Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on investing in antique musical instruments.
Precious Metals:
How Palladium’s Rally is Setting Platinum Up for a Comeback
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Next, at Seeking Alpha: Top Five Silver Stocks For 2018
Stocks:
I noticed that the Dow Jones Industrial Average (DJIA) is now back above 25,000. But please, dear readers, do not be lulled into thinking that U.S. stocks are back in a primary bull market. The fact is that P/E ratios are still out of whack. Most publicly-traded stocks are still overvalued, and interest rates will increase in 2018. So a bear market awaits. If you want to continue to invest in stocks, fine. But just do so with both eyes open. I recommend that you take personal responsibility and engage in two crucial steps for your protection: 1.) Hedge your portfolio with a 20% allocation in precious metals, particularly physical silver. And 2.) Set up automated stop loss orders for all or your individual shares, ETFs, and mutual funds. You will sleep better, if you do.
Forex:
Why Recent Lows Are Crucial for Greenback?
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Canadian bankers ask: How Long Can U.S. Dollar Weakness Persist?
Economy and Finance:
Reuters: China conglomerates aim for reset in tighter credit environment
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The New York Times reports: Fed Officials Say Economy Is Ready for Higher Rates
Taxes:
Moving on to this at The WSJ: When ‘Married, Filing Separately’ Lowers Your Tax Bill. The article’s sub-head: New 20% deduction for pass-through businesses is among reasons couples may want to file separately
Tangibles Investing (Antique Musical Instruments):
One obscure niche area of investing is rare and antique musical instruments. If you a watchful on eBay, you can sometime find bargains. But garage sales, yard sales, and estate sales are your best opportunity. An important note: Many antique instruments are fragile. A broken instrument is usually nothing more than an interesting “wall hanger” with very limited resale value. So unless you are a true expert, then I’d recommend sticking to buying only brass instruments. If found complete, those can usually be restored fairly easily, unless they are badly dented. One item I’m looking for: A valve trombone.
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. So please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
Mutual funds often don’t allow “stop loss” orders. They get evaluated after the close of trading, and the price is set then. You can’t just trade it because the price reaches some point. At best you can decide to sell it at the close of the next trading day.
Well I tried the silver and gold hedge years ago. Did nothing but lose money.
I have some funds that have gold , but nowhere near 20%. I have seen no advisor that recommends such a high percentage.
You can use tradestops.com to put stop/loss orders on mutual funds. Those who own stocks and are wondering when to sell can use the following ideas:
1. set stop/loss orders on every stock, bond, or fund you own. If one or more close at or below your stop point, sell the next day.
2. Watch the gap between the 10 year U.S. Treasury bond and the two year Treasury. If it hits zero or goes negative (an “inverted yield curve”) a significant downturn will probably occur in the next 12-18 months. You can gradually narrow your stops (but not too much, there were 5 10% drops in 1999’s dot com bubble market).
3. Sell your consumer staples positions to lock in profits and raise cash — a bubble market won’t affect these all that much anyway.
I personally gave up on metals when silver crashed back in what i think was 2013. Lost a ton and became disillusioned with the entire thing. So now I just hedge into tangibles that I can actually use.
I own silver. I paid too much. So what. I still haven’t lost a dime. I’m not selling anytime soon, if ever. I bought when it was $16 an ounce, I also bought when it was $30 an ounce. It doesn’t matter. I still haven’t lost a dime. I haven’t lost because I haven’t sold. It’s an investment, a long term investment. You keep it until you need it, hope you never need it.
And as has been said a thousand times, own physical in your possession, not paper.
As a teletype operator for a brokerage firm in the late 60s and in and out of the stock market forever since then I have an interesting perspective on setting stop and stop limit orders. They are fine when the markets are calm and relatively normal. In a fast market they can be a real problem.
What are you going to do when the market opens up 200-500 points lower right at the start? Are you in or out? After the 25% drop in ’87 I can’t tell you the number of folks who didn’t know where they stood because reports for trades often didn’t come in till the next day. It was just as bad for mutual funds because they mark to market after the close so you can’t get out. They were forced by their rules to sell into a falling market which only made things worse.
And for those who trade online it will be just as bad or worse. Look what happened to the market just two weeks ago. Fast markets are something that can happen out of the blue. Sure, they’ll stop the markets after a certain percentage drop nowadays but are you going to be strong enough to hold off panicking when you just know many others are going to dump their stocks as soon as the market reopens? So, that’s the problem with stop and stop limit orders and I trade as follows.
I don’t trade online. Not good enough with the computer to feel comfortable doing it. So I pick up the phone and will personally place my order and it’s generally a market order and I’ll get the confirmation of a “fill” within about 5-10 seconds. A limit order may be placed only on a “day” basis (meaning it will expire at the end of the day) and I generally do that when the stock doesn’t have a lot of volume. So, I can sleep at night and not worry. I pay $44.95 for the privilege of doing it the way I feel more comfortable. YMMV.
If something awful happens and the markets in a free fall I’ll pick up the phone (and wait forever) and place a market order and probably call back later to see what price I got. And yes, I can see a situation where the market may have been closed before my order was filled. I can assure you it will be panic time for the folks who this online.
Don’t get me started on Bitcoin. It’s the wild west out there and I can’t forget the story I read about the guy who placed his order and didn’t know for 3 days whether he had got it or not and at what price.
And I see nothing wrong with having 20% of your investments in gold coins. You can’t eat them so I consider them for rebuilding after TEOTWAWKI. And for anything in-between, actually. I assure you that the people who suffered greatly during the recession of 2009 would have loved to have had their stash of gold coins to convert into dollars and maybe have even helped them to hold on till things turned around. Don’t knock real money.
One thought to add to the comments about precious metals…. counter party risk.
If you don’t hold it, you don’t own it.
In your hand(s), in the safe, bank vault, under your mattress, wherever you feel most comfortable. But don’t confuse an electronic statement or piece of paper with “ownership”.
Precious metals
Never in the bank. Just my 2c, for whatever that’s worth nowadays.
The trumpet on the front page looks like the one I learned on in the 1950s.
That was my second horn. The first was my grandfather’s cornet. I still have the mouthpiece from it.
Instruments don’t have to be antiques to be good investments.
I bought a Yamaha YAS82Z (“Custom Z” alto sax) brand new in 2006 for $2000. The Custom Z is the top of the line saxophone made by Yamaha.
Today it’s worth about $3500 – used.
Generally speaking, almost any top of the line musical instrument will appreciate in value and is highly sought after.
Don’t forget electrical instruments. Old electric guitars and bass guitars as well as old amplifiers especially old tube amplifiers have really great value as long as they are in working condition. It still pays to know what you are looking at and as long as it is a premium brand name.