The GOLD scream room

[Libertarian666]

I don't understand the obsession with a few dollars per ounce. Maybe if I were buying 1000 ounces at a time, I would worry about that, but not for any reasonably-sized order.

I agree. Just buy it already! If you don't buy it, it'll go higher. If you do buy it, it'll go lower. It's a market-timing golden rule.

You forgot the other two rules, useful during the decumulation phase: if you sell it, it will go higher, and if you don't sell it, it will go lower.

[dualstow]

Gold Heading To $1,200 As Trump Tax Cuts Loom - Goldman Sachs

kitco link: http://www.kitco.com/news/2017-04-25/Go ... Sachs.html

[ochotona]

Goldman uses these fake news stories to manipulate the market.

[dualstow]

Oh, manipulate schmanipulate. Gold's gonna do what gold's gonna do.

[dualstow]

Exactly! Now stretch that information out into a newsletter.

[grapesofwrath]

I'm light on gold (~10%) and I get seduced by boglehead logic on the uselessness of the stuff but then i read some tweets and think history and other worlds and i struggle to refrain myself from getting some more... Its such torture.

[ochotona]

It is finished (my buying, that is).

[Cortopassi]

Ocho, I believe now that your buying is complete, next stop is $1200...

Damn those powers that be hating gold and such. They're never going to let it rise. At least it is only a portion of the PP!

And as usual, the silver portion is getting whacked even more. Down more than 10% in 2 weeks.

Starting to feel like last year's PP performance. Big early run up, then drip drip. But at least we ran until July. This is too soon!

[ochotona]

Ocho, I believe now that your buying is complete, next stop is $1200...

No doubt !!!

[mathjak107]

gold is more timing the market than time in the market

[stuper1]

Not if you are using it as Black Swan insurance.

[mathjak107]

well than remember you can't complain about the value dripping away once the black swan goes bye bye as typically happens over and over .

[dualstow]

It is finished (my buying, that is).

So that's what Jesus was talking about.

[stuper1]

Not if you are using it as Black Swan insurance.

well than remember you can't complain about the value dripping away once the black swan goes bye bye as typically happens over and over .

The last time I checked, any type of insurance is not free. But that doesn't mean that I don't have any insurance on my house, car, life, etc.

[mathjak107]

but we all pick and choose when and what to insure .

i own gold but i do take profits off the table every so often after a run up because of an event or swan and reduce holdings until a drop in price . if you wait for rebalancing time you will usually lose a good portion of what you gain each time .
unlike other assets like stocks and real estate which tend to respond well to time in the market , to get better performance out of gold it takes some timing of the markets . not totally in or out but i lighten up at times until i see a drop and then buy it back . wash and repeat .

but that is my style ,yours can be different . i just found if you get a nice pop in gold if i don't capitalize on it it rarely sticks around .

[Cortopassi]

Who needs insurance. The market never goes down....

[mathjak107]

over the long term it really hasn't . over any typical accumulation period you would have done just fine .

[Cortopassi]

If I had balls of steel, I agree completely, but every downturn I got scared out, so for me, the nice S&P rise over decades with the major bumps in the road in 2001 and 2008 didn't matter. It was the bumps that hurt badly.

Look at those magnitudes! Even the 1987 crash is merely a blip compared to the last two. If/when 2001/2008 repeats, the valley is going to be freaking huge and people will be jumping out windows. But there is so much control now, even from just 9 years ago, that it will be a sight to see when it happens and listen to the jawboning about how we have to save the economy and have to implement x and y and z measures to stabilize the all important stock market. I suspect there will be bail ins, the saving of too big to fail bansk for the good of the American people, nationalization of retirement accounts, etc. Dark vision, eh?

[mathjak107]

i was always a 100% equities investor right up until about 5 years from retiring . but i still run 40-50% equities all the time .

as i mentioned earlier there is no data that supports the fact gun shy folks even stick to more conservative models when they are down .

losing money always brings out bad investor behavior on all levels of volatility .

[Cortopassi]

The only data I need is my own, and although it has only been a bit over 3 years, I feel this is a portfolio I can stick with.

[stuper1]

mathjak107,

You've done well, and I'm happy for you, but do you ever consider that maybe you were a bit lucky in the sense that when the markets were down you didn't also lose your job and have to start relying on "retirement savings" to tide you over until you could find a new job. For some people nowadays, it has taken them years to find a new job, and even then, it may not pay as well as the old job.

I think this is one of the big reasons why many people want to stay away from a 100% equities portfolio during the accumulation phase.

[mathjak107]

lost my job in 2009 .
did you know that even a retiree who was 100% equities (which i don't recommend ) would have had a very very high success rate spending down from 100% equities in both good and bad times .

the reason being the drag from cash and bonds weights things down so much in the up markets so 100% equities develops a much larger cushion .

spending down when you have high level of equities even in a down market is much a do about nothing .

100% equities has a 93% success rate over every rolling 30 year period since 1871 . a 50/50 mix is optimal and was 98% . however going out longer 100% equities takes the prize . it has beaten 50/50 in 40 year retirement periods .

in any case unless you get whacked day 1 in retirement in a very long extended downturn spending from equities is a meaning less event . those who retired in 2008 are on par with every other average group this many years in .

that is what a safe withdrawal rate is based on . it counts on bad years and you spending down . cash buffers actually hurt you and cut income compared to just rebalancing a normal portfolio to create spending cash . if that portfolio is 100% equities and diversified in those equities it really is not a problem financially. mentally is a different issue !

drops are a temporary shorter term condition and mitigating those temporary drops permanently hurts long term gains so for a long term investor short term mitigation becomes meaningless , except perhaps once again , mentally .

[stuper1]

These are interesting thoughts that I have not heard before and find to be let's say non-intuitive. I'm more familiar with phrases like "if you suffer a 50% decline, you then need a 100% increase to break even".

Do you have any good references to point me to that discuss what you're saying?

Thanks.

[ochotona]

If you look at portfoliocharts.com you will see 100% stock for retirees only works for very rich retirees who can take the drawdowns.

[mathjak107]

wrong . the balance has no relationship to success rate .

drawing 4% inflation adjusted is mathematically the exact same success rate regardless of the amount . it is a percentage of draw based .

you can throw any balance you want in to firecalc and you will see it does not change . mathematically it can't .

what might determine what you do safely is the ratio of discretionary to non discretionary spending in your budget .

that is not wealth dependent either , it is just budget and expense related ..

if you ever needed to cut back because things were worse than the worst case scenario's planned around you may have to take a pay cut . if you planned a budget where everything is a need and not a want you can be in trouble .

in fact we have a very size-able portfolio and when we made our retirement plan we planned around staying in queens in nyc . i was able to do a budget that was almost 50% discretionary so if need be we can comfortably cut back if unexpected expenses hammer us .

on the other hand we could have taken the same budget and draw and lived in manhattan but that would have cut the ratio to a level i was not comfortable with and did not leave a good margin for cutting back .,. so in either case the lifestyle is based on the same budget but the flexibilty is what varies .

those with no discretionary spending should not be in equities at all for that matter regardless of wealth .