Panic on Silver or Gold in 2013? Collapse of the U.S. Dollar?

Day trading isn't something that anybody should attempt if they are serious investors. It isn't investing, it is playing. And the day traders now run up against the black boxes operated by GS and the likes, and no matter how fast you can think or hit the trade button, you will tend to lose. Even Jesse Livermore was against day trading.

Most mutual funds seem to be marketing vehicles and closet index funds. There are a few great fund managers around, but not many.

I agree that the individual investor's greatest edge is time. Most professionals can't afford several bad quarters in a row from holding shares of companies that will do spectacularly well over a longer time period.

 

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I'll admit I know very little when it comes to fancy Wall Street lingo and dropping names in the industry. But what I do know is that it doesn't take luck or skill or science to become a millionaire via smart investing these days. I'm not at liberty to say what I have made, but I will say quite a few of my fellow employees, who might I add work a blue collar job, have become millionaires simply by investing what they could when they could and staying the course- not throwing a tantrum when markets were down and vowing to write off stocks- not cashing out due to unsupported fears the world economies were doomed. We stayed the course and with our modest means have done very well. It's discipline not science that ends in results. It's just that most people would rather complain about their finances and blame others for their shortcomings, while at the same time living above their means and not saving. Thats the reason most people aren't millionaires, and it's nobody's fault but their own.
Guy

 

I agree with what you say very much. Be careful what you say, though, as there are not a few people whose livelihood and personal sense of ego depends upon making the world think investing is a complex endeavor.

 

I agree. It is no more complex than learning to play a musical instrument, shooting a gun [well], or passing high school geometry -- if you learn the right stuff.

 

I agree. Way too many professionals in the field like to use big words and make you feel they singularly are able to choose well. Actually, the saddest part with a financial education is realizing that many of not most things said regarding finance are half truths at best, outright lies at worst. I am responsible for our 401k at work, and literally rejected 75% of firms we interviewed because the reps did not know what they were talking about. Retail finance is scary to me, and you and Guy's advice to keep it simple and understandable is very good advice.

Btw Treehugger, I just saw your post count and was surprised. You are a much larger part of this forum than your post count would have me guess. Maybe its just you post quality posts, (or mine is just high from me BS'ing too much).

 

Good observation about Treehugger. He doesn't say a lot but what he says is quality. I wish I was as restrained
Guy

 

Back to the OP. The opinions, notions, personal acnedotes about stock market investing are mostly nonsense as they all assume that all is "well and dandy" with the US and for that matter the global finance system.

This week's action with JPM having yet again getting caught with its pants down with losing $2B, just like that, due to its participation in high risk exotic investments is proof enough that nothing, nothing, has been fixed with the US economy that destroyed it in late 2007 and which a year later forced the President to ask the taxpayers to bail out these institutions that caused it. Not one prosecution, not one federal criminal investigation, not one examination on the federal reserve's tactics. (beyond some hyperventilating by Ron Paul) The TBTF banks are free to behave as they please and if they mess up, the public inherits the losses. Meanwhile the media is focused on whether or not Obama and Romney like Gays & Lesbians.

What has happened, is that $7T in new debt has been created in various forms and either the federal government or the federal reserve has taken this on in a futile attempt to prop up the system that already collapsed. They will keep doing this until they can't do it anymore but when that time comes is anyone's guess. In a normally operating system this would be fairly easy to determine. But we have one where the existing laws and precedents don't apply so timing of anything is impossible.

 

The key here is 'well'. There is a difference being knowing how to do it and knowing how to do it well and right. I played guitar for years, even what I would consider rather well, but I didn't understand what I was doing until I found the grimoires.

I don't have the knack for day trading so I don't really do much there other than update positions based on events and situations. Charts and analysis are fun, but that's the story, not the the author.

I guess I would say that makes me a situational investor. I do think the topic of this thread will be relevant at some point in the future, which is one of the reasons I like precious metals, but I have no idea as to the timeframe.

 

Exactly. Lot to be said in keeping it simple and not allowing emotions to get involved.

 

KISS /= shoot and forget. There is no such thing as passive index investing as the two terms are contradictory. 100s of years of financial history have shown that most people end up losing out if they take this approach, and even Vanguard & Fidelity will tell you in every piece of literature they publish NOT TO DO THIS. The people who did this with NASDAQ are still hurting.

There is nothing simple about putting money into equities. One might choose to ignore their complications but that doesn't change this fact.

 

So putting money into an index is dangerous? In what way? As companies run into trouble they are replaced in the index.

I would simply like to know where Fidelity and Vanguard tell you, (except in a prospectus where they basically tell you everything is a bad idea to protect themselves legally), that index investing is dangerous. I don't see it any more dangerous than buying land, buying US Treasuries, or gold coins really. All of these, in proportion, are foundations of a balanced portfolio.

Will it maximize returns? Not necessarily, but I do not really see "danger".

 

The Nasdaq is an exchange, not an index fund. Investing is not complicated, but it is necessary to not be completely stupid and invest in companies with no perceptible value such as many of the tech stocks in the late 90s that sold for prices based on multiples of eyeballs. It takes only a small amount of education and dicipline to buy things like Exxon, Proctor & Gamble, Johnson & Johnson and similar companies during bad years for the market and just hold them. Anybody with enough intelligence and mental toughness to play poker or blackjack with a reasonable amount of skill should have no problem with stocks. And if they can't, there are many actively managed mutual funds with good long term records.

 

Dear Heart, have you not taken the time to read the Vanguard or Fidelity material and understand it in the way that anyone buying one of their funds should? Well, here is the part that you requested. (from Vanguard)

"...past performance, which is not a guarantee of future results..."​

This is printed on every prospectus they have. So to think that you can just dump money at a regular basis in an index fund, and then you will have a nice return when the day comes where you need to take this money out, is nothing but wishful thinking. Putting money in an index, without doing the research on what drives the index, is foolish at best and it has burned plenty of people who have taken this approach. It takes the same amount of work, if not more, than purchasing individual stocks. The S&P 500 went no where for 12 years and has produced mediocre returns over this period. Anyone taking the index approach over the average 30 year lifetime of work, lost more than a decade's worth of returns if they took the passive investing approach. If they are retiring now, then too bad for them. Even worse, the index is now propped up by central bank intervention. Anyone thinking this will last indefinitely is also setting themselves up for lots of disappointment. This is why there is no such thing as "shoot and forget about it" investing, as attractive as this might sound.

 

You are being obtuse. There are funds that are based on the nasdaq, but I didn't take the time to go and look them up and list them. Most people would figure this out. In your case, I would say that your recommendation about going to a managed fund is probably good advice.

 

If this is the case, then why are you participating on a gold & silver bullion forum? Anyone participating in this activity absolutely has to be very active in buying/selling/understanding/holding/etc or they completely don't understand the purpose behind it.

 

I give thanks every day for MPT. It is enormously beneficial to me for people to be trained in the idea that there is no use in thinking.

Regarding the four pillars, everyone should know:
1. All guns are loaded all the time
2. Never point the muzzle at something you aren't willing to destroy
3. Keep your finger off the trigger until the gun is pointed at the target
4. Be sure of your target and backstop

I don't know how anyone can invest without these important rules. It would be like..... oh, wait..... Never mind.

 

It would seem that Gold has to go up...eventually. Eventually, we won't have near 0% interest rates and our ability to pay at least part of our $15T to $16T debt will require us to print dollars. More dollars = lower value of the dollar = gold up (assuming things aren't so bad that we will be worried about stockpiling corn, wheat and rice).

What am I missing?

 

You know, we can't all be Herb Parsons.