
    I should add that in 1980 houses weren't coming off a bubble like in the 2000s, so housing prices could and probably will continue to drop, especially if interest rates rise.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

    "If you want to make a lot of money, resist diversification." - Jim Rogers

  5. #4
    When average joes are jumping into gold/silver to protect themselves from inflation, that is when I will consider swapping into other hard assets.

  6. #5
    Quote Originally Posted by cubical View Post
    Housing prices went up in 1980, but not as much as inflation. I will be selling my silver and turning it into stocks that should be very much deflated in value relative to gold/silver.
    The only reason I'm interested in real estate is that the housing market still seems terribly overpriced and there's way too much supply... and the builders here are still expanding with spec homes that just aren't selling.

    If the market is still in a bubble, won't it go down even while silver is still going up? The same amount of silver should start buying more and more property. Just curious if that will be the case and if anyone has a prediction of when. If you can score some cheap houses for all cash, you can always rent it for lower than the rest of the people who still have mortgage payments :>
    The Golden rule: Those that own the gold make the rules.

    If We the People fail to independently audit Fort Knox, then how will we know the amount of Tungsten backing the FRN?

  7. #6
    Quote Originally Posted by AZKing View Post
    The only reason I'm interested in real estate is that the housing market still seems terribly overpriced and there's way too much supply... and the builders here are still expanding with spec homes that just aren't selling.

    If the market is still in a bubble, won't it go down even while silver is still going up? The same amount of silver should start buying more and more property. Just curious if that will be the case and if anyone has a prediction of when. If you can score some cheap houses for all cash, you can always rent it for lower than the rest of the people who still have mortgage payments :>
    People say real estate is a great investment because it is limited in supply; that is, eventually we will run out of land.

    The problem with that assumption, in my view, is that most cities still have plenty of room in the suburbs. Anytime a boost pushes the market price of a home over the replacement cost, you're going to have builders throwing up housing units like it's going out of style right outside city limits--it's just the way it works.

    If you can get in for less than replacement, then excellent! You're essentially buying a 30-year debt instrument at less than "par value," and leverage only further compounds the benefits. If you can't get in significantly less than replacement then you're screwed, to say the least. The only thing I fear with real estate is the long-term supply that is going to come down the pipeline as the "greatest generation" passes away. The greatest generation owns tons of real estate, and real estate isn't really worth all that much when you're dead. When you're paying an executor to file an estate, the last thing you want to do is keep paying them while the house is on the market and the estate is up in the air. That's an incentive to sell now, right now, and for less than market value, which later trickles into the market in "comps."

    Too much to consider. Mind boggled.

  8. #7
    The real estate bubble has already burst. The bubble popped when prices peaked and began to decline. Has it hit bottom yet may be a different question. What would be your intention for buying real estate? To rent it out and collect those payments? To buy it and live in it yourself? To buy it and resell it later at a hopefully profit?

    If it is to rent it out, you want to be certain that you can currently rent it out at a high enough rate to be able to pay the annual payments (mortgate, taxes, upkeep) for about nine months of rent payments (to allow for possible time between renters).

    If it is to buy and live in it yourself- for how long? A few years? Probably won't want to buy now. For ten years or more? Do it but be sure you can afford it. My goal is to have my place all paid off before I retire so that I don't have that as an expense at that time in my life.

    To buy now and sell later? A more difficult question. Again the how long before you sell it comes up. In the short term, (depends of course on your local market) prices are probably not going to be rising much and could possibly still go down further. Long term? Historically, prices of homes have not really gone up as fast as the general rate of inflation- the last decade was an aberation and not the norm. If you want to buy, live in it a while, and then resell- what will you do for housing at that time? Any replacement home will have risen in price by about the same as the one you have so you don't get to realize the price apreciation- unless you move to a smaller one or a lower priced community.

  9. #8
    I agree with buying real estate as it is something that will never go out of style, but I will be doing it through REITS, not actually going out and buying houses, though if you know what you are doing I am sure you can make a bundle.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

    "If you want to make a lot of money, resist diversification." - Jim Rogers



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