A fact that was well proven in the 1840’s-1850’s.
In a world where the conditions are such that people are stealing hordes of gold at gunpoint, I don’t think that people will be stealing hordes of gold at gunpoint. They’re more likely to be stealing food, firewood, guns, ammunition, medicine, clothing, fuel, auto parts, etc.
Badges? We don’t need no stinkin’ BADGES!
Yup.
I admittedly don’t follow my retirement accounts too closely. I check them out every couple of months. When the housing and tech bubble burst, lots of folks divested their accounts. Pulled out of the market. When it was going down or hit the bottom it’s not a good time to sell (Warren Buffet too 'when everyone else is selling, it’s time to buy [this of course has some codicils to it] ).
My portfolio invests a certain amount every paycheck buying more stocks/bonds. I tried to be optimistic about it knowing with lower value, I’m now getting more stock with every purchase :). Of course, as retirement nears, you need to be more conservative. Don’t want to start cashing out on a low.
the best are/were those ads hawking coins clad with “18 mg of 24K gold.” At the time 18 mg was about 77 cents worth of gold, and they were selling these stupid things for like $30-50.
In a post apocalyptic world, a shot gun with lots of various shells would be a really good investment. Gold, not so much.
There are a lot of stupid people out there. Even after the apocalypse. The stupid people are still going to want to grab gold over things like water purification systems, seeds, medicines, etc.
Gold prices just oscillate in such a haphazard fashion. That makes it a gamble and not an investment. Some people like to gamble. Smart investors don’t.
Except that over the long term, on average, stocks are actually going to be a good investment. Gold will not. You don’t need to try to time the market to “get in” or “get out” at the right time, you just need to buy stocks and hold them long enough. Commodities don’t appreciate that way.
This. Anyone who’s a “personal finance consultant” like the OP, should know that you can own gold without being a target for marauders.
Isn’t that the only advice? What other way would one possibly want to do it?
It would be the world’s most perfect advice if only stocks were consistently and accurately labelled “high” and “low” instead of being given those stupid numbers. Hell, the numbers aren’t even consistent: 10000 would be “high” for AAPL and “low” for BRK.A.
Dividend stocks let you buy low, sell high, and get paid to wait.
Exactly. Buy good investments and be prepared to hold them for the long haul. Don’t get distracted by hucksters or fads.
Idiots like Cramer who kill providing advice on ‘today’s great stock’ are simply generating churn for brokerage houses in the world. His advice is rarely good - though it is flashy - and anyone who takes it gets what they paid for it.
And the amount of gold commercials? Dear Lord, I took a question about investing in gold from a branch manager of a credit union yesterday. Anything someone is trying so desperately to sell you isn’t a good buy.
Remember, invest in good companies and well-managed mutual funds and be prepared to hold them for 20+ years.
Okay so a year or two ago, I used this very same strategy on a simulated stock market (it’s all the actual real life stocks, you’re just not actually buying any), and I killed. I chalked it up to luck because it can’t be that simple and because somewhere around here I’ve seen actual mathematical proof that it is impossible to consistently beat the market.
But it “feels” like a sound idea. And here you are telling me it worked for you too.
I mean… does it actually work? Are there investors who do this consistently? If it works, why doesn’t everybody do it, thereby making it not work? Etc…
The people who lost money are less likely to be bragging about it.
The people who lost money on most trades, but made big money on a couple good trades, are more likely to brag about the few good trades that worked out rather than discussing their whole portfolio.
More mathematically complex: to beat the market does not just require a positive outcome. If a general index fund grows 15% over a year, and your active buying and selling yields you 8% after fees, then what exactly have you gained? Nothing. You’ve lost. You’ve lost big, even though your emotional state is insisting that you’re awesome and prescient because the number this year is bigger than the number last year.
My friends and I were playing Settlers of Catan and we rolled 11 on the dice seven (7) times in a row. Which is something I’m not likely to see again in the whole of my life. One of my friends is a math professor and he felt compelled to calculate the odds. Less than one chance in more than six hundred million tries. But… I noticed this because it happened. It could’ve been also been a streak of 2s, or 3s, or 4s, or 5s, or 6s, or 7s. Etc. The chance of something “weird” happening in general is much, much higher than the chance of any particular weird thing repeating itself. If human beings keep playing board games, we’re likely to roll another billion times or more. So it will probably happen again, even assuming no defects in any dice. And someone like Warren Buffett will probably happen again, too.
It is very difficult for human beings to be honest to themselves about this stuff. It takes honest accounting, correct comparisons, and big sample sizes, and we’re bad at all those things even in an deal environment when we have no emotional incentive to ignore the truth. This environment? Not ideal. Ego is at stake. I don’t doubt some people can beat the market, consistently, for strong rational reasons. But I do doubt, very much, that there are many of them. And I’m definitely not in that club.
It sounds like you’re using a version of the relative strength index, the RSI. Which is a fairly useful tool to determine entry and exit points. It’s not the end all, you’ve got to look at other factors. I’ve never used it to determine what stocks to buy, but rather when. At any given point I might have my eye on a half dozen or so stocks I’m interested in buying, and if the RSI for one of them is significantly lower than the rest I might choose that one to pull the trigger on.
Here’s my viewpoint on owning dividend stocks. Being paid dividends is like collecting rent. If I own a $200,000 house that I’m being paid rent on and the housing market collapses and that house is now worth $125,000, am I going to panic and sell that house? Not as long as the rent keeps coming in. Hell, I might buy another house on sale.
If I own a dividend stock like Johnson and Johnson that pays me $2.80 a year for every share I own and the price crashes 30%, same thing. It’s an opportunity to buy. My self directed account annualized rate of return over the last 12 years is just over 10%, which is better than any of the actively managed funds available in my 401k.
Oh, BOY!
I LOVE Disneyland! 
I’m wondering how much of his personal finance advice consisted of strategies for avoiding being victimized by marauders.
Well, 401k funds are notoriously bad for performance because of their relatively high fees. I’ve seen some in client portfolios with annual fees of up to 2% That’s a freaking crime. Or they go into all C-shares where it’ll be double-feed in some cases so it’ll look low on first glance but the secondary fees add another 1% to the overall load. Ew.
The downside to dividend payers - and I’m not arguing against them - is that they tend to contain less inherent growth potential. Each quarter as they pay out dividends the value of the stock tends to take a hit as the overall balance sheet of the company suddenly take the ‘our cash is gone’ hit.
Well, that and not being lured out of the ‘big blue chip dividend’ payers category. There are ways to get into stocks that pay extremely high dividends…some I’ve seen have been as high as 12-14% (some of the oil guys). But when oil tanked last year they had to cut or eliminate their dividends and the value of the stock dropped more than 50% in a week or two.
Remember, if it seems too good to be true…it probably is.