Is it time to buy tangible assets?

[Paul G]

Is it time to buy tangible assets?

Stock market is tanking. The so called experts say the year is going to be flat, with high inflation in the near future. Foreign countries are devaluing the dollar. Federal debt is at an all time record that is unsustainable.

Auction week here in Scottsdale is over. Collector car prices are up across the board. Is that a sign that there is no more money to be made in stocks? Liquid assets like cash either? Are people with money moving in to other things that can retain value during high inflation periods?

What should small guys like us be doing right now?

[AKcharger]

Good question. I'd say home/land would be safe. Gold silver, while intuitively looks appealing it's dropped in price WHILE inflation and nat'l debt has gone up...So it's not a sure thing either 

[Mike DC]

The so called experts say the year is going to be flat, with high inflation in the near future. Foreign countries are devaluing the dollar. Federal debt is at an all time record that is unsustainable.

The inflation is driving the borrowing higher.  Borrowed dollars have been losing value for the last few decades just like earned dollars have. 

(Not to claim that this is sustainable - it isn't.)

 

[twodko]

I would think.....hope? Land/homes would still be a steadfast investment if they could be had for reasonable money and in a location conducive to a reasonably profitable turnover if needed. 

I've always thought having a cache of small value gold and silver coins are good to have on hand........not in a safety deposit box either. I say small coins for real world exchange for whatever goods etc my be required. Can't hurt to have backup......on several levels.
Certainly a much better idea before values went stoopid. 

[Ghoste]

How come all of the monetary experts aren't billionaires?

[Chad L. Magee]

How come all of the monetary experts aren't billionaires?

Usually because the monetary experts play it "safe" and not gain much at a time, rather than risk it all and potentially lose fast.  They tend to be diversified in their investments, so that if one thing starts to fall, not all of their eggs get squashed.  They are also in it for the big picture, not just a fast gain or two.  Granted, the billionaires sometimes have knowledge about things that everyone else does not have, so they can move faster on the money (and with larger amounts) than we can even dream of.  This information comes from a friend who does commodities and money market trading for some of the big boys....

Real estate investing can be problematic, as their are upkeeps that can cost you if you do not pay attention to them.  Location is a big deal and that can ruin your investment if you choose wrong.  Careful on this one, weigh the risks....

As for investing, precious metals are nice, but rare American coins are typically better choices than bullion.  The market is quite hot on them right now, especially early (1790-1850 era) coppers and gold.  *But, do not let my opinion sway you to fully invest in them, I am not an expert in finicial matters by any means.  It is better to see the raw data and determine the route to invest for yourself in mind.*...

In the end, our currency will lose value (buying power), just as any other currency has done over time.  The key is to be prepared for when it happens....

[chargerboy69]

I would think.....hope? Land/homes would still be a steadfast investment if they could be had for reasonable money and in a location conducive to a reasonably profitable turnover if needed. 

I've always thought having a cache of small value gold and silver coins are good to have on hand........not in a safety deposit box either. I say small coins for real world exchange for whatever goods etc my be required. Can't hurt to have backup......on several levels.
Certainly a much better idea before values went stoopid. 

I agree with Tom.

Even a small collection of gold and silver rings or bars. A Liberty safe at home would be a good investment.

Of course there is food, water, gun and ammo storage for the zombie apocalypse. . . . or stupid world leaders who run the worlds economy into the crapper. Seriously though, I am a firm believer in food storage. Especially after the winter we have had here and people run to the grocery store and the shelves are empty.  What happens if the government halts government handout programs, that would be fun.  

[twodko]

I've always tried to keep a sizable surplus of staple goods, water and other "items" to be as self sufficient as possible regardless of the need. I just thinks its a smart thing to do.

Mr. McGee offers some salient observations as well. My thoughts about small gold and silver coins, 1/20th and ¼ ounce, are that they can be used in times where basic raw exchanges for goods or services are the order of the day. In times of societal upheaval no one will give any credence to how rare a coin is. The intrinsic value of a precious metal coin will be what the metal is, its weight and the value put upon it during such times. Livestock, medical skills, metal/woodworking skills, farming/food storage skills et al used as bartering mediums, understood and commonly accepted forms of payment or exchange would become common currency.   (no pun intended )

[polywideblock]

be careful what you say someone will accuse you of being a "preper"   

[twodko]

 

[ws23rt]

The world is coming to an end this time for sure

Ok everyone pull back----peak out the window----now wait.

[68X426]

be careful what you say someone will accuse you of being a "preper"   

Tom is a pepper ? 

[Mike DC]

       

Prepping for an apocalyptic scary future is more fun than prepping for a poor, boring (and realistic) future.  

If things ever do get bad enough for prepping to pay off, it will come only after years of huge obvious warning signs.  People griping that milk costs a dollar too much is not a food shortage.

[68X426]

My reply is simple: fish hooks, tomato seeds and ammo. 

Along with friends who have skills and sound minds, my redneck neighborhood will survive.

[twodko]

O' course I'm a Pepper! Just not as Pepper as I once was.

[ITSA426]

I'm having trouble with the opening statement that "the stock market is tanking".  The few stocks that I own are doing very well and the overall numbers seem to be up.  So far as buying tangible assets, I buy things because I want them and if they appreciate in value that's fine.  Life's too short to worry about dying with the most of anything. 

[Paul G]

I'm having trouble with the opening statement that "the stock market is tanking".  The few stocks that I own are doing very well and the overall numbers seem to be up.  So far as buying tangible assets, I buy things because I want them and if they appreciate in value that's fine.  Life's too short to worry about dying with the most of anything. 

last week was a bad week for the stock market. Over a 300 point drop for the week. http://www.nbcnews.com/business/stocks-slide-again-one-day-after-triple-digit-dow-drop-2D11988419

Dow down another 189 points today.

You cant judge the market by just one week. But the winds of change are blowing. Read the articles. Sure, in any market you will have stocks that go up in a down market and vice versa. Overall, for those of us that have a retirement account to protect, and really any one who has money you have invested regardless of the type of investment, be it classic cars, real property, or cabbage patch dolls, is what this topic is about.

Maybe the answer to the question is to buy more Dodge Charger's.     

[twodko]

Agreed.

Just before the "tech bubble" burst I moved my entire 401k into cash because my portfolio was getting mauled. Best thing I have ever done. I haven't lost a dime since. I pulled the pin and retired from my primary career in 2004. Granted I earn less than $2.00 a month in interest but my nest egg is secure.......as much as that means these days. I don't sweat the market anymore. More importantly I'm comfortable and have zero debt beyond a small mortgage. The big plus is I own a Charger!!!!!!! 2nd gen of course.  

[chargerboy69]

I'm having trouble with the opening statement that "the stock market is tanking".  The few stocks that I own are doing very well and the overall numbers seem to be up.  So far as buying tangible assets, I buy things because I want them and if they appreciate in value that's fine.  Life's too short to worry about dying with the most of anything.  

last week was a bad week for the stock market. Over a 300 point drop for the week. http://www.nbcnews.com/business/stocks-slide-again-one-day-after-triple-digit-dow-drop-2D11988419

Dow down another 189 points today.

 

It is dropping because the Fed announced they are cutting back on the printing press.

The markets numbers are as fake as a porn stars titties.  The one and only reason the numbers are as high as they are is the Fed has been pumping trillions into it for years.  Sooner or later the spigot will need to be shut off. . . .  Thats when the fun begins.

[ITSA426]

Most of the investment stocks I have I've held for more than 15 years.  They have done well and can sink a long ways before they'll be worth less than I paid for them.  I'm not a particular fan of securities and bought them with the same attitude I use for lottery tickets.  It's money I can afford to lose.  I think the question is about buying tangible assets as investments.  Although I may have told my wife that my Chargers are investments, I didn't really buy them with the idea that they are part of my retirement plan.  I think muscle car values will drop off as the generation that grew up with them dies off.  Die cast car collections, guns, art, and most other collectibles may or may not appreciate in value.  Precious metals go up and down, and I know people who have lost their butts buying and selling gold. 

The only way I know to really find out what your assets are worth is to sell them and count up the cash.  That's how we measure the value of investments.  Like Tom, I think a better retirement plan is to live debt free and cash heavy.  Of course it's very hard to get a return on cash that keeps pace with inflation.

I'm not trying to rock the boat here, just getting in my two cents worth.

[Chad L. Magee]

Dr. Magee offers some salient observations as well. My thoughts about small gold and silver coins, 1/20th and ¼ ounce, are that they can be used in times where basic raw exchanges for goods or services are the order of the day. In times of societal upheaval no one will give any credence to how rare a coin is. The intrinsic value of a precious metal coin will be what the metal is, its weight and the value put upon it during such times. Livestock, medical skills, metal/woodworking skills, farming/food storage skills et al used as bartering mediums, understood and commonly accepted forms of payment or exchange would become common currency.   (no pun intended )

It is true what you said if the situation becomes very dire.  However, rare coins can give you an advantage if the situation does not get that bad overall.  The trick is to buy rare/valuable coins on the cheap.  One trick I learned as a coin collector is to look in dealer's silver junk boxes for deals at little or no premium over silver scrap value.  I still have a real 1916 D winged liberty "Mercury" dime in AG-G condition that I cherry picked out for the price of fifty cents back in the early 1990s, not to mention a couple of 1921s for the same price.  Check the current values to see what I mean.  The silver value for them is around $1.50 or so right now.  (I have them put away in a very secure bank, as well as hidden more in various locations out of state just in case something hits the fan on a large scale disaster.)  Rare coins can give a premium value over scrap, something that most bullion forms do not do.  The key is to be smart in your investing and learn exactly why/where/how to cherrypick the right ones on the cheap....

[ITSA426]

I agree Chad.  In stocks I think the principle is "buy low - sell high"  and I'm sure that goes with anything.  If buying something as an investment, like coins, the investor should be as educated as possible before wading in.  Other times it just takes dumb luck.  The stock market has so many variables that it seems a poor investment vehicle if security is important.  Cars, antiques and art would also be better investments if the buyer is informed, and aware that he might lose all or part of the investment.  I still prefer cash, but the problem is cash doesn't appreciate very well by itself.

[twodko]

All true.

[Indygenerallee]

Rare coins won't put food on the table when other folks have no money to buy the said rare coins.... buy AMMO!!! and make sure your rifles are clean!! 

[Paul G]

For me, mutual funds are the best bet. I have lost enough money in common stock to build me a big block, seriously. I dont play that game anymore. I moved the lions share of my 401K in to a fixed income fund 2 years ago. The market went up 30% since then, my K went up 3%, but I can sleep at night knowing it is safe.

Problem I foresee is inflation rearing it's ugly head. With all the money that has been printed in the last 3 years inflation is coming. No way around that fact. Money sitting in cash earning 3% will loose value, wont keep up with the coming inflation rates. What to do? 

Back in the 70's when inflation was in the double digits interest rates were high as well. CD's were paying double digits. Will it be the same way in the near future? 

[ITSA426]

If you knew all the answers Paul you could be a bazillionaire, and probably a decent financial/retirement planner.  We had some tax issues with mutual funds, not held in a qualified account, when they recovered after a serious downfall.  Still, not against them, but they aren't the safe haven a lot of planners make them out to be.  Bank CD rates are generally tied to other interest rates and are usually covered by FDIC protection.  It's nice to have some.  They are liquid.  US savings bonds are overlooked, I think, because there is no commission for selling them but they are as safe as anything else, and there is some inflation adjustment.  I bonds can be particularly useful. 

We've probably gotten way off topic but I think if you're going to buy tangible assets as an investment, you still need to think long term.  If you're thinking short term you probably just need to buy lottery tickets.  They have a lot more risk but the payoff could be great.

[Chad L. Magee]

Rare coins won't put food on the table when other folks have no money to buy the said rare coins.... buy AMMO!!! and make sure your rifles are clean!! 

Actually they would put food on the table, but you would likely get less for them than you want.  You would be trading them for their precious metal value at the least, which if all goes wrong, becomes higher in value at that point in time.  Still, the amount would probably be less than the nusmatic value at regular market times depending upon the type of coins.  Ammunition is not the answer to everything in times of hardship, even if you have the most powerful guns at the time.  Guns can be trumped at that game. ...

[twodko]

This was exactly my point with regards to having a stash of small weight precious metal modern coins. In times of barter only the actual weight of such coins will matter. Ammunition would be a form of currency as well. Same same with "community" skills.
I would submit gathering such things right now is a prudent thing we should all do. The "Boy Scout" theorem......always be prepared.

[ws23rt]

If you folks want something to really worry about its the latest chatter from the pres.

Our investments for the most part are in the countrys economic engine.  

The new thing is invest your IRA with the gov.---If you like your IRA you can keep your IRA.

If you invest in the gov plan you will never ---ever lose your retirement savings--

You see the idea?---The gov can spend and invest our retirement savings in a much better way then we have been doing. ( Kinda like Social Security)

And since they manage money so well we can kick back with that assurance.

Does this make anyone nervous?------After our IRAs all that is left are the pensions

The whole deal in a nut shell is we are possessions of the gov. and they will spend their possessions as they see fit until we are depleted or broke.

BTW we are broke now.

[ws23rt]

I have just a bit more to add.

For those of you that buy gold/ tangible assets/etc. Good for you for future planning but that planning is for the greater good because what you have that is of value belongs to the greater good---And it will be taken as needed---

[polywideblock]

don't forget a good stash of quality booze to swap/trade   if the sh*t hits the fan there wont be any distilleries/breweries  working , this stuff could be worth more than gold ( just about everybody has a use for booze ,fuel ,antiseptic, intoxicant   etc)

[moparsr2fast]

  Another thing you could do, is take 2 weeks from work, and live as if fuel stations, grocery stores, the power company were all shut down/closed. At the end of that 2 weeks, you would have an idea of what you need to aquire to ride out a minor emergency. If the crap hits the fan, medicines will be up there for assets also. 

[68X426]

---And it will be taken as needed---

Anyone who thinks he's joking - that is exactly what the great Democrat comrade Franklin Delano Roosevelt did in 1933. For the greater good.

[twodko]

  Another thing you could do, is take 2 weeks from work, and live as if fuel stations, grocery stores, the power company were all shut down/closed. At the end of that 2 weeks, you would have an idea of what you need to aquire to ride out a minor emergency. If the crap hits the fan, medicines will be up there for assets also. 

Here is a guy who has his eye on to ball! IMO

[ws23rt]

---And it will be taken as needed---

Anyone who thinks he's joking - that is exactly what the great Democrat comrade Franklin Delano Roosevelt did in 1933. For the greater good.

If I was joking I would have used something like

Preparing for a natural disaster is one thing. But expecting to be the neighbor hood banker with a spendable commodity pushes practical thinking a bit much.

What I see coming is not destitution for the masses. It is stripping individuality and ingenuity from us. When we don't have to make our life decisions for ourselves and are forced to comply where is the incentive to excel let alone enjoy our own accomplishments.

[Patronus]

I would seek out and purchase any/all 2nd gen Charger door and top of quarter moldings. Also lower dash vinyl is always a safe bet.

[twodko]

 

[Chad L. Magee]

This was exactly my point with regards to having a stash of small weight precious metal modern coins. In times of barter only the actual weight of such coins will matter. Ammunition would be a form of currency as well. Same same with "community" skills.
I would submit gathering such things right now is a prudent thing we should all do. The "Boy Scout" theorem......always be prepared.

But, if you pick out better quality (ie. collector value) coins out of the ones you can buy, it will hedge your bet a bit if the worst does not happen when you go to sell them.  At the worst situation, you lose nothing over the price of the silver but your time looking for them.  People are doing this right now with bankrolls of pennies, culling out the pre-1982 ones for copper content.  Are they worth more right now?  No, because you can't melt them yet.  Whenever you legally can, the price of them will go up due to the price of copper being larger than the amount on the coin.  Same can be said of wheat pennies (1909-1958).  Some people search change for silver coins (I am one of them).  When dealing with silver, it is common to buy American pre-1965 dimes, quarters and halves for the 90% silver content in them.  Cherry picking out the ones worth more is a common thing that happens everyday.  Most coin dealers buy in bulk quantities ($1000 face bags for example) and do not always have the time to go through it all to check for rare ones.  That is especially true if a large collection comes into the store, gets sold in bulk, and the dealer uses some of the bulk coins to finish a transaction that he needs to do.  Older type coins can end up in the junk silver boxes, marked for sale at a multiple of their face value based on silver content.  Some are worn pieces that the dealer does not want to price out because he has better ones for sale for more money.  Over the years, I have cherry picked 1820s-1830s bust coins for scrap price this way (three halves, two quarters and five dimes), not to mention two 20 cent pieces that were overlooked as silver quarters.  Heck, one collector lucked out and found a 2 1/2 dollar gold die that was struck on a silver dime blank in poor condition last year.  He paid a few bucks for it.  You have to be knowldegeable in the coin designs to see the difference between the two, most peole would not see the difference.  If I remember it right, it neted him $10,000 after the auction was over....

[twodko]

Knowing what to look for can really payoff thats for sure.

[Chad L. Magee]

I have just a bit more to add.

For those of you that buy gold/ tangible assets/etc. Good for you for future planning but that planning is for the greater good because what you have that is of value belongs to the greater good---And it will be taken as needed---

Not always.  One of my great uncles (who died in the 1980s) still had his early 1800s gold coins from his grandfather (who died before the Black Friday event of 1929).  I saw them as a small lad back in 1985 while visiting my great aunt.  (I did not inheiret them, they went to another side of the family.)  Here is why he still had them:  The Gold Reserve Act of 1933 had a little exception on collector gold coins that most people missed.  Yes, people were legally required to submit their common gold coins above a certain amount (they could keep $100), but any of the earlier collector ones were not required to be submitted.  Many simply did not know of this exception and dropped their gold collections into the government bucket.  They were then melted and made into bars still stored at Fort Knox today.  Did people hide what they were required to turn in.  Yes, some did.  The challenge was that most did not have the resources to simply hide that much money out of their budget for long term.  There is a story about the most valuable US gold stash and it involves coins dated 1933.  Why is that a problem?  They were not protected by the Act and were not supposed to be released.  Israel Switt hid 10 $20 gold coins dated 1933 (yes, the rare ones) until well after his death and a family member submitted them into the government for authentication.  Of course, they were then seized because they violated the Act because they were not vintage collector coins at the time that the Act was started.....

[Chad L. Magee]

Knowing what to look for can really payoff thats for sure.

So true.  I once bought a bag of 800+ buffalo nickels at a local coin auction a decade ago.  At the time, I paid $50 for them and got laughed at by two jerk coin dealers who bid me up.  They said it would just be dateless junk and that I would be begging them to take them off of my hands.  True, some of them were acid dated (non-rare ones), but most had full dates naturally.  Out of the bag, I pulled 95 1913 Type I P mints, 5 1913 Type I D mints, 3 1913 Type I S mints, 5 1913 Type II P mints, 2 1913 Type II D mints and 2 1913 Type II S mints plus most of the other semi-keys for my set, including a 1917-1918 overdate and 1937 D 3 legged.  Was it worth it? ....

[AKcharger]

Well, the part about being prepared couldn't be more important. Just think of those people in New Orleans after Katrina wondering around for days waiting for some nameless/faceless bureaucracy to provide them food and water    I'm not counting on anyone when disaster strikes...and it will. If help comes super! but I'm not betting my family's life on it

http://www.ready.gov/natural-disasters

[dukeboy_318]

I'm waiting for the gold bubble to burst. Buy buy buy gold ads are everywhere. It's only a matter of time. Once it does drop though, I shall buy some   

[twodko]

My plan as well. I don't think it will drop to the price point before the huge bubble exploded but I've been watching.

[ACUDANUT]

For me, mutual funds are the best bet. I have lost enough money in common stock to build me a big block, seriously. I dont play that game anymore. I moved the lions share of my 401K in to a fixed income fund 2 years ago. The market went up 30% since then, my K went up 3%, but I can sleep at night knowing it is safe.

Problem I foresee is inflation rearing it's ugly head. With all the money that has been printed in the last 3 years inflation is coming. No way around that fact. Money sitting in cash earning 3% will loose value, wont keep up with the coming inflation rates. What to do? 

Back in the 70's when inflation was in the double digits interest rates were high as well. CD's were paying double digits. Will it be the same way in the near future? 

Question. When you moved your 401k plan, did you have to pay out 35 percent, to the Government ?

[Paul G]

I moved the lions share of my 401K in to a fixed income fund 2 years ago. The market went up 30% since then, my K went up 3%, but I can sleep at night knowing it is safe.

Question. When you moved your 401k plan, did you have to pay out 35 percent, to the Government ?

No I didnt have any penalties at all. I was able to move the money to another type of investment within the same fund family. Nothing changed as far as the IRS was concerned.

[ACUDANUT]

 I see. If the Government is printing too much money, how can you prove it.  Why haven't I got any of it. Who is getting this free printed money.

[Paul G]

The Gvmnt is buying bonds with the money. The bond holders have the Govmnt money to invest. They buy stocks, stock prices go up. What do we get from all this? Umpteen trillion dollars to pay back, and artificially high stock prices. Now that there is more cash in the system, and the same amount of gold to back it up, each dollar is worth less. Foreign country's are not so keen on that.   

[ws23rt]

This is not a complicated issue but is made so by talking about several things at once.

The simple reality is that when money is printed beyond the replacement of rotted bills it dilutes the value of the existing money. This happens automatically and is called inflation.

The gov takes money from our pockets to pay for what they buy. When they print money they are spending fake money.  The fact that they borrow money as well just adds to the mix.

Their are tons of pallets of money sitting--waiting for the ok to spread around.  But what it will do ultimately is reduce the value of the money already out there. There is no printing fix to the power of economic growth.  There is only an illusion that bit by bit takes buying power away from us.

To grow the wealth and power we have is to grow the economic engine. When the engine idles we go nowhere.