How Should I diversify my 401k?

[Strike For The South]

Right now I'm mainly in stocks and bonds but I was looking to maybe get into the metals market as it seems there is no ceiling for gold

[drone]

I would stay away from gold, it's already pretty high. Look for things that are undervalued at the moment. Don't forget, your 401k is for the long run, if stocks are down now, it just means you are buying low.

[Fragony]

401k as in 401.000?

[Vuk]

Get it its own busing policy...

[Louis VI the Fat]

Right now I'm mainly in stocks and bonds but I was looking to maybe get into the metals market as it seems there is no ceiling for gold

Buy whatever metals sledgehammers are made off!

[gaelic cowboy]

Everyone is looking to buy gold apparently and the likes of bloomberg is running stories a lot lately on how silver is the new gold which is all a sure sign that those commodities are in bubble territory.

Now water there is a differ story but how you would invest your 401k in it I dunno failing that there is always magic beans.

[Peasant Phill]

So you're taking advice on investments from a few internet acquaintances you barely know.
If that's the case, you should totally invest in a time-share property somewhere in West-Flanders Belgium.

[Louis VI the Fat]

you should totally invest in a time-share property somewhere in West-Flanders Belgium.

The West-Flemings are at it again!


As coincidence would have it, I once visited the pitiful remains of http://en.wikipedia.org/wiki/Lernout_%26_Hauspie

[TosaInu]

What Peasant Phill says is true Strike For The South, but professional advise may not work either. In the end it's your own feeling, skill and 'luck'. It won't hurt to get some discussion about it.

Gold tripled in some six years, that's impressive. Some stuff has done better: phosphate. That did 10* within a very short time in 2008. For a special reason. People who got impetuous at 4*, bought a lot, got carried away by 'phosphate is a limited resource and will $$$' and forgot to sell again, lost a lot of money, because it more or less got back to the point where it was very quickly. A bit higher than before actually and it was expected to increase again, but that may not happen. Recently more resources have been found, and it's likely to last for 300 years instead of the 50. It might even be that recycling projects will lose momentum now (crisis afterwoes, delaying investment in the 'luxury').

I think we'll still see some rough water, but the chance that the gold price drops drastically 'soon' is likely. Whether soon is tomorrow or a year from now, I don't know. Buying 'cheap' stocks will be a smarter move and guarantees good nights sleep. Those may also go down a bit, and companies may default, but it's not a bubble that will burst any second. Don't put all eggs in one basket.

[Ice]

Since you are young, I'd say about 80% in S &P, 10% cash, and 10% conservative bonds. It's really a crap shot man... it depends how much risk and upside you want to expose yourself to.

This thread title makes me feel god damn old.

[TosaInu]

This thread title makes me feel god damn old.

It was that long ago you got 401k?

[Ice]

It was that long ago you got 401k?

When I joined this forum, Strike was talking about AP classes and getting his license. Now he is almost done with college and investing in a 401k.

[TosaInu]

Oh, that way.

[Lemur]

Strike, never buy something when you see the crowd howling for it. If everybody is convinced that goose feather futures are the path to eternal riches, that's when you either sell or completely avoid goose feathers.

Simple rule of investing: When people are screaming that the end is near and we're all going to be living in moldy barrels under a bridge any minute, buy. Conversely, when you hear that we're in a new economic paradigm where X* is going to go up and up and never come down 'cause the rules have changed, sell.




* X = Any commodity, stock or substance which has become popular for no good reason. See housing bonds, gold, ARs, junk bonds and tulips for further reference.

[gaelic cowboy]

Strike, never buy something when you see the crowd howling for it. If everybody is convinced that goose feather futures are the path to eternal riches, that's when you either sell or completely avoid goose feathers.

Simple rule of investing: When people are screaming that the end is near and we're all going to be living in moldy barrels under a bridge any minute, buy. Conversely, when you hear that we're in a new economic paradigm where X* is going to go up and up and never come down 'cause the rules have changed, sell.




* X = Any commodity, stock or substance which has become popular for no good reason. See housing bonds, gold, ARs, junk bonds and tulips for further reference.

If you hear on the likes of Bloomberg "It is different this time" then immediately go grab granpappys blunderbus from the attic and stock up on bean tins and if there telling you to sell then buy and hold your nerve.

The problem as I see it is for some reason Economists seem to think the economy is outside the laws of thermodynamics or summit.

[Fragony]

Strike, never buy something when you see the crowd howling for it. If everybody is convinced that goose feather futures are the path to eternal riches, that's when you either sell or completely avoid goose feathers.

Simple rule of investing: When people are screaming that the end is near and we're all going to be living in moldy barrels under a bridge any minute, buy. Conversely, when you hear that we're in a new economic paradigm where X* is going to go up and up and never come down 'cause the rules have changed, sell.




* X = Any commodity, stock or substance which has become popular for no good reason. See housing bonds, gold, ARs, junk bonds and tulips for further reference.

Worst financial advice ever. Tosa nailed it spread the risk.

[gaelic cowboy]

Worst financial advice ever. Tosa nailed it spread the risk.

Spreading the risk only works IF you know the value of the risk, that is why the world is in recession cos risk was spread across the system and no one knew the true value of it. The idea was that risk had being reduced so much it could now almost be ignored and we could just concentrate on value for money.

Unfortunately for those bankers any farmer could have told them price is an indicator of what someone is willing to pay, value however is far more hazy.

[Hosakawa Tito]

The Fed is printing even more money to satisfy Washington's runaway spending in the hopes of proping up our failing economy. The end result will be a rise in inflation and devaluation of the dollar. During periods of rapid inflation your money is literally worth more today than it will be tomorrow. So “spend” it. Whether that means buying a car now instead of next year or investing in the stock market depends on your personal situation. But sitting on cash will cost you in the long run.

Hosa's inflation hedge:

1. Buy TIPS, Treasury Inflation-Protected Securities. Unlike conventional Treasurys, these bonds see their value adjust with inflation to ensure you don’t get eaten up as the dollar fades.If you have any doubt whether or not TIPS work or how bullish Wall Street is on this vehicle, consider that in October the U.S. Treasury successfully executed its first-ever TIPS auction in which the bonds actually had negative yields. That’s because the specter of inflation is so likely that investors were willing to enter the investment in the red with the expectation of rising yield over the life of the investment that makes a short-term loss well worth it.

2. Buy gold. Even though it's had a significant run up in price this year on the expectation that inflation will rise, when it does gold could soar much higher. Don't be tempted by mining companies though. I'd recommend a reputable dealer or a gold ETF like GLD. Gold is a speculative asset. It looks attractive but is high risk at this price. If the economy stabilizes and high inflation doesn't materialize, gold could drop significantly. You're betting on a specific scenario for the US economy, double digit inflation.

3. Invest in crude oil ETF's like OIL. Crude oil is priced in U.S. dollars. As a result, when the dollar drops in value, it takes more dollars to buy the same amount of oil. That means oil prices rise in an inflationary environment, as do profits in the crude oil sector.

There are ETF's that bet against the dollar and you can also play exchange rates between the dollar and other currencies, but I'm not sophisticated enough in that stuff to even think about trying it.

[Megas Methuselah]

Maaaaaaaaaaaaaaaaaaaaaaaaan, I'm poor.

[Fragony]

Maaaaaaaaaaaaaaaaaaaaaaaaan, I'm poor.

I'm not by now, comfortably living from interests, but where the hell does a student get 400k from

[Ser Clegane]

I'm not by now, comfortably living from interests, but where the hell does a student get 400k from

401k

[Crazed Rabbit]

Worst financial advice ever. Tosa nailed it spread the risk.

The what now? That's similar to what Warren Buffet, world class investor, has been saying for decades:

I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.

CR

[ELITEofWARMANGINGERYBREADMEN88]

You can give it all to me.

[Fragony]

The what now? That's similar to what Warren Buffet, world class investor, has been saying for decades:


CR

It's easy to boast when succesful, but when a company is going down psychological gravity pulls it down further. You can take a risk surely, but never risk everything. Doubt he did.

Anyway there is a lot of art-deco being for sale grab what you can, in tough times art gets hit first and it has relative value no matter the currency, it's a sound investment that will treat you well if you don't want quik results, it's at it's natural comeback the real deal is going to be very valuable. I would be a bit cautious with investing dollars into dollars since the FED's latest stunt.