How Should I diversify my 401k?

[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.