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Who knows what will happen, but I don't have a good feeling. I'm thinking of moving my IRA money (currently in Mutual funds) into a money market account (same company). I told my financial advisor I wanted a 'safe haven' for awhile. I told him I was interested in moving the money to gold, or at least gold index, but he said maybe moving it to a money market would be better. If the market goes up, I won't get the benefit, but then again, if it goes down or stay the same, I'm good.
I'm no financial wizard that's for sure!, but does this sound like an ok plan? It wouldn't cost me anything since it's the same company of funds that I'm already in, and when I feel more comfortable about the market, I can always get back into some mutual funds at no cost.
By suddenly jerking all your money out of mutual funds into a "safe haven for awhile" and saying you can "get back in" at no cost you are basically attempting to time the stock market, with your current sell motivation being a not having a good feeling.
If that makes you sleep better at night then one could argue it is a good move, but as you said who knows what will happen and many would frown at market timing based on emotion.
Gold isn't really a safe harbor either. It's down nearly 14% in the last 30 days, silver over 30%. To me, it smells of the next bubble that's about to pop, but I've been saying that for last two years and it really hasn't occurred yet. Commodities are much more volatile the mutual funds. I could see pulling some out and putting it in gold or silver. It's not a move I'd make.
Unfortunately, there is no such thing a complete safety in this current economic situation. The best you can do is to properly diversify. There are basically four asset classes, and diversification between the four can offer some degree of assurance that you will not get completely wiped out.
The four classes are equities, bonds, cash, and real estate. Within each of these classes are several sub-classifications, ( mutual funds, etf's, individual stock, gold, money market etc.)
The most important thing you can do though, is to not make your investment decisions based on the emotions of fear and greed. Just think things thru logically and make the best decisions available to you. Then try to relax and realize that there are always going to be things we cannot control or plan for, but if you are properly diversified, you will weather the storm better than the majority.
Who knows what will happen, but I don't have a good feeling. I'm thinking of moving my IRA money (currently in Mutual funds) into a money market account (same company). I told my financial advisor I wanted a 'safe haven' for awhile. I told him I was interested in moving the money to gold, or at least gold index, but he said maybe moving it to a money market would be better. If the market goes up, I won't get the benefit, but then again, if it goes down or stay the same, I'm good.
I'm no financial wizard that's for sure!, but does this sound like an ok plan? It wouldn't cost me anything since it's the same company of funds that I'm already in, and when I feel more comfortable about the market, I can always get back into some mutual funds at no cost.
Any thoughts?? Would this be a good move?
Any thoughts? Yeah, you shouldn't be invested in equities if you can't sleep at night w/your portfolio. The market will have its wild swings.
Obvioulsy you are taking on too much risk to handle....
Unfortunately, there is no such thing a complete safety in this current economic situation. The best you can do is to properly diversify. There are basically four asset classes, and diversification between the four can offer some degree of assurance that you will not get completely wiped out.
The four classes are equities, bonds, cash, and real estate. Within each of these classes are several sub-classifications, ( mutual funds, etf's, individual stock, gold, money market etc.)
The most important thing you can do though, is to not make your investment decisions based on the emotions of fear and greed. Just think things thru logically and make the best decisions available to you. Then try to relax and realize that there are always going to be things we cannot control or plan for, but if you are properly diversified, you will weather the storm better than the majority.
there are more classes than that but if your talking 4 basic classes then real estate isnt a basic class ,gold is. real estate responds differently at different times not making it a reliable performer to the same conditions.
as an example real estate does fine at moderate to low inflation but it can die horribly during even moderately high inflation like we had in the late 70's early eighties. 18% mortgages killed that market off.\
real estate one time can soar with low interest rates but at times like now it can suck with low interest rates.
gold is a competitor for the dollar and pretty consistantly moves opposite it.
the four basic groups according to decades of research by harry brown and terry coxen are"
gold
long term treasuries
equities
cash
everything else like real estate ,commodities ,foreign stocks and bonds etc are just hybrids and mixes of what the above respond to but not in as reliable consistant form.
there are so many here that thought they would time things back in august when we were pushed against the wall with the debt ceiling . they jumped out the week before the deadline only to think they made a brilliant move back in the following week.
they then got sucked down right to the basement with the rest of us.
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