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Silver Wheaton Corp. Message Board

  • duhfuture duhfuture May 8, 2010 12:27 PM Flag

    OT. question Re: 401K allocation

    My 401K offers stock, bond, and comercial realestate funds. So if as a long time gold/silver bug my gut tells me(dollar crash,hyperinflation, etc) to invest in tangible assets so it seems my only option is to go heavy into the Real estate fund. So is my thinking flawed or does anyone have another idea?

    I'm posting my question on this board as it is one of the few where most contributers seem to really get what is happening in the economic enviorment we find ourselves.

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    • Picked me up some physical last week too - timing was perfect (for a change).

      Sounds like you have a good hiding place...lets play a game based on a famous merchant explorer:

      Marco...

    • if you have a spouse who has an IRA which allows gold contributions, put that percentage of gold/silver you would like to put into your 401k into that IRA. It will overload your spouses IRA with gold but if everything is shared in the end anyways there is no big deal.

    • tulsadevlin@sbcglobal.net tulsadevlin May 9, 2010 7:55 PM Flag

      Hi DUH,I own several REITS in my ROTH Acct.
      Do your own DD.Some CRES are doing well, and pay a good divy.(I'm not talking about housing.)
      I like PM's and diversification as well.
      As YDM said, they can get hammered along the market.Beware, be careful.
      GL
      TULSA

    • Hi Duh,

      I read the rest of the replies and didn't see the answer you need, so here might be some of it, dpeending on your plan.

      1. You likely can NOT roll your 401k over into an IRA unless you quit your job and your 401k vests to you over some specific period of time (for instance, if you are a federal employee, and I think you are not based on your stated choices, then you have to wait 1 year after you quit to get your hands on your 401k).
      2. If my #1 is correct, and I think it is, then you might do what I just did this January:

      3. Borrow the max ($50k) from your 401k for the max term (5 yrs) and pay it back at ~3% interest to your own 401k out of your paycheck, then take the $50k and watch the market closely for a hard dip in PM, then buy 3-4 issues and physical with it and hold it all thru your 401k payback period, minimum.

      I don't know how big your 401k is, but if you have a significant amount left after borrowing $50k, then I'd put it in:
      a. 100% cash (they surely have a 'fixed' or cash option, most do)
      If no cash option, then I'd do something like 60% stocks, 30% bonds, and 30% RE, knowing that all 3 options are sh*t....but we don't know at this point which one is the worst sh*t.

      After that, put your head between your knees and kiss your *ss goodbye!

      The only part of this plan that'll likely make you (and me with mine) wealth over time is the borrowed part...andit ought to shine nicely to make up for the rest of the sh*t.

      GL

      CF

      • 1 Reply to clubfoolish
      • Club....

        Nice to see that someone understands how things work in the investment field. You are correct in that, most likely, he cannot roll over his 401(k) unless, as you said, he quits his job or has already left his job. If you still work at that company, you can't roll it over to an IRA. SOME companies, like my spouses company, does allow her to roll over a portion of her 401(k) into a self-directed 401(k) though. If his company allows that, it would allow him to buy almost anything like SLW.

        good luck

    • All I can do is add ditto to all those who say "Stay away from real estate!".
      Home owner foreclosure is round one, round two belongs to the commercial sector. If you want any data to confirm this train of thought just research 'KIM'
      one of the largest commercial real estate conglomerates.

    • does the bond fund include TIPS? then go with that.

      Real estate also does ok in a hyperinflationary scenario. That would be your best bet in the funds you mentioned.

    • You might consider the Canadian repository CEF.

      They seem to be reputable, around quite a while, and they actually have the metal that they say they have (what a novel concept!) Their price follows the spot price of gold and silver.

      If you hold it in a regular street account, there are difficulties with end of year tax reporting, etc. because it is a non-US company that has physical metal with depreciation/appreciation reporting etc.

      But if it is in an IRA, my understanding is that it doesn't matter, no reporting needed.

      This issue (how to safely park assets) is very important! Mutual funds no longer need to guarantee the buck, and they can suspend redemption whenever they want to (which would be exactly the time you would want to redeem.)

      The only mutual fund that is "safe" right now is one that is 100% invested in short term Treasury Bills. Try and find one. The fund providers have all moved away from this in a search for yield.

      So if you have idle funds in a street or IRA account, and they are deposited in a sweep account, you get whatever mutual fund they pick to hold the assets. I just got notice from Schwab that they had dropped the treasuries mutual fund I had used for many years as my sweep accounts.

      We are going to have a bout of deflation that will last at least a year. Then we will have hyper-inflation. Real estate will continue to devalue for the next year. The banks are accelerating the default process by an order of magnitude. The only question is whether we are going to see PMs follow the deflation/inflation cycle, or whether gold will be the ONLY thing that holds its value in deflation, and inflates along with inflation.

      Elliott Wave thinks gold will go down to 780/oz before it finally shoots up. Based on what we have seen lately, the fear-factor will keep gold steady no matter how much deflation we have. So I think CEF would be a good choice right now. And anytime you want, if it looks like gold and silver is headed for the basement, you can close the position in 5 minutes and pick something else

    • Real estate has become just like the market, a stock picker's choice, not a market of stocks.

      Key areas are due a rebound, like Long Island, or N Virgina, or even LA. But outside the main rebounders, I wouldn't touch real estate.

      Oh, one other area. Lower Alabama. They never got the pop, so they didn't get the drop. It's 1965 down there.

    • In my opinion absolutely not. Real estate continues to go lower and was the last bubble. It is still way overvalued as banks are holding back foreclosed inventory to falsely prop up this market as well as all the government incentives to falsely prop up the market.
      I understand you want to invest in something real, but based on the events and if you are a precious metals person real estate is not the place to be.
      I would question if your 401K isn't offering any good or safe investments whether you should invest in it.
      I continue to invest in mine because of the match, but I just put it in a money market and may withdraw the money to put in a sound investment later - even with the 10% penalty it would work out for me.
      Also, inflation tends to hit the market as it has this past year, so other stocks, even an index would work, although I doubt it will keep up with inflation as a whole, but it should go up.
      Just a personal opinion, but investing in Real Estate sounds like one of the worst investments right now. I'd equate it to investing in a dotcom stock.

 
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