Over the last week, I relocated my equity investment portfolio and basically moved myself out of stocks entirely. Now I have pretty much an evenly split fund between Gold ETFs, Food ETFs, and Treasuries. This seems to be holding steady. The move wasn't without cost, I lost over 3K last week.

Observations or advice from anyone else here?

Don't second guess yourself for being prudent.

I was out of the market in 2006.

From hedge funds, to naked short selling, "creative" accounting, the plunge protection team, helicopter drops of cash. The game is rigged, and the odds always favor the house. (I would really be in to stocks if I worked for Goldman Sachs!).

Think of those nice upstanding chaps who lost millions when the tech bubble burst. Now it's going to happen all over again. Except this time it's going to be pension funds, 401ks, IRAs.

Rather than a market crash. This time it could be more subtle as monetary inflation sneaks into your account in the dark of night and robs it of it's value.

How many J6Ps out there stop to think if their investments are outperforming the real inflation rate? Do they even know that the CPI isn't the real inflation rate?

People in third world countries buy much more gold than Americans do. They know better than we do, corruption, hard times, and currency crisis.

All that is holding the US dollar and the US stock market together is confidence and a certain degree of trust. The fed/gov/corp complex is playing every card they can to try to keep up appearances. At some point they'll fold. The curtain will be pulled back, and there won't be anything there.

Richard Heinberg talks about "last man standing" in the fight for what remains of the worlds oil supply. I think the same principle applies to the world of banking and finance. The game is on, and the investment banks and hedge funds have much bigger guns than you do. They're going to use them to remove you from your investments.

This classic SNL skit sums it up pretty well in case you haven't seen it:

http://www.youtube.com/watch?v=PISjq4UTG-E

I hope you didn't take the 17% losses that the Dow, S&P, and Nasdaq have taken. Too many individual investors are pulling out of the market and losing a lot of money because they get scared.

I am actually moving money out of bonds and putting into equities because I have a long term horizon and think this is a great buying time for stocks. Everything is on sale. I made an 18% return on Bank of America stock that I bought on Tuesday and sold on Wednesday. Obviously that was pretty lucky but those opportunities are out there unless you have pulled out.

joeltrout

Joel, your sig suggests that you think that we will soon be a nation starving for energy.

How does a nation starving for energy maintain a rising stock market?

I think the US will hold on for quite a few years and the stock market will recover fully and continue to go further. This wont happen overnite or even in 2008 but will definitely happen in the next 2-3 yrs. I'm 25 yrs old. I have to invest both in myself and financially to succeed if I live a full life.

I don't disagree, major cities are bad places to live if the US does fall apart. But the worse case scenario, I resort to my parents cattle ranch in the southern New Mexico mountains. Hopefully that doesn't happen in my lifetime but who knows.

joeltrout

So you don't believe we'll peak in your lifetime, Joel? We'll continue to do this?



Since a lot of folks on this board believe that we peaked in 2005 and are on some sort of brief bumpy plateau, I hope that you are at least entertaining the option that you might lose it all in the stock market.

You can't think of any better options for what to do with your money, given the level of risk currently and the presence of other options?

I'm 25 as well. I have this nagging suspicion that the market will get much worse before it gets better. The primary reason is that the underlying structural issue (bad financial products worth far less than markup value) isn't going to go away anytime soon. Effectively, we're talking about a 2 trillion dollar net write down that has to be dealt with one way or another. Either it's going to be a major stock market adjustment downwards or a large devaluation of the dollar, possibly both. In this environment, there is money to be made by playing with these market fluctuations, I agree, but I find it much safer to bet on financial products pegged to things that are sure to win in volatile environments (gold, food, national defense).

I believe we will peak in my lifetime but I dont believe we will quickly be back in the stoneage as so many here think about. It would take a world wide nuclear war or something similiar to send us back to living on the land.

People in the past have always pulled out of the market in recessions and lost out on a lot of profits. I am putting money in the market pieces at a time. Not all at once because I nor anyone else can predict the market bottom.

Even if you dont think the long term future looks good you can still be making money in the short term. If you would have invested in a few general stocks on Tuesday such BAC, PFE, MO, GE, etc... then you would have pretty good returns today. Luckily I did put a small amount in on Tuesday. Did I put all my money in? No way because the markets are jittery.

Just dont miss out on opportunities even if all you are doing is trying to grow your money for peak oil preparation or something else.

joeltrout

you sold into weakness with your stocks and bought into strength on the commodities side.

exactly what you are not supposed to do.

you need to have the guts to sell when everyone is buying and buy when everyone is selling.

this is, i admit, easier said than done.

i went to cash and tbills in october, aside from one stupid bet on the UNG etf where i am slightly upside down. I'm not buying gold or oil at these nosebleed levels. when TSHTF (in earnest) in the markets, everything will take a dump. I'll be buying with three hands after that.

Joel,

Buying BoA and selling about a day later to capture upswings is basically day trading. That's not a long term horizon, and quite frankly, unless a person has all day to sit around, read, watch markets etc, they will never take advantage of those ups and downs, and even if they do have the time, you're still playing against the house.

That definitely is a possibility and that is why I have a philosophy of don't invest money you need to live off of because you are right you can lose it all. I think it is unlikely but none the less a possibility.



I do own a home and have other investments like sliver bullions, municipal bonds, etc... Its pretty broad based ie diversified. Both sets of my grandparents went through the depression and both kept raw silver. So I do have some doom and gloom investments.

joeltrout

It's true, my moves last week were driven by fear. Otoh, I have solid reasons to believe that the market slide will continue. For the time being it's much safer to be invested in positions that have solid returns. Day trading is great if one has the time, but I don't.

If you see a long-term investment you made go up 17% in less than a day then it is silly not to sell especially in these markets. I bought BAC planning on the dividend yield to help my Roth IRA but couldnt resist the pure profit.

It doesnt take watching the markets all day at your computer (although I would argue many peakoil people sit on peakoil all day including more of myself). All you have to is buy a good stock, set an email alert to when it reaches a certain price, if that alert is sent look at the stock and decide to sell. All that can be done in less than 5 mins.

I spend a lot of time reading on peakoil as many others do and I check my stocks maybe once a day and that takes all of 2 mins to glance through the prices and headlines. If something catches my eye then maybe i spend more time reading about it.

joeltrout