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Old 05-04-2014, 07:58 PM   #21
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I received some six and seven figure lump sums each year starting in 2010 through 2013. I decided to DCA them into the market. If I had just lump summed them all when received each year, it would have been a net gain of about 300-500k. A tough lesson to learn.

If I ever have this opportunity again I will invest the whole lump sum immediately and then buy some put options about 10% under the market price to protect me from a sudden disaster. That will be real cheap insurance and piece of mind.
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Old 05-05-2014, 08:33 AM   #22
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It's always a tough call. I was always really glad I chose to DCA at the start of 2000, and that I chose 2 years as my time frame. The late 1999 extreme market metrics made me extend the time frame from one year to two (as well as avoid lump sum in the first place). I was switching from a single (employers) stock to a broadly diversified AA.

It actually took three years for the market to bottom and start to turn around. I kept stretching out my DCA window - my final installment was in Oct 2002.

I found that quarterly was a good interval. Started out monthly, but quarterly was easier.

It all worked out - but dang!
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Old 05-05-2014, 09:56 AM   #23
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I'd rather be sitting on a lot of Au vs. a lot of cash. Cash is variable. Au is fixed. An ounce is an oz.
No way for me.

AU is fixed? An ounce is an ounce but what you can buy with an ounce varies greatly. How has it worked out for you the last couple years?

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Old 05-05-2014, 11:01 AM   #24
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No way for me.

AU is fixed? An ounce is an ounce but what you can buy with an ounce varies greatly. How has it worked out for you the last couple years?
Great point, pb. Since gold is down so much, now must be a good time to buy.
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Old 05-05-2014, 04:17 PM   #25
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No way for me.

AU is fixed? An ounce is an ounce but what you can buy with an ounce varies greatly. How has it worked out for you the last couple years?

What you can buy with cash varies also. Ever look at stock & home prices over time? Give me an ounce and $1300 & let's see what each buys in 10 years. Hint: Au is 400%+ in dollars since 2000.
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Old 05-05-2014, 04:24 PM   #26
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I'd rather be sitting on a lot of Au vs. a lot of cash. Cash is variable. Au is fixed. An ounce is an oz.
Cash is a lot softer on the buttocks.
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Old 05-05-2014, 05:00 PM   #27
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What you can buy with cash varies also. Ever look at stock & home prices over time? Give me an ounce and $1300 & let's see what each buys in 10 years. Hint: Au is 400%+ in dollars since 2000.

The fun thing about this debate is whoever uses the keyboard last is probably the winner. If my math is correct Gold is up about 65% since early 1980. I think the lowly 1 year CD over the past 34 years has that beat if both were bought then and held until today. But I am just having fun and have no idea if AU is a great investment today is not.


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Old 05-05-2014, 05:04 PM   #28
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But the value of that ounce is certainly variable...
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Old 05-06-2014, 08:21 AM   #29
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The fun thing about this debate is whoever uses the keyboard last is probably the winner. If my math is correct Gold is up about 65% since early 1980. I think the lowly 1 year CD over the past 34 years has that beat if both were bought then and held until today. But I am just having fun and have no idea if AU is a great investment today is not.


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I'm not talking of Au as an investment. I'm talking of it as an alternative to holding cash. Clearly +65% to cash since 1980 it's known which is better to have held. A CD isn't holding cash.
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Old 05-06-2014, 08:57 AM   #30
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I'm not talking of Au as an investment. I'm talking of it as an alternative to holding cash. Clearly +65% to cash since 1980 it's known which is better to have held. A CD isn't holding cash.

I see what you are comparing to now. It is definitely a strict comparison as most people wouldn't choose between buying gold and just throwing their money in a safe for 35 years. But if I could go back in time.... My only gold investment was 1993 when my daughter was born I bought her 4 American Eagles.. They were around $300 a piece. That would have worked out well for me if I had bought more!


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Old 05-06-2014, 09:03 AM   #31
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The fun thing about this debate is whoever uses the keyboard last is probably the winner. If my math is correct Gold is up about 65% since early 1980. I think the lowly 1 year CD over the past 34 years has that beat if both were bought then and held until today. But I am just having fun and have no idea if AU is a great investment today is not.


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Well, if it goes sour as an investment, you could always have it made into jewelry.
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Old 05-06-2014, 11:37 AM   #32
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I'm not talking of Au as an investment. I'm talking of it as an alternative to holding cash. Clearly +65% to cash since 1980 it's known which is better to have held. A CD isn't holding cash.
You have to be quite selective in your holding period to make gold a sensible alternative to cash, especially in a thread such as this, which is talking about relatively short holding periods. The only time in my life that I've caught gold fever was in the bull market around 1980. I bought some gold in the $600 per ounce price range and still own it. So I've made a profit over the entire life of the investment, but I was looking at outright losses for the first couple of decades that I owned it. And that's not even taking into consideration the opportunity cost of not having that money invested in stocks during the greatest bull market in history.

So pretending that gold is somehow not really an investment, or that holding it is a safe alternative to cash just doesn't match the facts. If OP puts his money into gold while he's out of the market, he may eventually sell at either a profit or a loss, depending on how well gold does while he's holding it.
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Old 05-06-2014, 03:55 PM   #33
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Based on this recent post of yours, it appears that your 401k was closed out on April 9. If so, you are in a fairly good position to do a lump sum investment in your IRA. Stocks are almost completely flat since April 9, so you can reestablish your 401k stock allocation in your IRA with a reasonable expectation of neither gaining nor losing much by being out of the market for several weeks.

In my view this is the right way to go, even though you admittedly may get a lower price by waiting. If you use the transfer of funds from the 401k to the IRA as an excuse to remain out of the market for the time being, then you really are converting a straightforward rollover into an exercise in market timing.

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Doing the rollover is not IMHO a good reason to market time. If the asset allocation in your 401K was what you wanted, your IRA should look similar by now.
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Old 05-06-2014, 04:19 PM   #34
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You have to be quite selective in your holding period to make gold a sensible alternative to cash, especially in a thread such as this, which is talking about relatively short holding periods.....

So pretending that gold is somehow not really an investment, or that holding it is a safe alternative to cash just doesn't match the facts. If OP puts his money into gold while he's out of the market, he may eventually sell at either a profit or a loss, depending on how well gold does while he's holding it.
I guess I look at it in reverse: The ounce is an ounce forever - as is an acre of land or a diamond; i.e., a hard assets. What varies all over the map is the value of a dollar, but continued, government-sponsored inflation makes holding it as cash a long-term loser.

If instead of buying gold at $600 you'd kept the cash, you could $700 ahead today; i.e., you cash is down over 50%.

No idea if in the short run a dollar will go up or down, but the Au will be there for you.
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Old 05-06-2014, 04:28 PM   #35
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I guess I look at it in reverse: The ounce is an ounce forever - as is an acre of land or a diamond; i.e., a hard assets. What varies all over the map is the value of a dollar, but continued, government-sponsored inflation makes holding it as cash a long-term loser.

If instead of buying gold at $600 you'd kept the cash, you could $700 ahead today; i.e., you cash is down over 50%.

No idea if in the short run a dollar will go up or down, but the Au will be there for you.
Not to hijack this thread with a debate on the merits of gold, but it's hard for me to see how even the most devoted of gold bugs could make a reasonable case that gold has been anything but a disastrously bad investment over the past 34 years. The only way it comes even close to cash, for example, is if you had decided to hide your cash under your mattress for almost three and a half decades. For much of that time period interest rates were high and you could have gotten high single digit or even low double digit yields in money market accounts.

Since 2000, of course, the story is different. Cash no longer generates inflation beating yields and gold has been the clear winner as an investment. But this is all dependent on picking the holding period. Will the future look more like 1980-2000 or 2000-2014? Only time will tell.
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Old 05-06-2014, 05:04 PM   #36
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I received some six and seven figure lump sums each year starting in 2010 through 2013. I decided to DCA them into the market. If I had just lump summed them all when received each year, it would have been a net gain of about 300-500k. A tough lesson to learn.
I wouldn't mind learning (or being given a chance to) that lesson.
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