Off topic perhaps....Kruggerand vs crypto vs whatever...

[Brian Roth]

I know that Group DIY is NOT the ultimate resource for money advice, but just looking for ideas from you intelligent folks.

One of my best friends (30 years younger) is a VERY! smart kid who had a tough life. Odd upbringing, time in prison for pot possession as well as a few DUI arrests. Wild child is now realizing to settle down as he approaches 40.

He seems to be getting inheritance money soon so he has asked for advice....as if I am sort of money guru.

I suggested he look into Krugerands to physically hold since he hates banks due to bad experience in his wild days. In fact, the banks won't do any business with him.

As a tech nerd, he has read about crypto. Neither of us understand it.....running server farms to "mine" funny money????

My vote for him is real gold. Now how to store it....under his bed or in a coffee can buried in the backyard? He likes the idea of real gold. I hate to mislead him!

I had rotten luck with 401K accounts back in the 90's....lost a lot of money, so I personally don't trust the stock market. It's a Las Vegas slot machine.

Bri

 

[Brian Roth]

Forgot to add these items:

https://www.latimes.com/california/...ls-safe-deposit-boxes-forfeiture-cash-jewelry

And an olde hippie song:



"Cash will get you through"

Bri

 

[PermO]

If you just want to "stash your stuff" without anyone else getting their hands on it... gold and silver is the way to go.
Some very expensive watches are also very good investments, but you'll really have to know that market.

I'd stay away from cryto, nft's and stock market... it's just a scam.

 

[john12ax7]

A lot would depend on the amount, goals, and timeframe.

A mix of stocks, real estate, certain bonds, and gold is a good way to go. A lot of the risk comes from the price you pay.

Crypto is speculation imo.

 

[iampoor1]

Crypto is the wild west. Crypto prices can easily fluctuate 90% or more. I would stay away unless he wants to become a day trades or possibly buys when the bear market returns. Not a good passive investment IMHO

 

[Brian Roth]

My friend is definitely onboard with hard gold. He had this idea to buy bars of gold....and my suggestion was the Kruggarands instead.

A mix of stocks, real estate, certain bonds, and gold is a good way to go

I have no faith in stocks after bad experience with a managed 401K a few decades ago....it's a Vegas slot machine, and the "house" controls the outcome to their advantage. Real estate is a hard asset for long term and I got killed moneywise owning several of my own residences after decades of ownership.

I think I'll stick with my suggestion to my friend re. gold since it makes sense to him (and me as well) in his circumstance. He just needs a proper way to keep it at hand beyond putting it under his mattress.

But, I am just an aging audio engineer....not a money expert!

Bri

 

[PermO]

As a sound engineer I was hired for a "investment tour" , a couple of top investmentbankers tour the country inviting people to their "wonderfull oppertunitys"
So once a week I had dinner with these guys and learned nothing new, they just confirmed.

For them it's always a long term thing.
They hype it up, so people put their money in, then they crash it and cash.

And for the next round...

 

[living sounds]

Crypto has higher volatility but more upside long term. Yes, it's a risk-on asset. But it's also the future (many compare the current crypto market to the mid-90s internet).

With fiat money you lose, too, increasingly so. Looking at the overall level of private and public debt there is little to suggest the ship can be rectified smoothly. The last time the world was in a similar situation there was a World War and the US government bought up gold at a defined low price.

Since debt on the one side is just wealth on the other side deleveraging and redistribution are what will follow, either violently and fast (war) or slowly by taxes, buying-up-below-market-price by governments (like gold in the 30s in the US) etc.

Real estate is massively overvalued in many regions now (too much printed money in the market) and can be taxed and not run away. Look at the russian oligarchs likely to just loose all their London mansions (more than 70.000, estimates say).

Gold hasn't done well for a long time and may yet lose to Bitcoin, simply because it cannot be transfered as easily and the younger generation increasingly doesn't believe in material values as those before them. Both by themselves have low intrinsic values, which makes them ideal for currency.

Many stocks may go down a lot, since they have also been buoyed by money printing.

The key to understanding value is to grasp that it's all relative. The dollar or euro have no intrinsic value, and their value has massively gone done due to the money printing since the financial crisis and Covid.

The more companies and legislators hold crypto on their balance sheets and in their portfolios, the less likely it gets that it will be banned. Politicians are wary of hurting the real economy and their own pocket books.

Ultimately the best strategy is a diversified portfolio that includes many asset classes. And be prepared to lose something. When the long-term debt bubble finally bursts, everyone who owns is highly likely to do so.

 

[john12ax7]

I have no faith in stocks after bad experience with a managed 401K a few decades ago....it's a Vegas slot machine, and the "house" controls the outcome to their advantage.

I don't agree. Shareholders make money as companies and the economy grows. Certainly there is manipulation but individuals can still do well. The easiest countermeasure is simply become a long term buy and hold index fund investor. Over 20-30 years the gains will add up.

For gold you could also consider adding some other precious metals as well. Silver might be more easily tradeable in lower denominations.

 

[john12ax7]

Crypto has higher volatility but more upside long term. Yes, it's a risk-on asset. But it's also the future (many compare the current crypto market to the mid-90s internet).

That is a good comparison. The internet changed the world, as blockchain will probably do as well. But most of the internet companies went bust, I suspect most crypto will follow suit.

BTC and ETH probably make it. But what is their actual value? Cisco made it through, has made billions of dollars, and yet its share price is still below 2000 level.

 

[Brian Roth]

Anyway as we crash into a new war in Europe ....My young friend listens to me re. gold re banking investments while we discuss world affairs . As if I am an expert!!......but I suspect the stock market will....hmmmm....crash. I need to top of my car's gas tank before the prices go through the roof.

My friend is paranoid in these times and wants to stock up on guns and ammo, as well as a few other (saner??? ok...) older friends of mine.

Backing up here now.....IF someone bought physical gold....what the hell do you do besides keep it a secret??

A distant friend got 10's of thousands of dollars when his Granny left him a note after she passed, telling him to look in her freezer in her house. Many Kruggerands....

ARRGH! <g>

I'm just a guy who checks behind the sofa cushions from time to time <g>.

Bri





.

 

[Brian Roth]

lol

 

[living sounds]

It's likely not a bad idea to keep some actual gold hidden at as secure a location as you can manage (not "virtual" gold on an exchange).

BTW, thinking in longer terms the value of gold would be doomed once space (asteroid) mining operations ensured a practically unlimited supply.

 

[JohnRoberts]

One question is how long does this 40YO plan to live? If another 40 years Gold will not perform as well as some other asset class.

a) does he own a home? Real estate generally does well over decades.
b) a fraction in precious metals (gold silver) makes sense but not for 100%
c) common stocks do well over decades, but can go through bearish periods between bull markets

Timing a large purchase is always hard to execute perfectly. Home prices have risen something like 18% year over year, stock market is in a 10% correction (on ukraine news, and fed tightening anticipation). Gold /silver is up in the short term but my (virtual gold GLD) has been dead money for years, virtual silver SLV is doing better than gold but not much. You can average into stock positions with modest sized monthly buys, real estate is generally a single large purchase.

d) putting a small fraction into crypto makes sense for a young(?) person, but don't ask me which one (maybe etherium), I have abstained and will continue to watch crypto from a safe distance.

JR

PS: used cars are up something like 40%, new cars are selling for more than sticker price. Of course a concern is buying during the highs of a supply chain bubble.

 

[shabtek]

+1 bubbles


"buy low!"

paranoia /emotion does not usually lead to great decision making, neither does having guns and ammo around

 

[JohnRoberts]

+1 bubbles


"buy low!"

paranoia /emotion does not usually lead to great decision making, neither does having guns and ammo around

The rest of that axiom goes buy low and sell high... many forget the sell high part. I have several stocks in my portfolio that I sold off half after I got a double, so now I am playing with the houses money. I am not smart enough to trade common stocks short term but sometimes it's obvious. Last year I made a quick 30% in Pfizer, but I sold it too quick to get long term capital gains right... I did lock in the capital gain.

Right now I am looking at an oil stock with 4%+ dividend... but I am waiting for a better entry point. I expect oil stocks to dip after the Iran nuclear deal gets renewed and iran oil is brought to market. Of course the future hasn't happened yet so I might be wrong.

JR

 

[living sounds]

d) putting a small fraction into crypto makes sense for a young(?) person, but don't ask me which one (maybe etherium), I have abstained and will continue to watch crypto from a safe distance.

Mostly BTC and ETH long term, also some LUNA and SOLANA.

Disclaimer: Not financial advice, buy at your own risk!

 

[living sounds]

The rest of that axiom goes buy low and sell high... many forget the sell high part. I have several stocks in my portfolio that I sold off half after I got a double, so now I am playing with the houses money. I am not smart enough to trade common stocks short term but sometimes it's obvious. Last year I made a quick 30% in Pfizer, but I sold it too quick to get long term capital gains right... I did lock in the capital gain.

Right now I am looking at an oil stock with 4%+ dividend... but I am waiting for a better entry point. I expect oil stocks to dip after the Iran nuclear deal gets renewed and iran oil is brought to market. Of course the future hasn't happened yet so I might be wrong.

JR

To be safe, just DCR (dollar cost average). BTFD (buy the xxxxing dip) if you dare. And buy the rumor, sell the news.

 

[JohnRoberts]

To be safe, just DCR (dollar cost average).

yup

BTFD (buy the xxxxing dip) if you dare.

actually there are bullish and bearish versions of that theme. Bullish is buy the dips, Bearish is sell the rips. I am long term bullish but cautious that the fed might actually do some of what they have threatened to do... (typically they just try to talk markets down/up). This year could be flat, or sluggish, or not. Consumers have money but big/small business gap is expanding (not healthy IMO).

And buy the rumor, sell the news.

always

Another old trader saying... the market can remain irrational longer than you can remain solvent...

JR

 

[living sounds]

actually there are bullish and bearish versions of that theme. Bullish is buy the dips, Bearish is sell the rips. I am long term bullish but cautious that the fed might actually do some of what they have threatened to do... (typically they just try to talk markets down/up). This year could be flat, or sluggish, or not. Consumers have money but big/small business gap is expanding (not healthy IMO).

The FED tried to hike rates and stop buying bonds before, they had to turn around again because the economy suffered too much. The situation we are in now, governments would need a big war to justify what they actually would have to do (massive taxing, redistribution, as happened in the 1930s-1960s in the US). Oh wait... Putin might just have started the deleveraging event of the century...

Another old trader saying... the market can remain irrational longer than you can remain solvent...

Indeed.