Bogleheads.org

donaldfair71 wrote:Well, he's kind of right in a round about way. Index funds are for people who know nothing about investing. Since very few people know how to invest, the whole market index fund is perfect.

But what a great lesson on getting in late, and market timing investments, etc.

Well put.

To deal with unexpected supply-side shocks, why gold as opposed to some sort of diversified commodities basket? One reason I chose gold instead of a diversified commodities basket, as part of a stock/bond/gold portfolio; is that holding physical gold, also diversifies my investments away from being...

I've learned over the past few weeks that there are two investment topics that people become very passionate about - gold and houses. Rick Ferri Can you understand why some of us might find this to be an ad hominem argument? I wonder if I would get away with a statement like that. In my opinion, a ...

If housing gets too expensive, people won't pony up more money, because they won't have it. They'll rent, which is what always happens with Real Estate. And the rents won't be enough to cover the costs of purchasing overpriced upscale housing, which is why the dream of getting rich flipping expensi...

I'm wondering whether the Permanent Portfolio would be more appropriate than an 80/20 stock/bond allocation. Incredibly, it seems to have done just as well as even a 100% stock portfolio over the past 30 years or so, despite the fact that it only holds 25% stocks... and yet it has done so with sign...

I live a bit north of Green Bay. I would be interested in a meeting. I don't know what all goes into organizing a meeting, but if Eric is no longer with us, I would consider organizing something. If we could gather at least as far north as Oshkosh, I could make it down to there.

If you believe in gold as a true financial asset as do central banks and many wealthy investors, then just take a position in gold, as I and many have done. Then rebalance. Forget about figuring out when gold is in a bubble or not, just as Bogleheads like me have given up on trying to time the marke...

Noobvestor,

Nicely put.

Hazlitt

People, This is basically where I am coming from. http://en.wikipedia.org/wiki/Quantitative_easing The only point I disagree with is where it is written, "According to the IMF and various other economists, quantitative easing undertaken since the global financial crisis has mitigated the advers...

The Federal Reserve, our central bank, increases the money supply when they buy treasuries from the US Treasury. The treasury gives the central bank IOUs, treasuries, in return for cash. Where did the central bank get that cash which it hands over to the treasury? Out of thin air. When the governme...

When I try to examine the fundamentals of gold, I prefer to look not at gold's "price inflation"-adjusted average price, but rather at gold's "monetary inflation" adjusted average price. By monetary inflation I mean the increase in the money supply, through, to start with, the o...

chaz wrote:

hazlitt777 wrote:It could be in a bubble. Stay diversified. Stocks, bonds and gold.

My gold is in DW's jewelry. Is that OK?

Not as cost effective, but better than nothing. Hope you are at least at 5% of your portfolio:>)

I don't think that this article has been posted yet. I found it interesting: Gold’s Declining Price Is a Reversion to the Mean http://economix.blogs.nytimes.com/2013/04/23/golds-declining-price-is-a-reversion-to-the-mean/ Or maybe it is just on sale for a little while? Personally, I needed to rebal...

Gold is already trading at near 3 times it's inflation-adjusted average price. At what price does it reflect these possible crisis scenarios? There must be a price limit on how high gold can go before this "protection" goes away. Rick Ferri When I try to examine the fundamentals of gold, ...

We are in a bubble. But one still needs to own bonds and cash. So stay diversified since one never knows when this bubble will burst.

It could be in a bubble. Stay diversified. Stocks, bonds and gold.

Nisiprius, I stand corrected. It was longer than a year or two. But that period wasn't as bad as it is often depicted. Here is a source for those interested: "Many historians describe the period after the crash of 1873 to 1896 as a deflationary dark age. M. John Lubetkin in his book Jay Cooke's...

Larry,

I appreciated this opportunity to debate these issues. I believe we have a consensus on most Boglehead principles. One the rest, well, this place probably isn't the format in which to get into all those details.

all the best,
Hazlitt

hazlitt The gold standard helped create more busts than anything else. And we were on the gold standard heading into the Great Depression and history shows that those that left the gold standard had the fastest recovery from the Depression There is simply no evidence to support a 2% real rise in pr...

Nisiprius, My history source on the issues you refer to is, The History of Money and Banking in the United States . It is actually a collection of essays covering the history of the US on these topics. Here is a link to the book: http://mises.org/books/historyofmoney.pdf Two things: One, the panics ...

hazlitt For thousands of years gold has had no real return, why would you expect it to be +2%? Larry Well, in the US from 1869-79, when we were on the gold standard and did not change the reserve ratio for the dollar, their was an annual average deflation of 3.8%. During that time, the economy was ...

Nice article Rick. Thanks for posting. I have a co-worker that completely cashed out his 401K and took all the penalties and taxes so he could buy gold with it. He told me that he thought the government would come after everyone's retirment $$ in the future and he wanted something physical and of v...

I tend to see gold as seeking an equilibrium with the new money supply and in a growing economy to provide a real return of 2-3%. I believe the money supply is growing significantly yet the effect of higher prices is not prominent because a lot of that money is not getting out of the banks. I don't ...

Gold is easy. There's a 5000 year history to look at. Gold pays no cash flow and does not grow. When the price spikes, either there will be hyperinflation or the price will fall back to its long-term average price. Not much else to talk about. Rick Ferri I don't think it is that easy. The average p...

Mr. Ferri, I wouldn't be so confident as of yet. Gold is still over twice the price you predicted several years ago to which it was suppose to fall. As far as the numbers you used, there are others that put inflation much higher, for example http://www.shadowstats.com There are large businesses tha...

Mr. Ferri, I wouldn't be so confident as of yet. Gold is still over twice the price you predicted several years ago to which it was suppose to fall. As far as the numbers you used, there are others that put inflation much higher, for example http://www.shadowstats.com There are large businesses that...

I've purchased from California Numismatic Investments here: http://www.golddealer.com/ If you visit their website they explain the process very clearly. In short, you pay approximately 4% over spot and buy back for 1% over spot one ounce American Eagles. I encourage you to only purchase one once pie...

Here an economist analyzes bitcoins and concludes it is not money. He seems to imply that it might be quite safe from the perspective of overproduction and thus devaluation. http://www.mises.org/daily/6411/The-Bitcoin-Money-Myth The author concludes, "Bitcoin is not money but rather a new way o...

Magellan and SSSS, I read the Forbes article about Bitcoin. It still leaves questions unanswered. Here is my main concern: Every investment has its strengths and weaknesses. I think all investments are vulnerable to fraud and theft in one way or another. In regards to stocks one can undergo for exam...

Here is what Jim Rickards has to say about bitcoins. http://goldsilver.com/video/jim-rickards-why-he-likes-gold-better-than-bitcoin-gold-is-money/ In other words, why eat hamburger when you can have steak! Hi hazlitt, And for at least a second time we agree! If one is going to buy something volatil...

What a crazy drop in the price in gold. I didn't think it would happen. It seems that around 500 tonnes of paper gold contracts were suddenly sold. Being fully diversified in stocks, bonds and gold, it wasn't as bad as i thought it would be once I recrunched the numbers, but I still was surprised. ...

It seems when stocks are down Bogleheads tend to post that they are now going to buy stocks. "Hurray! Stocks are on sale. I'm buying" They almost seem happy stocks are down. So now that the gold prices are down - why is there not a consensus that it's time to buy? I don't see a lot of pos...

So where is the GLD money going to go? Cash? Bonds? Stocks? Real Estate? Other commodities? 10:23 AM Central Gold 1,357.90 -143.50 -9.56% Seems like the dollar, as stocks seem to be topping off and falling a little. The question is, where will all this pan out to in the next three years? I opt to b...

What a crazy drop in the price in gold. I didn't think it would happen. It seems that around 500 tonnes of paper gold contracts were suddenly sold. Being fully diversified in stocks, bonds and gold, it wasn't as bad as i thought it would be once I recrunched the numbers, but I still was surprised. I...

Leesbro63 wrote:

hazlitt777 wrote:This market is not normal. Just rebalance. That is all we can do.

What is normal?

Interest rates around 4-6%, less than 44 million Americans on food stamps, a lot less than one and a half trillion more debt being added to the national debt....for starts.

The New York Times had a front page story about gold today http://www.nytimes.com/2013/04/11/business/gold-long-a-secure-investment-loses-its-luster.html?hp That private investor should have dollar cost averaged into it. And gold has done just fine after we went off the gold standard in 1971... aro...

When men like these are starting to try to tactically allocate bonds it should be a sign that something is not quite right in the market place. The best thing to do in my opinion is to be well diversified between all traditional financial assets...and to keep with the principle of simplicity I would...

Here is what Jim Rickards has to say about bitcoins.

http://goldsilver.com/video/jim-rickard ... -is-money/

In other words, why eat hamburger when you can have steak!

This market is not normal. Just rebalance. That is all we can do.

I never could see bitcoins as of any value as a store of value. Maybe, as a means of exchange but then I would keep my account very small and not let it get too big. Here is an article I came across on it not to long ago: http://www.theundergroundinvestor.com/2013/04/the-argument-of-bitcoins-v-gold-...

EternalOptimist wrote:Fear is an awful thing, what I get out of this is not to listen to negative reports unless it's from my doctor and then too I want a second opinion

Eternal optimism can be an awful thing too Got to hear both sides of the argument.

I enjoyed this interview...surprise surprise. But I thought it would be worth posting. Some here may find it thought provoking.

http://goldsilver.com/video/kyle-bass-i ... bloomberg/

This PP gold fan took a vacation from this site for Lent. Trying to spend time doing more important things. I haven't had to rebalance yet. Gold was up 7% last year as of December 31st, at $1675. This year as of today it is down (1602/1675) 4.4%. Frankly surprised, but short term anything can happen...

I was very happy to hear Mr. Bogle lament all the cheap money/low interest rates which fuels all the speculation. Very true.

I'm not so sure the stock markets will be so kind to us this coming decade but we shall see.

Thanks for the charts.

Watty and Sandman, That is some good advice and guidance you gave your children. It is such a delicate topic when you talk to somebody not your own...you don't want to discourage them from pursuing their dreams, yet, I worry when they might not be thinking practically enough. They don't get the weig...

hazlit777 In my first post in this thread I said I really have no idea as to what the floor price is for silver. After doing a little research I concluded that I still didn't know, but that I disagreed with the lowest estimates posted based on economic principals. A couple earlier posts implied tha...

Thanks for the responses and the link. Yesterday I sat down with a college grad...from a public university no less. I was saddened to learn how much this person borrowed for 4.5 years of college obtaining a B.A. in Social work. Just felt like getting some feedback with what some of you are doing or ...

Is the floor for silver a function of supply and demand? Note the following opinion of a retired geologist: Silver has now dropped below its total cost of production, which averages about $29. Back in 2007, producers could produce silver at about $22 (which was above the spot price of the time as w...

Do you own any silver? I have 4 one ounce silver pieces given to me as a Christmas present, and one 1964 half dollar given to me by a friend : ) I keep kicking around a pm allocation, but it's so high now. I read silver is more volatile than gold, so if looking for volatility, might go half silver ...