Precious Metals Forum

Go Back   Precious Metals Forum > Precious Metals and Economic News > PM Bug

Like Tree8Likes
  • 1 Post By benjamen
  • 2 Post By PMBug
  • 4 Post By Penn
  • 1 Post By benjamen

Reply
 
LinkBack Thread Tools
Old 10-25-2012, 12:09 PM   #1
Predaceous stink bug
 
Join Date: Jun 2012
Location: Left Coast
Posts: 167
Liked: 71 times
Paper vs physical for retirement account

My parents asked me to manage part of their retirement account last summer. I put about 90% in bonds, munis and blue-chips. It's returned a modest 6% since that time, not great, but much better than the 0.15% they were getting in CDs.

I've earmarked the rest for PMs, and will be buying when the opportunity presents itself. Question is whether to buy physical or SLV, GLD.

I'm leaning towards paper because:
1) It's not my money, and my parents could want it back any day.
2) Paper is more liquid - I don't have enough cash to buy whatever amounts if it was physical.

Thoughts? My parents are very conservative when it comes to money and investments. They put their money in CDs for the last 20 years, losing any money is not an option.
superhero is offline   Reply With Quote
Old 10-25-2012, 12:24 PM   #2
Super Moderator
 
benjamen's Avatar
 
Join Date: Mar 2012
Location: Migratory
Posts: 1,620
Liked: 685 times
Originally Posted by superhero View Post:
My parents asked me to manage part of their retirement account last summer. I put about 90% in bonds, munis and blue-chips. It's returned a modest 6% since that time, not great, but much better than the 0.15% they were getting in CDs.

I've earmarked the rest for PMs, and will be buying when the opportunity presents itself. Question is whether to buy physical or SLV, GLD.

I'm leaning towards paper because:
1) It's not my money, and my parents could want it back any day.
2) Paper is more liquid - I don't have enough cash to buy whatever amounts if it was physical.

Thoughts? My parents are very conservative when it comes to money and investments. They put their money in CDs for the last 20 years, losing any money is not an option.
It really depends on how much $ you are trying to spend and which PM or combo of PMs. If you go physcial, how are you planning on storing it? Gold and Platinum store nicely in a safe deposit box, but a large pile of silver may require home storage? Perhaps you want to use a gold storage service located outside the U.S.?
__________________
I drive men mad
For love of me,
Easily beaten,
Never free.

PMBug 101 *** Forum Rules
benjamen is offline   Reply With Quote
Old 10-25-2012, 12:40 PM   #3
Fly on the wall
 
Join Date: Oct 2012
Location: Hudson Valley NY
Posts: 49
Liked: 11 times
Keep it paper for them. Like you said them may want to liquidate. It is easier for them to have paper assetts
silvercoinrn is offline   Reply With Quote
Old 10-25-2012, 12:48 PM   #4
Super Moderator
 
benjamen's Avatar
 
Join Date: Mar 2012
Location: Migratory
Posts: 1,620
Liked: 685 times
Originally Posted by silvercoinrn View Post:
Keep it paper for them. Like you said them may want to liquidate. It is easier for them to have paper assetts
Liquidity for physical PM is not really an issue. I can walk into any LCS and sell any of the 4 PM on the spot for a decent price. Alternatively, I can mail them off to a place like APMEX and get a better price within a week or two.

For comparison, it usually takes at least a week to sell of a stock, get your broker to cut you a check, and get that check cleared at your local bank.

BigJim likes this.
__________________
I drive men mad
For love of me,
Easily beaten,
Never free.

PMBug 101 *** Forum Rules
benjamen is offline   Reply With Quote
Old 10-25-2012, 12:59 PM   #5
Golden Cockroach
 
PMBug's Avatar
 
Join Date: Oct 2011
Location: In Scrooge McDuck's vault
Posts: 7,065
Liked: 2454 times
Why not buy a mix of paper and physical (in whatever ratio seems appropriate for your parents' needs)? Put into physical whatever they likely won't need to liquidate for the next 10 years or so.
bushi and BigJim like this.
__________________
The journey of a thousand miles begins with a single step. - Lao Tzu

Important stuff: PMBug 101 * Forum Guidelines * Support PMBug
PMBug is offline   Reply With Quote
Old 10-25-2012, 01:51 PM   #6
Yellow Jacket
 
Penn's Avatar
 
Join Date: Apr 2012
Posts: 1,566
Liked: 249 times
It is really hard to manage someone elses money- and not have them get mad.

Good luck.
PMBug, mike, ADK and 1 others like this.
Penn is offline   Reply With Quote
Old 10-25-2012, 05:15 PM   #7
Yellow Jacket
 
DCFusor's Avatar
 
Join Date: Nov 2011
Location: Floyd, Virginia
Posts: 1,682
Liked: 1233 times
Benjamin? I use TDAmeritrade and wire money to my bank. Total time is milliseconds - the speed is only limited by how fast I can make a few mouse clicks.
DCFusor is offline   Reply With Quote
Old 10-25-2012, 06:38 PM   #8
Predaceous stink bug
 
Join Date: Jun 2012
Location: Left Coast
Posts: 167
Liked: 71 times
Originally Posted by benjamen View Post:
For comparison, it usually takes at least a week to sell of a stock, get your broker to cut you a check, and get that check cleared at your local bank.
I use Wells Fargo, and sales of any stocks, ETFs and funds sweep into their checking within the day. No week delay.

Originally Posted by PMBug View Post:
Why not buy a mix of paper and physical (in whatever ratio seems appropriate for your parents' needs)? Put into physical whatever they likely won't need to liquidate for the next 10 years or so.
They have a small bit of PMs in their bank safety deposit box. They haven't looked at it in ages, and are bringing it to me next time they visit. A few Kruger Rands and a small ball of 24K gold they received as gifts when I was born.

Originally Posted by Penn View Post:
It is really hard to manage someone elses money- and not have them get mad.

Good luck.
True. Luckily my parents' and my MIL's accounts have been positive since I took over. Their expectations are so low, as long as I keep them out of the red, they're okay with my management.
superhero is offline   Reply With Quote
Old 10-25-2012, 07:35 PM   #9
Ground Beetle
 
bushi's Avatar
 
Join Date: Nov 2011
Posts: 971
Liked: 554 times
Well I don't know, maybe I have serious trust issues (probably!), but I know 100% I won't be putting ANY of my retirement money into paper assets - not until the current debt overhang is cleared to some realistic/sane size, at least. MOST certainly I won't be buying bonds & stuff like that, every contrary analyst I know about shouts at the top of their voice that bonds are in a huge bubble right now.

You seem to be willing to actively manage that portfolio - why don't usedips, to build some nice stack? I am roughly 5%/10% up on gold/silver this year, without any active management. And it is not particularly spectacular year for PMs.

My 2c
__________________
“...the issue which has swept down the centuries and will have to be fought sooner or later is the People versus the Banks.
Lord Acton
bushi is offline   Reply With Quote
Old 10-26-2012, 08:46 AM   #10
Super Moderator
 
benjamen's Avatar
 
Join Date: Mar 2012
Location: Migratory
Posts: 1,620
Liked: 685 times
Originally Posted by bushi View Post:
Well I don't know, maybe I have serious trust issues (probably!), but I know 100% I won't be putting ANY of my retirement money into paper assets - not until the current debt overhang is cleared to some realistic/sane size, at least. MOST certainly I won't be buying bonds & stuff like that, every contrary analyst I know about shouts at the top of their voice that bonds are in a huge bubble right now.

You seem to be willing to actively manage that portfolio - why don't usedips, to build some nice stack? I am roughly 5%/10% up on gold/silver this year, without any active management. And it is not particularly spectacular year for PMs.

My 2c
Bonds are one of those things that mathematically are ticking time bombs. Bond value is highly influenced by interest rates (influence grows with the duration of the bond). Basically, when interest rates drop bond prices go up and when interest rates go up bond prices go down. Since interest rates are already as low as they can possibly go, you have little chance of your bonds gaining value as interest rates drop. Your only hope is interest rates never go back up, therefore destroying the value of your bonds.
bushi likes this.
__________________
I drive men mad
For love of me,
Easily beaten,
Never free.

PMBug 101 *** Forum Rules
benjamen is offline   Reply With Quote
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
First hand account of currency collapse benjamen Fiat Ponzi 2 10-01-2012 10:21 AM
Retirement benjamen Fiat Ponzi 7 05-17-2012 03:14 PM
MF Global account liquidations might cause massive commodities selling on Friday PMBug PM Bug 16 12-18-2011 07:32 PM
MF Customer: $50M Commodity Account Gone PMBug Fiat Ponzi 6 12-04-2011 09:57 AM
CME changes initial margin requirements in response to MF Global account transfers PMBug PM Bug 16 11-08-2011 07:38 AM


All times are GMT -5. The time now is 02:16 PM.


Powered by vBulletin® from Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.6.0 PL2 ©2011, Crawlability, Inc.
Content of PMBug.com copyright © 2011 - 2019 Measuring Up. All Rights Reserved.