Where do you keep your Savings?

Southie · July 25, 2015, 8:05pm

Re: Where do you keep your Savings?

Gold is down to 1085 from a peak of 1800 set around the time of your post.

Southie · July 26, 2015, 12:13am

Re: Where do you keep your Savings?

MissFreudian:

This old tradition of giving gold in our culture is just another way of giving the children some financial security in my opinion. So that much hasn’t changed. The only difference is that now girls don’t really like wearing gold jewellery, so getting gold in another form makes complete sense. obviously you buy what you can afford.

We have been subscribing to Moneyweek magazine since the last 2 years or so, and surprisingly enough, everything published in it so far has been pretty accurate. They are quite leftist compared to WSJ and FT. If you read carefully below, the latest from them regarding Gold, it might help you make up your mind.

***Is this the end of the gold bull market? No By Dominic Frisby, Moneyweek, Dec 14, 2011 **
Hang on to your gold

Despite all the havoc in the eurozone recently, gold has been having a rough time of it. It fell 3% on Monday, and another 2% yesterday.

And now some are calling the top of the market.

My editor, John Stepek, has just sent me a Bloomberg article featuring US newsletter writer Dennis Gartman, who always seems to get let out when gold has a big sell-off.

He declares that “we have the beginnings of a real bear market, and the death of a bull”.
So do we?
What were you doing during gold’s last bear market?
Well, gold is up about 16% on the year so far. So no bear market there.

This compares with an S&P 500 which is ever so slightly down; a FTSE 100 that’s down around 10%; a commodities index that’s also down around 10%; a US bond market that’s up about 17%; and a US dollar which is ever so slightly up.

If we use the definition that a bear market is a market that is down 20% from its highs, then Gartman may well be right. I don’t say it will happen, but there is a very good chance that gold could fall more than 20% from its early September high of $1,920 an ounce.

This would be perfectly normal. Gold has had three 20% corrections since this bull market began in 2001. Once in 2006, again in 2008, and just three months ago in September – yes, just three months ago. If you look at intra-day prices, it fell from a high on 6 September of $1,923 to a low on 26 September of $1,535. I make that 20%.

The problem is, when it made that low – at about 9.15 am, if I remember rightly – I was out walking the dog on Wandsworth Common. I’d just dropped the kids off at school, and now I had my dog ball thrower in one hand, iPhone in the other and was staring at the Kitco App, thinking “ooh, I should buy some silver”. (Silver had fallen to $26).

Smartphone technology is wonderful. It makes many things possible. But this wasn’t the ideal moment to be implementing these sorts of decisions – even if I had previously sold at $1,920, which I hadn’t.

By the time the US markets were opening, both gold and silver had already rallied. The former then closed the day above $1,600 and the latter above $30. The bear market was over. I’d pretty much missed it.

What were you doing during gold’s last bear market? I was walking the dog.
If trading these market swings is your game, that’s all fine and dandy. Myself, I just don’t have the time or the mental discipline required for this kind of approach, full time. I have a trading portfolio, which I sometimes play with, yes. But I also have a much larger core holding which I don’t touch. I have other things in my life I want to concentrate on.

So, first, I look at the fundamentals for gold. Have these changed? No. If anything they’ve intensified. I won’t go on about them here save to say we are going through a generational monetary unravelling and in such a situation you want to own gold. You may well also need your metaphorical tins, guns and bomb shelters at some stage, but I do not have a buy signal on those just yet.

Then I like to look at a chart.

The 144-day moving average loses its magic
The wonderful 144-day moving average is back in the spotlight. This is the red line on the chart below, marking the average price of the previous 144 days. It has, since the crash lows of 2008, continuously caught the lows in gold. Why 144? Don’t know. Ask Leonardo De Pisa. But it has worked brilliantly.

When I began writing this article, we were sitting right on it. I wrote,“these things don’t work forever and I’ve an inkling it’s not going to hold this time”. Gold promptly fell through it.

For now, technically, the issue with gold is the trend line coming down off the September highs, which I have drawn in red on the chart below. However, coming up underneath and offering support we have the one-year moving average in green and that rising blue trend line.

The trouble with trading
As well as three 20% corrections, gold has had a further four 15% corrections since this bull market began in 2001. If you want to trade them, fine – if you can do it. If you want to ride them out – also fine. But if you do trade these swings, the risk is that you fail to buy back and you lose your position. Then, all you can do as gold rises is watch and declare that gold is a bubble.

In April-May 2006, gold suddenly launched from around $540 to $730. That was too much, too soon. Gold gave it back pretty quickly – by late May, if I recall – and spent the next 18 months consolidating and edging higher. It wasn’t until October 2007 that we saw new highs.

From July 2007 to March 2008 gold went from $640 to $1,033. That was too much, too soon. By October 2008, it was back at $680. It wasn’t until October 2009 that we saw new highs – again a full 18 months after the first high.

My take on today’s action is that we’re seeing a similar pattern repeating. In July of this year, gold set off from $1,500 on a move that saw it $400 higher by September. Again, it was too much, too soon, and now we have the inevitable correction.

We can expect many more months of whipsawing, frustrating, consolidating action. I don’t think we’ll see new highs for a year or more. If these horrible markets get even more horrible, if fear and panic spread, if liquidity runs dry and nations serially default, we could easily sink to $1,500, to $1,250 - $1,000 even.

But gold could just as easily set off on one of its runs, which always seem to come when you’re least expecting it, and hit $3,000 or $5,000.

So hang to your hats, my friends – and your gold; trade in and out, if you’re good at it – don’t if you’re not. But your physical… Don’t let anyone near it, least of all yourself. In a few years time, you’ll be very glad you didn’t.

If you could find Alah Deen ka chiragh/lamp.

"We have been subscribing to Moneyweek magazine since the last 2 years or so, and surprisingly enough, everything published in it so far has been pretty accurate. "

Highly doubt any magazine has such a terrific track record.

This article looks in the rear vire mirror and says Gold is up 15% - and is not in a bear market. If this magazine recommended Gold at 250 I would salute it. But to say at 1920, it is not in a bear market and hang on, it is just a bunch of bull crap.

One other poster here had stated at 1780, that one of his contacts in the know said God is the place to be. Since then, Gold is down a lot - and we have not heard from him or his contacts.

For each such article, one can find other articles that say the opposite.

Some may be pumping up Gold because they may want to get out and sell to unsuspecting people. So buyer beware

Fans of Parveen Shakir - Please, do not click on this thread.... Thankooo

I read the article more carefully. It makes the case for a long term bull market in Gold from an economic perspective. Then it mixes in Technical analysis - something abt a 144 day moving average, support, resistance etc.

The main message I got out of it, dont trade in and out. Gold could easily go down to 1000 or it could go up to 3000-5000.

It preaches long term buy and hold strategy - but spoils that message with technical analysis mumbo jumbo.

I am not economically savvy to predict what will happen in future and how that will affect Gold prices. But it is a mistake to promote Gold as an investment at these prices. Yes, Gold (may) have a role as a part of one’s portfolio. So if you had Gold, and it has ballooned to a higher pct of your assets, then time to sell a bit and get the asset allocation in line with desired pct.

When it comes to financial investment prediction, it is a good practice to come back after a few years and check performance.

Clearly the magazine with a perfect record was far from perfect.

jeans · July 26, 2015, 5:30am

Re: Where do you keep your Savings?

U tell… @Southie

Southie · July 26, 2015, 6:21am

Re: Where do you keep your Savings?

There is that communications issue again.

jeans · July 26, 2015, 6:44am

Re: Where do you keep your Savings?

No…really… I was asking for some suggestion…where should I keep it…

Southie · July 26, 2015, 7:01am

Re: Where do you keep your Savings?

Asset allocation is the key. There r plenty of posts on that topic in the business forum.

Here is one for your age.

75 stocks. 25 cash. Or 70 cash 15 bonds 15 cash

Among stocks - buy mutual funds. I speak as us investor.

70 pct of the 75 in us total market index fund, 30 pct in international index fund

50 pct us bond index 50 pct international bond index

Cash - ladder ed CDS

This is ONE example.

jeans · July 26, 2015, 10:23am

Re: Where do you keep your Savings?

Got half didnt got half… And I don’t even know about international securities… Thingy…:cobra:

Should do my homework before chatting ur head… Will start after 29 august..

Southie · July 26, 2015, 2:31pm

Re: Where do you keep your Savings?

There is nothing to get. There are what they call Index funds that mimic the market. So if I buy the Total US Stock Market fund , it is as if I bought all the stocks in the market. Ditto Total bond fund.

This is ONE example.

There are also index funds that mimic one segment of the market. For example the Pharmaceutical index fund. I don’t bother about those. Some do.

jeans · July 26, 2015, 2:35pm

Re: Where do you keep your Savings?

Listen to me… I dont know what u r talking about…waaaaaaaaaaaaaaaaa

seriously..no practical knowledge.. and I will read all business posts get familiar with terms… know more from friends… and then will get back to you.. though I get what u said above.. but still …

Southie · July 26, 2015, 2:41pm

Re: Where do you keep your Savings?

In that case, don’t start here. At least I am not a prefessional.

Go to investopedia.com it is a good site.

Also, there is more to life than stocks. Go live.

jeans · July 26, 2015, 4:47pm

Re: Where do you keep your Savings?

I ccurrently go on all the tax saving stuff and thingies…wherever papa puts it… Apart from that thanku Sir…
Will check from some base/source thingy… Wasnt planning on starting here…

Southie · July 26, 2015, 5:18pm

Re: Where do you keep your Savings?

Looks like you had that not starting here covered. Nice.

Yes, good to know tax implications. No point paying the taxman more than fair share.

Southie · July 26, 2015, 5:24pm

Re: Where do you keep your Savings?

This thread title is not correct. The correct questions to ask is not where do you place your saving now. Because once you ask that, advice’s will pour in that make no sense. For example the 1st reply in post 2 states “all experts agree gold is safest option”

Then op brought up some money magazine that she claimed ha ld the best record on gold. Which was advising readers to invest in gold. AT THE TOP.

I didn’t have 5o be a financial genius to know the following

Gold had moved from 250 to 1800 or 1850 from 2002 to 2011. That is a huge move. And for poster 2 and the OP and the magazine to promote Gold at all time HIGHS seemed irresponsible.

I stated my case that I would rather take some profits in gold and reallocate to some other asset that hasn’t moved much - this is Asset reallocation or balancing.

I make it a practise to revisits threads where folks have claimed outrageous stuff and out out bad advice. Goal is not 5o show them they were wrong.

Goal is to show people that they should do their own homework. And that most advuce on the Internet is worth what you pay for.

Southie · July 26, 2015, 5:29pm

Re: Where do you keep your Savings?

The correct questioning should start with

What is the asset allocation that is appropriate for me considering my risk tolerance?

jeans · July 26, 2015, 5:40pm

Re: Where do you keep your Savings?

Haan…thatbtoh is like base… That u invest a part of course in gold and other liquid and safe options… And rest could be based on fluctuating markets with high returns… While I prefer basic deductionn be in the securities that are tax deductible…above base line where ever dad…which is basically gold…and a no. Of Insurance schemes… Cz he can tolerate less returns but not fluctuations… While folks at tutions talking about stock markets that I just don’t get… Evening closure morning thingies and stuff… That I want to know abt…

Southie · July 26, 2015, 5:52pm

Re: Where do you keep your Savings?

jeans:

Haan…thatbtoh WHAT IS BTOH? is like base… That u invest a part of course in gold and other liquid and safe options WHY DO YOU CALL GOLD A LIQUID ASSET? AND WHY IS IT SAFE? IT DROPPED 40 PCT FROM 2011 TO NOW… And rest could be based on fluctuating markets with high returns MARKETS DO FLUCTUATE. BUT OVER LONG TERM THEY TEND TO BE UP. BY LING TERM I KEAN 10 YEARS OR MORE. ONE EXCEPTION WA AT OEAK OF 2000 TECH BUBBLE. EVEN THERE THE S&P500 RECOVERED TO 2000 HIGH BY 2007. BUT THAT WAS OBERVALUED. SO IT TANKED TO 675 BY MARCH 2009. THEN FINALLY FEVEIVERED TO 1500 CIRCA MID 2013. THAT IS 13 GEARS LATER. SO IF YOU significantlt OVERPAY FOR AN ASSET, your retirees WILL SUFFER… While I prefer basic deductionn be in the securities that are tax deductible…above base line where ever dad…which is basically gold…and a no. Of Insurance schemes… Cz he can tolerate less returns but not fluctuations… While folks at tutions talking about stock markets that I just don’t get… Evening closure morning thingies and stuff… That I want to know abt…

I think I understand ur last few sentences. You don’t really need to understand evening closure morning thingies if u r a long term investors. As opposed to a day trader. Which is a folks game.

jeans · July 26, 2015, 6:12pm

Re: Where do you keep your Savings?

Yeah…well they have some business of it…

Better still…I willl check it…investopedia..

Southie · July 26, 2015, 6:31pm

Re: Where do you keep your Savings?

What is btoh

jeans · July 27, 2015, 2:01am

Re: Where do you keep your Savings?

They…means those tuition folks do some kind of Business in securities…

And… That’s “both”.

Southie · July 27, 2015, 2:05am

Re: Where do you keep your Savings?

Do you have sirf ek Saridon?