Page 2 of 3 FirstFirst 123 LastLast
Results 31 to 60 of 63

Thread: Is this a good spread for 401k, your thoughts

  1. #31
    Regarding bonds: What are peoples' thoughts about TIPS (Treasury Inflation-Protected Securities) vs. regular long-term bonds? (Seeing as most people here are expecting lots of inflation and a stock market crash in the not-too-distant future)



  2. Remove this section of ads by registering.
  3. #32
    Quote Originally Posted by ErinM View Post
    Regarding bonds: What are peoples' thoughts about TIPS (Treasury Inflation-Protected Securities) vs. regular long-term bonds? (Seeing as most people here are expecting lots of inflation and a stock market crash in the not-too-distant future)
    Would you buy fire insurance from a known arsonist?

    TIPS have never been tested in a true high-inflation period. They're untest. They're unknown. There's good reason to believe they won't come through.

    For inflation protection, get gold instead.



  4. Remove this section of ads by registering.
  5. #33
    Quote Originally Posted by helmuth_hubener View Post
    Would you buy fire insurance from a known arsonist?

    TIPS have never been tested in a true high-inflation period. They're untest. They're unknown. There's good reason to believe they won't come through.

    For inflation protection, get gold instead.
    That sounds safer to me. Gold , about $1262 , Silver about $20 1/3 , copper $3.30. Box of shotgun shell $8 .All bargains
    Last edited by oyarde; 12-10-2013 at 12:43 PM.

  6. #34
    Good point! I imagine you also feel the same about Roth IRAs?

  7. #35
    Quote Originally Posted by ErinM View Post
    Good point! I imagine you also feel the same about Roth IRAs?
    No, not really. Is it possible that the government will go back on its word on Roths? Yes. Is it possible it won't? Yes. It doesn't have such an overwhelming incentive to tax Roths. It does have an overwhelming incentive to fudge the CPI numbers for TIPS in a bad inflationary scenario.

    We are talking about a situation where government is double-taxing retirement accounts when they promised not to. Such a situation is not so very different than one where the government is seizing everyone's retirement accounts wholesale. Could that happen, too? Yes.

    In these kinds of crisis situations, what will protect you is your gold, assuming you have done your gold ownership in the right way. Also, there are a lot of ideas and ways of doing things in the Permanent Portfolio way of thinking that will tend to protect your other asset classes as much as possible. For instance, US Treasury bills and bonds are not likely to be seized, nor touched in any way, because as soon as the Federal government does that, they have killed the cash cow, they have no more credit lines, and immediately, overnight, they have very, very big problems. They just signed their death sentence. What's more, they can always just print more money, so seizing bonds and bills would just be crazy. But, in the extremely unlikely event that they choose to do this, the government then collapses or radically changes and in the meantime during all this chaos gold will more likely than not rocket upward more than enough to offset the total loss of your bonds and cash. Even though that's 50% of your portfolio, gold will go up far more than that -- 300%, 500%, or more. So even in the most crazy, chaotic situation you can imagine, with a Harry Browne Permanent Portfolio you would still be protected.

    All non-taxable accounts -- Roths, 401ks, etc. -- are vulnerable to the same kind of risk: the risk that the government will break its non-taxation promises. Taxable accounts are vulnerable to risks, too (for one thing, that taxes on them could keep going up, up, up). So, I don't see that Roths are special or unique in being at risk. Roths are not overwhelmingly more risky than 401ks. They are more risky in some ways. A wise investor should take that into account and consideration.

  8. #36
    Quote Originally Posted by ErinM View Post
    (Seeing as most people here are expecting lots of inflation and a stock market crash in the not-too-distant future)
    By the way, I hope that more and more people here are ceasing to expect such a thing, and instead embracing the truth: that they don't know. In my posts, I am certainly trying to advance the progress of such good attitudes. Hopefully, it is having some effect.

  9. #37
    Indeed. Some friends recommended that I read "The Black Swan", which was a good reminder of that! I'm becoming less gold-buggy as a result. Thanks for your posts!

  10. #38
    I'm glad someone has some enthusiasm that any investment will be good. Me... I'm trying to figure out how to get out of this hell hole.

  11. #39
    Quote Originally Posted by Dianne View Post
    I'm glad someone has some enthusiasm that any investment will be good. Me... I'm trying to figure out how to get out of this hell hole.
    Do you mean you are going to relocate to outside of the US? Or do you mean you are trying to get out of and recover from a bad investment loss or situation?

  12. #40



  13. Remove this section of ads by registering.
  14. #41

  15. #42
    Quote Originally Posted by Lord Xar View Post
    Hey Helmuth,

    Sorry I haven't responded. I was just taking in the knowledge. So far, I kept my allocations the same but probably looking to change it up a little.

    I have recently started putting monies, every month, towards some silver/gold.. about 5oz silver/2-3 grams of gold (in addition to putting into a 401k and some monies into a health savings account ~3k / year for that).

    I probably should put some monies towards real estate but I know NOTHING about that.. and real estate where I live is outrageous and can't afford it. I perhaps have thought about buying property in more affordable areas on the United States. But again, that is a real risk for me. No management company to oversee the property etc..

    My fear is losing much of my 401k, like I did previously, when it comes down crashing again.. so I don't know where to put my allocations as I move forward.
    But some good farmland in the Midwest.

  16. #43
    Quote Originally Posted by Bastiat's The Law View Post
    What do you guys think of a Roth IRA?
    It's going to be reneged on by the government. The government will take all your money that it can take, and anything subject to capital controls like IRA and 401k accounts is its prime target. Hence "MyRA" - the instrument into which retirement savings will be forced, after a deliberate takedown of the stock market.

  17. #44
    Quote Originally Posted by thoughtomator View Post
    It's going to be reneged on by the government. The government will take all your money that it can take, and anything subject to capital controls like IRA and 401k accounts is its prime target. Hence "MyRA" - the instrument into which retirement savings will be forced, after a deliberate takedown of the stock market.
    Are you certain? Are you prepared for the possibility that this does not happen? Or are you, in fact, completely unprepared for that possibility?

  18. #45
    I looked into the Spartan S&P 500 index fund. Looks good but has a minimum investment of $10,000. I can't do that. Is there something else you recommend?

  19. #46

  20. #47
    Uriah may have his 401k through a company other than Fidelity, and thus have a higher minimum.

    Uriah, who are you through? Do you have any funds with 500 in their names? Most of the big brokerages nowadays have good index funds.

  21. #48
    I do not have a 401k and one is not offered at my company. I must have found outdated info. I looked it up again and it is $2500 and only $500 for an IRA. I just opened a rothIRA with TD Ameritrade and would like to use the permanent portfolio strategy as proposed by Harry Browne. I read one of his books several years ago but never took the time to start investing. I have some silver but that's it.

    I don't have the capital to meet any high minimums. I could put in a few hundred every few months. My wife and I just purchased a house and we are expecting our first kid this fall so I keeping cash on hand for now.

    I guess my real question is, what order should I purchase assest from each class; stock, bond, gold, and cash and what should I look for specifically in each category?



  22. Remove this section of ads by registering.
  23. #49
    I suppose we could start a new thread about the Permanent Portfolio and discuss the various options within its categories.

  24. #50
    I'd recommend finding one of the target date retirement funds and just putting all your retirement savings in there. Open an account with vanguard and you can have htem automatically transfer money from your checking account to the IRA every month.

  25. #51
    Gold in a IRA has some special rules. For one, the place you have the gold IRA with must physically store the gold there for you. Some more info:
    http://www.irafinancialgroup.com/preciousmetals.php There are also some limits on the form of gold in the IRA.

  26. #52
    Quote Originally Posted by Uriah View Post
    I guess my real question is, what order should I purchase asset from each class; stock, bond, gold, and cash and what should I look for specifically in each category?
    That's great you've set up the TDAmeritrade account and are wanting to start investing! It should be pretty easy for you. ZippyJuan, as usual, has given information that while it might be technically accurate is not useful or what you're looking for at all, and makes the gold part seem much scarier and more complicated than it actually is. Of course, he doesn't believe in and would like to discourage you from gold ownership, so I suppose that goes along with his agenda.

    Here's some answers to your questions.

    What order should I purchase asset from each class?
    You should buy all the assets at once. There's no reason to buy one at a time, and it defeats the purpose and design of the Permanent Portfolio. Buy them all at the same time. The Permanent Portfolio is a package.

    What should I look for specifically in each category?
    You can set up a permanent portfolio very easily by just purchasing and maintaining 4 funds.

    First, Stocks. You have lots of good options for the stock portion. Here are some:

    S&P 500 Indexes
    Vanguard S&P 500 Index Mutual Fund (Ticker: VFINX)
    State Street S&P 500 SPDR Exchange Traded Fund (Ticker: SPY)
    iShares S&P 500 Exchange Traded Fund (Ticker: IVV)
    Fidelity Spartan 500 Index Mutual Fund (Ticker: FSMKX)
    Schwab S&P 500 Index Mutual Fund (Ticker: SWPPX)

    Total Stock Market (TSM) Indexes:
    Vanguard Total Stock Market Mutual Fund (Ticker: VTSMX)
    Vanguard Total Stock Market Exchange Traded Fund (Ticker: VTI)
    iShares Russell 3000 Index Exchange Traded Fund (Ticker: IWV)
    Fidelity Spartan Total Stock Market (Ticker: FSTMX)
    Schwab Total Stock Market (Ticker: SWTSX)

    I would go with one of the total stock market funds, and I would probably go with the one offering the lowest management fees through TDAmeritrade. Just log in to your Ameritrade account, look each one up, and make your decision. None of the above would be a bad choice.

    Second, Gold. Here's the main choices:

    iShares Gold ETF (Ticker: IAU)
    StreetTracks Gold ETF (Ticker: GLD)
    Sprott Physical Gold Trust (Ticker: PHYS)
    Central Gold Trust of Canada (Ticker: GTU)
    Physical Swiss Gold ETF (Ticker: SGOL)
    Perth Mint Gold (Ticker: PMGOLD, available on the Australian Stock Exchange only)
    Central Fund of Canada (Ticker: CEF)
    Canton Bank of Zürich ETF (Ticker: ZGLD)

    They all have their pluses and minuses. None of the funds are ideal. But, they are easy. For starting out, you can just buy either IAU or GLD and call it a day. This is very easy. It's just like buying a stock, or a mutual fund, except these are what's called "ETF"s. Later, you can upgrade your protection.

    Long-term bonds:

    Here, you have really only one good fund option. That is:

    iShares Barclays 20+ Yr Treasury Bond ETF (Ticker: TLT)

    Your second option is to buy long-term bonds directly, which is pretty easy. Then you own the bonds directly, with no fund middleman. The downside is you have to do it in $1,000 chunks.

    Cash:

    You could buy any of these tickers:

    SHY, VFISX SHV, SCHO, VUSXX, FDLXX, TUZ, FSBIX, CPFXX, BIL

    Or buy Treasury Bills directly, just as with the Long-term Bonds. Set up a "ladder" to do this, so you automatically buy a new bill each time one expires.

    Or it would probably be reasonably safe to just keep it in TDAmeritrade's own money market account (the default for any unassigned funds).

    ~~~

    So, in summary, you could set up a nice Permanent Portfolio by doing this, for instance:

    $1,000 in IWV (stocks)
    $1,000 in IAU (gold)
    $1,000 in TLT (bonds)
    $1,000 in SHY (cash)


    Or any number of combinations using the other choices I listed. Then, because I assume you'll be adding to this account each month, set up to be automatically depositing 1/4 into IWV and 1/4 into TLT, because both of these are commission-free with TDAmeritrade, I just looked it up in my account. The other half, put into SHY (also commission-free). Unfortunately, there's no commission-free gold fund, so each time you buy gold you have to pay TDAmeritrade their commission, unless that's overridden by another offer or special plan you are on (the homepage makes it look like right now you can trade free for the first 3 months, for instance). So, let's assume you're putting away $500 per month, let the cash portion build up for about 8 months until your allocation looks something like this:

    $2,214.32 in IWV (stocks)
    $1,000 in IAU (gold)
    $2,109.11 in TLT (bonds)
    $3,001.01 in SHY (cash)

    Then buy $1,500 of IAU to bring things into balance again. Just keep repeating that.

    As your investment account gets larger and larger, the gold and cash swings will become smaller and smaller, percentage-wise, and you'll fluctuate close to the 25% figures you want.

    Every once in a while, I'd say at least once a year, check and make sure that everything is around 25% -- at least 15% and no more than 35%. If not, either sell the thing that's over and buy the thing(s) that is/are under, or, since you are in the early accumulation phase, it would probably be even better to simply reallocate the monthly allotment to buy more or exclusively the asset class that's under-allocated, which will fix the problem in short order without having to sell anything.

    That's it! It should take only a day to set up (maybe a few days of waiting if you choose to purchase the bonds or T-bills directly), and then with just a couple hours a year you're set for life! This is a beautifully simple way to invest.
    Last edited by helmuth_hubener; 07-10-2014 at 01:18 PM.

  27. #53
    Quote Originally Posted by helmuth_hubener View Post
    Second, Gold. Here's the main choices:

    iShares Gold ETF (Ticker: IAU)
    StreetTracks Gold ETF (Ticker: GLD)
    Sprott Physical Gold Trust (Ticker: PHYS)
    Central Gold Trust of Canada (Ticker: GTU)
    Physical Swiss Gold ETF (Ticker: SGOL)
    Perth Mint Gold (Ticker: PMGOLD, available on the Australian Stock Exchange only)
    Central Fund of Canada (Ticker: CEF)
    Canton Bank of Zürich ETF (Ticker: ZGLD)

    They all have their pluses and minuses. None of the funds are ideal. But, they are easy.
    I prefer the Central Funds of Canada, highlighted above. I just trust them a bit more than I would GLD, IAU, SLV...

    GTU is just gold. CEF is both gold and silver.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  28. #54
    Long term bonds are very risky- if interest rates rise their value could fall considerably (unless the bonds are kept until they mature) since bond prices move inversely with interest rates (higher rates mean lower bond prices). With both inflation and interest rates so low, that means higher risk. If you do buy and hold (or use a fund which buys and holds) and inflation gets higher you start losing more money.

    First thing is to try to reduce debt if you have any. Second, build up a reserve fund with enough money to be able to pay all of your bills for up to a year and keep that in a safe place with easy access should you for some reason find yourself out of work or be unable to work for whatever reason. A savings account is not glamorous but you need to be able to get to that money and not have any risks of losing any of it. After that you can start looking to investments.

    Then look at ways to keep the costs of investing low. Taxes and fund or investment costs will reduce your returns. Index funds offer the lowest costs. The more a fund (or you) buy and sell stocks, the more costs- both in transaction costs and capital gain taxes.

    Just me personally, (others here will disagree) but I think the gold bubble has not yet completely deflated even though the price of gold is off by about 30% from its high.
    Last edited by Zippyjuan; 07-10-2014 at 02:13 PM.

  29. #55
    I think PMGOLD is probably the best for USA people. Further away is better. Canada is too close. But, I agree, Brian, that the Canada funds are probably better in a lot of ways than IAU and GLD. But IAU and GLD have the cost and simplicity advantage.

    Bottom line is that an ETF is not a great way to own gold anyway. The actual Permanent Portfolio way is to own physical gold bullion coins directly. At some point along the line, I would recommend "upgrading" to do it like that.

  30. #56
    Quote Originally Posted by helmuth_hubener View Post
    I think PMGOLD is probably the best for USA people. Further away is better. Canada is too close. But, I agree, Brian, that the Canada funds are probably better in a lot of ways than IAU and GLD. But IAU and GLD have the cost and simplicity advantage.

    Bottom line is that an ETF is not a great way to own gold anyway. The actual Permanent Portfolio way is to own physical gold bullion coins directly. At some point along the line, I would recommend "upgrading" to do it like that.
    Agree.

    I would also point out that CEF and GTU are priced at a discount right now, so you are actually getting your metal at below market prices. I don't recall how those others (like GLD, SLV) are priced. IIRC, you don't get full value from those, so you are in essence paying a premium on the price of the metal.

    GTU:
    http://www.gold-trust.com/asset_value.htm

    CEF:
    http://www.centralfund.com/Nav%20Form.htm
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.



  31. Remove this section of ads by registering.
  32. #57
    Quote Originally Posted by Zippyjuan View Post
    First thing is to try to reduce debt if you have any. Second, build up a reserve fund with enough money to be able to pay all of your bills for up to a year and keep that in a safe place with easy access should you for some reason find yourself out of work or be unable to work for whatever reason. A savings account is not glamorous but you need to be able to get to that money and not have any risks of losing any of it. After that you can start looking to investments.
    I actually agree with all of this. Cash is under-rated. I gave you all the advice you probably need to set up a Permanent Portfolio, Uriah, but I neglected to consider the question of whether you should. If you don't have at least a few months of living expenses saved up, you probably should not.

    Instead, first build up a reserve of savings in the most liquid way possible: cash. Then add the other three components once you have that breathing room of a few months of living expenses. You don't want to be so choose to the bleeding edge that you may have to pull the money back out of that Roth IRA and incur major penalties.

  33. #58
    Uriah, was any of this info helpful?

    Did you succeed in setting up a Permanent Portfolio?

  34. #59
    In thinking about it, in fact, I think that for most small investors, with, say, less than $25,000 total, it makes sense to keep all of the cash outside the IRA (or other tax-deferred lockbox). The cash that's in the IRA or 401k is locked up, and you can't get it out (without big penalties), which defeats a big purpose and advantage of the cash: liquidity! So, a simple "starter" PP would be:

    $6,250 in cash in a checking account

    The rest in an IRA set up split three ways:
    $6,250 in SPY or FSTMX (stocks)
    $6,250 in TLT (bonds)
    $6,250 in IAU (gold)

    Done!

  35. #60
    It's taken me forever to respond to this. :P


    @ helmuth_hubener
    I did find the information useful. It was just what I was looking for. Unfortunately, I have not started investing yet. I've built up a good stash of cash but I am not working and haven't for some time. Full time dad now which is great. One thing that I'm thinking of now that I'm revisiting this information and getting more serious about making my money work for me is ethical investing. There are some things I can't put my money behind profits be damned. I've been doing a little research and I can't find very good options. I've found some mutual funds but the expense ratio is too damn high. Any help on that front would be appreciated.

Page 2 of 3 FirstFirst 123 LastLast


Similar Threads

  1. Replies: 21
    Last Post: 01-25-2016, 06:13 PM
  2. Replies: 23
    Last Post: 01-10-2013, 12:02 AM
  3. 401K contributions - your thoughts
    By Lord Xar in forum Personal Prosperity
    Replies: 13
    Last Post: 11-10-2010, 04:26 PM
  4. Making Lemonade......good thoughts from a blogger
    By BLS in forum Grassroots Central
    Replies: 0
    Last Post: 01-05-2008, 05:52 PM
  5. A good laugh to keep those positive thoughts rolling on....
    By ndega360 in forum Grassroots Central
    Replies: 0
    Last Post: 01-03-2008, 06:29 PM

Select a tag for more discussion on that topic

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •