Silver stocks and 401K info

[GarouLady]

Hey ya all,

I need a bit of advice from the more experienced silver hounds and hunters. I have a 401K through Fidelity about 25,000. It is in bonds right at the moment and I was thinking about checking into trying and put some of that into Physical silver stocks or something like that, especially while its at 24 dollars at the moment. Any hints or ideas would be a big help.

Sincerely, GarouLady

 

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[PhattyB]

I just assume you call them and tell them... but do you really want to put all your eggs in one basket?

I'm sure all of us here truly believe silver will double again, and again.. but when? Before silver doubles, your money could have already doubled with a diverse portfolio of investments...

 

[fish on!]

I'm not an investment advisor, nor do I pretend to be one, but you definitely do not want to be that heavily invested in bonds right now (or ever for that matter). If you are not an incredibly savvy investor, your best bet is to pick the appropriate age targetted mix that your investment firm offers. Putting everything in one asset class is a bad idea. Putting all of your savings into an asset class like precious metals is even worse. PM's are currently trading toward the historic high ends of their values. Much of this is driven by fear about world economy and inflation. Historically, PM's are not high yielding as an investment class. They are mainly used to hedge against inflation.
Basically, what I'm trying to say is that you are going to be taking a huge risk with little chance of a correspondingly high reward (when viewed from a historic perspective).

 

[TheNotoriousA.G.]

If you cant hold the silver, don't buy it...

Like fish on said, a target date mutual fund might be a better idea. Vanguard has a bunch with very low costs basis that historically perform well. It's a decent risk vs reward way to "set it and forget it" as far as investing goes.

 

[fish on!]

I'm probably on the fringe in this website. I know there are a lot of people here that think the sky is falling and worldwide economies are going to cease to exist and we will all need to use silver to trade, etc. I don't believe any of that.
I coin roll hunt because I like the thrill of the hunt. I also would like to profit by selling the silver at some point, but it is in no way a major part of my retirement planning. To make money off of PM's you have to try to sell when there is one of the rare economic crises that causes the price of PM's to spike.

 

[TheNotoriousA.G.]

I'm probably on the fringe in this website. I know there are a lot of people here that think the sky is falling and worldwide economies are going to cease to exist and we will all need to use silver to trade, etc. I don't believe any of that.
I coin roll hunt because I like the thrill of the hunt. I also would like to profit by selling the silver at some point, but it is in no way a major part of my retirement planning. To make money off of PM's you have to try to sell when there is one of the rare economic crises that causes the price of PM's to spike.

I'm on the same level. Dad thinks the world is going to end, I'm like "meh." Only about 10% of my total investments are in PMs, and over 60% of that is just from CRH.

I look at CRH as free gambling. The most I can lose is nothing and sometimes I win.

 

[cooper36]

garoulady, I would not cash it in to buy silver.
To hold the silver in your hand which If you decided to do with a 401k you will take a 20% for taxes and if your not 59 1/2 another 10% penalty. Thats 30% total then you would have to find someone to buy it from with a profit from them of about 5%.Thats 35% gone from the 25k.If you do it on paper then it is only worth what paper is nothing.

 

[dejapooh]

I've learned several valuable lessons about investing in my time, I run by a few rules.

1) Don't give specific advice. As often as I've been right, I've been wrong. The winners outpay the losers, but NO one invests in the exact same things I do. I do not want to take responsibility for other people's losses, so I will give directions. I will point people in what I think is the right direction, but overall, I will not say, "Buy lkjsp at $14." Additionally, I do not follow anyone who says I should buy lkjsp, Tell me what you think will happen, and what field of companies will probably profit from it.

2) Stocks are nice, but all the REAL money I've made was made in Real Estate. Small buildings (4 units or less) you can get an individual homeowner loan at a fixed rate. Right now, that's like money in the bank. Avoid adjustable rates like cancer right now. There is no reason for the risk with rates this low, and rates are likely to go up as the economy improves.

3) The economy is not going to DIE. It may have rough patches, there may be inflation, perhaps even deflation (which is much worse of the overall economy), but we are not going to the end days, No one is being raptured, and there will be an economy... Like the good book says, "Don't Panic"

4) Avoid taxes when you can, but remember that those who make money also pay taxes. Taxes figure into the calculation, but in and by themselves they should never stop you from making a move.

5) When people are selling, it is time to buy. When people are buying, it is time to sell. I generally look for the direction people who know nothing are moving, and I go the opposite way. I sold all of my real estate except my personal residence (my wife would not let me), in July 2007. In June, a friend who knows NOTHING was cashing out his retirement savings to put a down payment on a house to use as a rental. They would only be $400 a month NEGATIVE cash flow, but think of all the money they were going to make when that house went up. That was my trigger (I also broke rule 1 and convinced him the time was wrong... He now thinks I am the greatest genius in the world).

6. manage risk, but remember these are weird times.

 

[N.J.THer]

I'm not giving advise and you want to think long and hard about any investments you make. If you don't fully understad it then seek a professional. With that being said I doubt very much that Fidelity offers any silver specific investments in their 401K but they may have a commodity choice that has a portion dedicated to silver or silver mining companies. Another choice would be a ETF (Exchage Traded Fund) specializing in silver. I did not look to see if it exists but I'm sure one does. May have to rollover your 401K to an individual IRA to do this but Fidelity could let you know.

If you are looking to invest in the hard asset of silver then I believe you would need to set up a self directed IRA...big hassle. In these you can invest in metals, art, collectibles, etc. but you have to do all the legal reporting that a custrodial bank would normally do for you. I think there are some new companies that may be doing this now for you so it maybe a little easier then in the past. Check out BullionVault...I think they do this in IRAs for Gold and Silver but I know nothing of the company.

It is probably not a good idea to be too over expoesed in any one asset since it increases risk. You can lose a lot of money but you can also make a lot of money. Good luck in whatever you decide to do.

 

[fish on!]

I'm on the same level. Dad thinks the world is going to end, I'm like "meh." Only about 10% of my total investments are in PMs, and over 60% of that is just from CRH.

I look at CRH as free gambling. The most I can loose is nothing and sometimes I win.

That's exactly how I view CRH'ing. It gives me the opportunity to invest in what I consider a risky investment class without having any risk.

 

[Joe777Cool]

I was a financial advisor for several years. Don't do it. If you want to put a small percentage into a mining company (I own Silver Wheaton), thats ok but you need to keep yourself diversified. I would recommend American Funds for the low costs and steady performance along with T-Rowe Price and Vanguard.

I heard way too many horror stories of people losing everything in the .com bubble. People were putting everything they had in unstable inflated companies and when they busted the people had no money, no retirement, and no job. This is a bit different but where will you be if yesterday silver had dropped to $5 and you had all your money there?

 

[OtlFrutiger]

Always diversify. However, right now is a good time to buy some stock, get a variety too. Get some from emerging markets, some from proven slow growth, and something from a specific sector (I like to pick the necessities: food, soap, energy, etc.) So that should be at least 30–40% of your portfolio. Next put about 25% into a guaranteed fund. You can probably find a guaranteed fund that will be paying about 4% right now. This way, no matter what, some part of your money is always growing. With the remaining 35ish%, you should split that up evenly between bonds, real estate (the stock version), and precious metal investments (if that's what you're interested in). So, that means, you would probably have only about 10% of your total to invest in precious medals. PM investments are not for the faint of heart. They are action packed—lots of ups and downs.

Always diversify your entire portfolio. If you're feeling brave, put more of a percentage into the stocks portion. I have personally turned about $60K into $100K over the past ten years, even with a volatile market. But the key is to diversify, and wait. Patience pays. If you watch your balance everyday, you'll go crazy—especially if you hold precious metals.

 

[FormerTeller]

I was a financial advisor for several years. Don't do it. If you want to put a small percentage into a mining company (I own Silver Wheaton), thats ok but you need to keep yourself diversified. I would recommend American Funds for the low costs and steady performance along with T-Rowe Price and Vanguard.

I heard way too many horror stories of people losing everything in the .com bubble. People were putting everything they had in unstable inflated companies and when they busted the people had no money, no retirement, and no job. This is a bit different but where will you be if yesterday silver had dropped to $5 and you had all your money there?

Not SLV?

 

[Joe777Cool]

Its all personal preference. I believe many on here already own a good deal of physical silver, a mining company will give greater exposure to other metals (gold, copper, lead, zinc etc) and involves the entire pm supply chain.

 

[GarouLady]

I put it all into bonds at the time because my dad died and I just didn't want to deal with it. But now I want to diversify since my company right now matchs 50% of my contributions. My dad's work didn't even do that. I just recently cashed in a IRA that I had because it was only making 6 bucks a year! sheesh. So I cashed it out, paid some bills with it and got some silver.

Sincerely, GarouLady

 

[CC-Hunter]

First of all, if you have been in bonds up to now you have probably done well, so congrats!

I would not be 100% in bonds going forward. Interest rates are very low and have to rise at some point, which will cause the value of the bonds to fall much more than the interest you receive.

I also have a Fidelity 401k. They have programs and live persons who can help you come up with an appropriate mix of investments, but by all means diversify. The target date funds that someone mentioned might be a good choice. Also, the company match is free money, so max that out if you can. The tax deferral is the icing on the cake. Also fund an IRA if you can.

For silver, I would just CRH, check reject trays and buy some here and there when you find a deal. I would not load up on silver.

 

[Owassokie]

I think most of the advice given is good. Most people have differing opinions on how you should invest but I'll echo the need for diversity. Furthermore, bonds are a bad play right now. From what you've said, I'm guessing you went in to bonds feeling they are safe. You've probably done really well so far. But bonds are extremely risky right now. You would be safer in just about any other investment so my advice is to do something...anything but having a mojority of your retirement in bonds. I would act quickly.

I want to address the talk about "If you don't have it in hand, you don't have anything". I'm guessing most of this advice is just regurgitated from someone else or a different forum. It doesn't really apply when you're talking about retirement accounts. If you feel like the world as we know it is going to end soon, then you shouldn't be in paper silver. But in that case, you shouldn't be in any kind of paper asset. You should cash out your retirement, convert it to a doomsday asset and plant it somewhere underground.

If you're going to continue planning for conventional retirement and your interested in investing in PM's, there has been a lot of good advice already given. I would caution you that some precious metals funds are not fully backed by physical gold and silver. Often times, the funds that are backed have higher expenses for obvious reasons. They are passing along the costs associated with the purchase and storage of said metals. So they tend to slightly under-perform a fund like slv. You'll have to decide which kind of fund you want to invest in.

There are options that get the metals closer to "in hand" but to my knowledge, it's impossible to invest in a retirement account and have your metal in hand. I have heard there is a way to practically have your metal in hand but it's a very extensive process and requires trust. The costs would be high so I'm not sure it would be worth it just to keep the metal IRA eligible.

 

[N.J.THer]

From your original post I thought you were just asking how to make the investment in 'silver' and not looking for advice on if you should or not. To give any investment advice it depends on your current age, risk tolorence, when you plan on retiring, how long you think you will be in retirement for, etc. Although there are some good general recommendations everyone is differrent. Yes, bonds may not be the best place to be right now but depending on what type of bonds your in and the above mentioned item it maybe exactly where you should be. Seek the advice of an investment professional or call the Fidelity service center. With the latter just keep in mind their main goal is to keep your money invested with them.

Good luck

NJ

 

[50cent]

I'm going to put this bluntly: Stocks or silver ETFs for the long term, ie retirement are bad ideas Buy physical silver for the long term. Silver ETFs are only good as a very short-term investment, and require 10K+ to make any money off them.

 

[Eminem]

I'm going to put this bluntly: Stocks or silver ETFs for the long term, ie retirement are bad ideas Buy physical silver for the long term. Silver ETFs are only good as a very short-term investment, and require 10K+ to make any money off them.

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