Friend says "Stock market will crash, invest in silver" - thoughts?

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SmilerUK
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Friend says "Stock market will crash, invest in silver" - thoughts?

Post by SmilerUK » Wed May 16, 2018 3:57 am

Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?

NS_Bane
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by NS_Bane » Wed May 16, 2018 4:42 am

Everyone who accurately predicted the last stock market crash and were able to properly execute trades to take advantage of it became multimillionaires. If your friend is not already fabulously wealthy, he is about to become so. I recommend you become closer to him.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Valuethinker » Wed May 16, 2018 4:45 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?
A short answer: no.

The stock market will crash, inevitably. But no one knows when it will come.

The largest one day fall in history was October 19, 1987. If you had sold out in January of that year, knowing that a crash was coming, and sat in cash, you would have been *worse* off than if fully invested the whole year, ridden the crash down.

That's an extreme example. But there's no available track record of anyone who has consistently beaten the market.

You have to have an asset allocation, set by your risk tolerance, and stick with it, thick and thin.

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JoMoney
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by JoMoney » Wed May 16, 2018 4:46 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
... Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future...
And yet people continue to listen to such predictions, as if there was some credible indicator that wasn't already being priced in to people's expectations.
Maybe it is secret information not (yet) widely known or proven, and if that is the case, what do you think people here are going to have to say about it?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

livesoft
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by livesoft » Wed May 16, 2018 4:56 am

What predictions did this person make in 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017? How many of their predictions were completely wrong?
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ignition
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by ignition » Wed May 16, 2018 4:58 am

No one can predict market crashes reliably. Don't listen to him. If he's right it will be pure luck.

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oldcomputerguy
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by oldcomputerguy » Wed May 16, 2018 5:10 am

How confident is your friend in his prognosticating skills? Is he selling all his assets and putting them into silver?
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

GratefulinNC
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by GratefulinNC » Wed May 16, 2018 5:28 am

Gold is better than silver. Gold has zero to negative correlation with stocks. Therefore, it is an excellent hedge, an excellent diversifier. However, one needs only a small stake in gold reap its benefits -- 5% to 10% of one's portfolio.

Gold should be considered as part of your "cash" position. It will have about the the same return as cash, but with much more volatility. The volatility is what you want. Gold will zig when your other assets zags.

When the sticks are steady or going up -- which is most of the time -- gold will just be sitting there. However, when times are uncertain and stocks are tanking, gold will remain steady or even rise. When gold rises, rebalance back to your set gold allocation.

Gold is not so much an investment as it is insurance. As long as you understand the function of gold in your portfolio, it is a good diversifier.

Many on Bogleheads will disagree with me. That is cool. They just have a different risk tolerance and/or philosophy. I like having just a smidge of gold as insurance.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by oldcomputerguy » Wed May 16, 2018 5:52 am

GratefulinNC wrote:
Wed May 16, 2018 5:28 am
Gold is better than silver. Gold has zero to negative correlation with stocks.
Just curious, how is gold that different from silver? They're both precious metals, neither produces any real return. Why is gold so much "better" than silver?
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by CurlyDave » Wed May 16, 2018 5:56 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am

...A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks...
Where does his expertise come from? What degrees does he have, from which universities?

I have a friend who, based on his personal experience, strongly believes that it is impossible to make money in the stock market. He has bought individual stocks based on "tips" from people who work at various companies and lost money every time.

I respect this man for his strength of character, his dedication to family, his community service and many other good attributes.

I do not follow his investing and financial advice.

One of the most amazing things I have noticed, is that DW and I are better off than most of the other people in our little rural community. Maybe this is because many years ago we adopted a "get rich slowly" plan. No one ever asks us for financial advice, but every time a "get rich quick" scheme comes along someone in our community gets pulled into it and ends up losing money. And it is always based on advice from someone who on a good day might have a few hundred bucks in his bank account and who thinks a "portfolio" is a fancy notebook.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by SimplicityNow » Wed May 16, 2018 6:15 am

Your friend may be right. It is just as likely your friend may be wrong. There are many "experts" out there who make similar predictions and most time they are wrong. The ones who are right tout their successes while conveniently forgetting their failures.

Ask yourself this: If anyone was able to accurately and consistently predict what was going to happen in the market wouldn't they just act on their own advice and become fabulously wealthy? The fact that most experts make their money by getting "other people" to act on their advice by selling newsletters, magazines or acting as financial advisors should tell you something.

I always enjoy this quote from John Bogle from his book, "Common Sense on Mutual Funds"

“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently.”

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Grt2bOutdoors » Wed May 16, 2018 6:15 am

So, your respected friend thinks the stock market is getting cornered by the issuing companies and he advises you buy silver? Look up the Hunt Brothers, they actually did corner the silver market until they were busted for fraud, then came the collapse, silver inflation adjusted or even nominal has come nowhere close to the price it was in 1978!!

Buy a coin or two, if you want to hold a shiny bauble or two in your hand, but don’t think for a second you are in the true sense of the word “investing”, you would be speculating on something you have zero knowledge about including your friend.

I happen to own a few US silver 1oz coins, here is a short history of the price range I’ve seen it go per ounce: $20-$58, over the last eight years, today it sits in the high teens per oz, in USD.
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livesoft
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by livesoft » Wed May 16, 2018 6:17 am

Find another respected friend who says, "Stock market will go up over time since it always does. Invest in stocks." Then decide which one to believe and prove it by putting your money where your belief is.
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GratefulinNC
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by GratefulinNC » Wed May 16, 2018 6:21 am

oldcomputerguy wrote:
Wed May 16, 2018 5:52 am
GratefulinNC wrote:
Wed May 16, 2018 5:28 am
Gold is better than silver. Gold has zero to negative correlation with stocks.
Just curious, how is gold that different from silver? They're both precious metals, neither produces any real return. Why is gold so much "better" than silver?
Silver also has the characteristics which I outlined. In gold, they are more pronounced, which is why I prefer it.

I have not purchased gold to have any investment return. That is not the point.

Gold is a hedge.

B. Wellington
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by B. Wellington » Wed May 16, 2018 6:23 am

OP, serious question...Why does your friend suggest silver?

Why not Real Estate? Gold? Treasuries? Money Market? What does he see that we do not?

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Grt2bOutdoors » Wed May 16, 2018 6:25 am

CurlyDave wrote:
Wed May 16, 2018 5:56 am
SmilerUK wrote:
Wed May 16, 2018 3:57 am

...A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks...
One of the most amazing things I have noticed, is that DW and I are better off than most of the other people in our little rural community. Maybe this is because many years ago we adopted a "get rich slowly" plan. No one ever asks us for financial advice, but every time a "get rich quick" scheme comes along someone in our community gets pulled into it.
Exactly right. I’m paraphrasing Dave Ramsey here because it’s spot on -“ in a survey of millionaires, most millionaires said the money was given to them said “no one”, the money was won at the racetrack, casino gambling or cashing in on a “hot tip” - said no one. The reason why people have an account with $100k or $1mm is because they shoveled money into their account and left it alone and let it grow and compound over their 40 year or 30 year working career. Very few people ever inherit that kind of money. If you want it, you need to make your money go to work for you, stop spending money recklessly and start investing.”

Buying silver is spending recklessly, don’t do it.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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DR
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by DR » Wed May 16, 2018 6:45 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?
That's classic: ". . . friend of mine is an expert in . . ." No offense, but it's like the beginning of an urban legend. These "experts" are everywhere. I just watched a YouTube of Peter Schiff, one of the biggest blowhards in the business, in 2012 telling people, in the shrillist of terms, to buy silver!!!!!! It was around $30 then. No doubt he's got plenty of expert explanation today as to why people that followed his advice have lost 50%. Peter Schiff knows a lot about macroeconomics. But most of what he knows is simply wrong. You'll find that there are many people out there like this. As Friedman said about the North Koreans last night on CNN, "this carpet has been sold before." Don't believe it. If you sell all your stocks and buy silver, you'll have a lot more to worry about.

book lover
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by book lover » Wed May 16, 2018 6:48 am

Forget market timing: Stay the course and follow your plan.

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arcticpineapplecorp.
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by arcticpineapplecorp. » Wed May 16, 2018 6:49 am

Which stock market? The London stock market :wink: ? I'm asking this because your moniker has the initials UK at the end and unless that stands for Ultra Kool, I'm assuming you (and possibly your friend) are in (or from) the UK? Remember not all markets move together. So while one market might "crash" another might not.

There's an old saying that goes "Economists have predicted 9 of the last 5 recessions" (Paul Samuelson). If you don't get that joke, keep reading it until you do.

If you haven't read Larry Swedroe's "Sure Thing's" predictiond results survey, I strongly encourage you to do so:

http://www.etf.com/sections/index-inves ... nopaging=1

You will learn that the track record of most who make predictions is abysmal.

Here's a good bloomberg article that says "Don't Try to Predict the Next Recession". Perhaps your expert friend in macroeconomics should read that instead of his forecasting report:

https://www.bloomberg.com/view/articles ... -recession

Warren Buffett once said:
'We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie [Munger] and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.' source: https://www.csmonitor.com/Business/2013 ... om-childre
This is why Jack Bogle has on occasion reminded us all that "Nobody knows Nuthin'".

Also read this to put market "tops" in perspective:

viewtopic.php?f=10&t=229429&start=50#p3567987

Go an ask your highly respected expert in macroeconomics friend what he thinks of what I've wrote above. I'm no highly respected expert in macroeconomics, but I have stayed at a Holiday Inn in my lifetime.

Never mind what your friend thinks, what do you think after reading these more reputable articles?
Last edited by arcticpineapplecorp. on Wed May 16, 2018 6:50 am, edited 1 time in total.
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by midareff » Wed May 16, 2018 6:50 am

NS_Bane wrote:
Wed May 16, 2018 4:42 am
Everyone who accurately predicted the last stock market crash and were able to properly execute trades to take advantage of it became multimillionaires. If your friend is not already fabulously wealthy, he is about to become so. I recommend you become closer to him.
The one who accurately predicted the last stock market crash and were able to properly execute trades to take advantage of it became multimillionaires, if not billionaires. They are now off on their own private island laughing at the rest of us. Did your friend give you this advice on his island? Was it nice? or is he still a working stiff like the rest of us?

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by z3r0c00l » Wed May 16, 2018 6:55 am

“Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

"Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge).

"Can you imagine an investor with $9.6 trillion selecting pile A over pile B?” -Buffet
Last edited by z3r0c00l on Wed May 16, 2018 7:27 am, edited 1 time in total.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by happyisland » Wed May 16, 2018 7:20 am

GratefulinNC wrote:
Wed May 16, 2018 5:28 am
When gold rises, rebalance back to your set gold allocation.
This is the part I don't understand. When it is time to rebalance do you get in your car and drive to a store to sell your gold?

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JPH
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by JPH » Wed May 16, 2018 7:27 am

Perhaps your friend has been bombarded by the same TV commercials that I constantly see. I have seen those for quite some time now and no crash yet.
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by guyesmith » Wed May 16, 2018 7:31 am

The only person who gets hurt on a roller coaster is the one who jumps off.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by BogleMelon » Wed May 16, 2018 7:32 am

What many investors don’t know is that most stock returns come in very short and unpredictable bursts. Which is why Charles Ellis offered this advice in his outstanding book, “Investment Policy”: “Investors would do well to learn from deer hunters and fishermen who know the importance of ‘being there’ and using patient persistence—so they are there when opportunity knocks.”
The evidence is very clear that professional mutual fund managers cannot predict the stock market. For example, in his famous book “A Random Walk down Wall Street,” Burton Malkiel cited a Goldman Sachs study that examined mutual funds’ cash holdings for the period 1970 through 1989.

In their efforts to time the market, fund managers raise cash holdings when they believe the market will decline and lower cash holdings when they become bullish. The study found that, over the period it examined, mutual fund managers miscalled all nine major turning points.

Legendary investor Peter Lynch offered yet another example. He pointed out that an investor who followed a passive investment strategy and stayed fully invested in the S&P 500 over the 40-year period beginning in 1954 would have achieved an 11.4% rate of return.

If that investor missed just the best 10 months (2% of them), his return fell 27%, to 8.3%. If the investor missed the best 20 months (or 4% of them), his return dropped 54%, to 6.1%. Finally, if the investor missed the best 40 months (or just 8% of them), his return declined 76%, all the way to 2.7%.
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http://www.etf.com/sections/index-inves ... nopaging=1
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Index Fan » Wed May 16, 2018 7:45 am

Q: When gold is down, what's the next asset pushed upon financially untutored investors?

A: Silver.


(Disclosure- I'm fine with holding a small amount of PM's for portfolio insurance)
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by nedsaid » Wed May 16, 2018 8:07 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?
There is the old saying that a broken clock is right twice a day. Your friend has probably been saying the same thing for years and years. He might be right someday.

Also keep in mind that the silver market is not without risks. Remember the Hunt brothers?
A fool and his money are good for business.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by SagaciousTraveler » Wed May 16, 2018 8:10 am

Index Fan wrote:
Wed May 16, 2018 7:45 am
Q: When gold is down, what's the next asset pushed upon financially untutored investors?

A: Silver.


(Disclosure- I'm fine with holding a small amount of PM's for portfolio insurance)

or Copper.

I buy a few Silver/Gold Coins a year, only because I enjoy collecting them. I've never sold them, even when prices have hit all time highs.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Marmot » Wed May 16, 2018 8:15 am

Your friend is probably right about companies being leveraged. What is hard to predict is when and what is the tipping point.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by SagaciousTraveler » Wed May 16, 2018 8:18 am

Marmot wrote:
Wed May 16, 2018 8:15 am
Your friend is probably right about companies being leveraged. What is hard to predict is when and what is the tipping point.
A result of companies taking on unnecessary debt to buy back shares. You can usually tell when a company beats estimates on the top line Earnings Per Share but misses on revenue.

With that said, I stay the course.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Valuethinker » Wed May 16, 2018 8:22 am

oldcomputerguy wrote:
Wed May 16, 2018 5:52 am
GratefulinNC wrote:
Wed May 16, 2018 5:28 am
Gold is better than silver. Gold has zero to negative correlation with stocks.
Just curious, how is gold that different from silver? They're both precious metals, neither produces any real return. Why is gold so much "better" than silver?
Gold is a much scarcer metal than silver and thus has much lower storage costs.

When rulers have tried to devalue the currency they have typically done it via silver coinage, not gold (one of Diocletian or Constantine's reforms ((?) was to abolish silver currency, it had become so degraded, and replace it with the gold solidus).

There's a lot more silver available e.g. in decorative uses, and so when the price of silver goes up, a much bigger supply of the metal comes into the market.

There is talk of this long term historic ratio of gold price to silver price (25 to 1?) but in fact it's been such an unstable ratio that I don't think there is much conviction (except among silver bugs) that it will return to that "equilibrium").

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by RadAudit » Wed May 16, 2018 8:29 am

“It's tough to make predictions, especially about the future.”

― Yogi Berra
The old Yankees' catcher was so right about so many things.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by 260chrisb » Wed May 16, 2018 8:37 am

I think somebody needs to change the channel when the "invest your 401K in gold" and "now is the best time to buy silver" ads run featuring old Hollywood stars promoting such. I hear this every year or so and about two years ago heard it from a friend who said he was buying and taking possession of physical silver and not investing in the market since we were going to see an enormous drop in the market in 2017 and 2018 after the election. Buy some silver if you want but your friend is,in my opinion, not offering sound advice. Buy some gold as well. Maybe 5% of your portfolio? Good luck.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by FoolMeOnce » Wed May 16, 2018 9:04 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

He said that come October or March next year, there are likely to be big crashes.
What about November through February? We'll be ok then?

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by DanMahowny » Wed May 16, 2018 9:29 am

oldcomputerguy wrote:
Wed May 16, 2018 5:52 am
Just curious, how is gold that different from silver? They're both precious metals, neither produces any real return. Why is gold so much "better" than silver?
Gold is a precious metal. Silver is an industrial metal.

Gold is not a "good investment", but is an excellent hedge against hyper-inflation. For some people, gold belongs in a portfolio. Although most people could probably avoid gold.

Personally, I don't see any benefit is buying silver.
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Longdog » Wed May 16, 2018 9:36 am

There is a presumption in that claim that people should continuously adjust their investments based on what is about to happen. That is fundamentally at odds with the Boglehead approach to investing. If, however, you accept that premise, the Boglehead approach is not for you.
Steve

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Clever_Username » Wed May 16, 2018 9:55 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?
If you would like, I can provide plenty of threads like this on the board from 2013, 2014, etc where someone who is touted as an expert said a crash is coming, and should one take defensive measures. One of those "experts" that caused plenty of people to post here (and I'm sure elsewhere) asking what to do about the imminent crash was an author of a popular series of fiction books. Another was a gynecologist from Texas. I'm not sure why people took those predictions seriously, but people did. And I'm sure they'll take the authors' next suggestions seriously too.

Lots of famous predictions happen. On a rare occasion, they're right.

The right defense to a crash is to have an appropriate asset allocation of stocks and bonds. If you haven't been through a crash, I generally advise age in bonds as a starting point -- and I advise not having an asset allocation with fewer bonds until you've seen how you react when a crash is happening (not when it is being imagined). The great bonus of this defense is it doesn't involve being right about when the crash happens and avoids being out of the market when the crash isn't happening.

I also worry that someone who is an expert in macroeconomics is advising you to buy shiny rocks, but that's not the big detail to focus on here.

By the way, most top Ph.D.s in economics can't predict what the stock market is going to do. If you want some reassurance that your friend, if right, isn't right by skill, ask what makes him an expert in macroeconomics. Ph.D. from a top school? Reads blogs written by doomsday preppers? Somewhere in between? I don't mean to insult your friend, I just want to point out lots of people touted as experts in this field make inaccurate predictions all the time -- don't treat them as a crystal clear view of the future.

One last thing: there was a famous stock broker... well, he became famous by going to all cash (sold millions of dollars in stocks) a week before the 2008 crash. He got tons of TV deals talking about how he knew the crash would happen, what he saw leading into it, and how to predict the next one. One prediction after another of his turned out to be wrong until it finally came out why he went to cash that day in 2008: he was going on a long vacation with his wife and she insisted he do so so that they could enjoy their vacation together without him perpetually checking his portfolio.

My advice: get a good asset allocation, set it, contribute regularly, and tune out the noise. It's good for the portfolio and the blood pressure.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Swampy » Wed May 16, 2018 9:58 am

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?
With friends like this, who needs enemies? :mrgreen:
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Sidney » Wed May 16, 2018 10:03 am

This theme ("stock market is about to crash, invest in silver") is a common one in television advertisements on one of the large cable news companies. These ads are no more credible than their news.
I always wanted to be a procrastinator.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by gotester2000 » Wed May 16, 2018 10:10 am

I think this forum is a bit obsessed with the idea that investment is stock index + bond index.
Any contrary idea suggesting physical assets such as property and gold as diversification and hedge is looked down upon - just like real estate forums where stock investment may be looked down - having all categories will balance you portfolio.

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greg24
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by greg24 » Wed May 16, 2018 10:15 am

Any respected macroeconomic expert should be advising you to put your life savings into bitcoin, not silver.

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David Jay
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by David Jay » Wed May 16, 2018 10:24 am

gotester2000 wrote:
Wed May 16, 2018 10:10 am
I think this forum is a bit obsessed with the idea that investment is stock index + bond index.
Any contrary idea suggesting physical assets such as property and gold as diversification and hedge is looked down upon ...
Actually, we are obsessed with having an Investment Policy and sticking to it. What is being suggested by the OP's "friend" is not holding commodities (although I happen to share Warren Buffett's view on commodities), it is market timing, pure and simple.
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by mrspock » Wed May 16, 2018 10:28 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?
The specificity (October or March) of your friends claim and investment advice (Silver) are big red flags for me.

Exactly what crystal ball do they have? What specific financial shocks or changes do they expect in October and March? Did they use their brilliance in 2000 & 2007 to make millions? If not, why? Why silver? Why not gold, treasuries or bonds?

Barring this friends name being Michael Burry (and even then give some hard thought), I’d politely listen but ultimately ignore the advice.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by ruralavalon » Wed May 16, 2018 10:29 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?
Please read this: "What if you only invested at market peaks?" The answer is: you would make a ton of money, in spite of investing at stock market peaks.

Trying to time the stock market is a fool's errand. No one can successfully do that consistently. Besides guessing when the stock market top has occurred, you have to guess again when the bottom has occurred in order to enter the stock market. Otherwise you miss the bargain prices at the market bottom, and miss the benefit of the recovery.

If you wait for a good day to buy, you will never know if the next day, or the next week, or the next month, or the next year might be an even better time to buy.

Sidney wrote:
Wed May 16, 2018 10:03 am
This theme ("stock market is about to crash, invest in silver") is a common one in television advertisements on one of the large cable news companies. These ads are no more credible than their news.
If the companies paying for the ads really thought that silver was a great investment, then they would be buying silver not selling it.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by avoidingdumbmistakes » Wed May 16, 2018 10:44 am

ruralavalon wrote:
Wed May 16, 2018 10:29 am
[
Please read this: "What if you only invested at market peaks?" The answer is: you would make a ton of money, in spite of investing at stock market peaks.

Trying to time the stock market is a fool's errand. No one can successfully do that consistently. Besides guessing when the stock market top has occurred, you have to guess again when the bottom has occurred in order to enter the stock market. Otherwise you miss the bargain prices at the market bottom, and miss the benefit of the recovery.

If you wait for a good day to buy, you will never know if the next day, or the next week, or the next month, or the next year might be an even better time to buy.
This is a great post. You can ALWAYS find someone calling for a crash nearly every day of every year. At the same time you can ALWAYS find someone calling for a great time to buy or a rally is imminent.

After being in the markets since 1988, the one thing I know for absolute certain is that rarely (if ever) will someone get a crash call right. I've also learned that time out of the market is time wasted towards reaching your goals.

In 09 I had the very unfortunate circumstance of having to pull investments out of the market due to my failing business. I don't regret it because I really didn't have a choice but had I not done it...I would be MUCH further along. I would probably be done working but there's not a thing I can do about it now.

I can sleep easier at night knowing I'm fully invested in any market condition versus having a pile of cash on the sidelines "waiting for the right time". That's more stressful than just letting it ride through thick and thin. At least to me anyways.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by mptfan » Wed May 16, 2018 10:45 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?
Yes, you should be worried that you are listening to the wrong people. I would lose respect for any friend who claimed to be an expert in macroeconomics and said something like that to me.

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parsi1
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by parsi1 » Wed May 16, 2018 10:56 am

Your friend might be right or he might be wrong.
Thats why you should buy one of these and keep it as an investment.
If he is right you have a gain, if he is wrong you have a nice set of coins.

https://catalog.usmint.gov/silver-proof ... ns#start=1

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Call_Me_Op » Wed May 16, 2018 10:57 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

Should I be worried?
Yes - about the fact that you think he can predict the future.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by ruralavalon » Wed May 16, 2018 10:58 am

avoidingdumbmistakes wrote:
Wed May 16, 2018 10:44 am
ruralavalon wrote:
Wed May 16, 2018 10:29 am
[
Please read this: "What if you only invested at market peaks?" The answer is: you would make a ton of money, in spite of investing at stock market peaks.

Trying to time the stock market is a fool's errand. No one can successfully do that consistently. Besides guessing when the stock market top has occurred, you have to guess again when the bottom has occurred in order to enter the stock market. Otherwise you miss the bargain prices at the market bottom, and miss the benefit of the recovery.

If you wait for a good day to buy, you will never know if the next day, or the next week, or the next month, or the next year might be an even better time to buy.
This is a great post. You can ALWAYS find someone calling for a crash nearly every day of every year. At the same time you can ALWAYS find someone calling for a great time to buy or a rally is imminent.

After being in the markets since 1988, the one thing I know for absolute certain is that rarely (if ever) will someone get a crash call right. I've also learned that time out of the market is time wasted towards reaching your goals.

In 09 I had the very unfortunate circumstance of having to pull investments out of the market due to my failing business. I don't regret it because I really didn't have a choice but had I not done it...I would be MUCH further along. I would probably be done working but there's not a thing I can do about it now.

I can sleep easier at night knowing I'm fully invested in any market condition versus having a pile of cash on the sidelines "waiting for the right time". That's more stressful than just letting it ride through thick and thin. At least to me anyways.
My policy was always to buy whenever I had spare money available to buy.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by snackdog » Wed May 16, 2018 11:11 am

Your friend is potentially in good company because as recently as the late 70s people have made fortunes off silver investments. The daring Hunt brothers of Texas managed to corner the silver market (no small feat) and made themselves an estimated $4 billion profit. A few million was later clawed back by some pesky regulators.

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