Paper vs physical for retirement account

superhero

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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.
 

benjamen

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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.?
 

benjamen

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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.

$.02
 

pmbug

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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. $.02
 

Penn

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It is really hard to manage someone elses money- and not have them get mad.

Good luck.
 

DCFusor

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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.
 

superhero

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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.

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. $.02
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.

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.
 

bushi

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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
 

benjamen

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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.
 
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