congratulations, the people buying gold now are subscribing to the winning strategy of buy high, sell low! Right now, the market is expecting continuous dollar declines, but once the funds rate is held steady, these expectations will shatter, taking commodity prices with them.

Good move Daniel. I just cashed out all my retirement accounts, converted them to gold, and buried it all in the back yard.

Come on, asset allocation is the best strategy for the majority of retail investors. Market timing may work for some (I do that myself, and often feel annoyed by my bank’s attempts to direct me to their model). However, one needs both aptitude and genuine interest in the market moves to stand a chance in that game. For an expert, it would be irresponsible to recommend anything but asset allocation, unless talking to a sophisticated investor; and the latter does not need generic advice in the first place.

What I think is “ironic” here,is that if any of these people were TRULY watching the market(S) (notice….the “s” is capitalized, because you can’t simply look at one piece of the puzzle) SOMEONE would have mentioned gold (since it has more than tripled in the last few years) and/or other precious metals! I just moved my IRA, without any penalties, into a gold IRA with Swiss America, and I actually bought REAL METAL not ETF’s which are still tied to the stock market….. anyway I think all of these financial geniuses (lol) should take a look at the dollar and realize exactly how dependent the stock market is upon the dollars SURVIVAL (If you wonder what I mean… look up “North American Union” on youtube….)

I have to agree with other comments here; is good to sell the stock and sit in money market funds or, and this is perfectly legal, put your IRA money in a bank account. Mutual funds generate great fee income for investment managers (as do stocks you bought but are held in a brokerage). Over time you can see up to 60% of your gains eaten up in fees. Be careful where you invest and don’t believe in tides that lift all boats. That statement is from the Jack Kemps and Ronald Reagans of the world and we are still paying the national debt that came with that lunacy of thought.

How can the “expert” not know about taking substantial equal payments of your IRA prior to age 59 1/2? Any 22 year old kid who has passed a series 6 knows this basic information. Seems about right for CNN’s level of expertise..

this answer man is an obvious mouth piece for the coroperate government.if you can read any daily business papers take what you have left and run like hell. put it in something you can touch and feel.look up meaning of fiat money is what you own.

Wall Street is basically Las Vegas in a business suit.

This would be a good time to consider a self-directed IRA and diversifying 30-50% of his portfolio into real estate in one of the top 1% markets in the US.

The top 1% have been practically immune to the real estate slowdown. $50,000 can buy over $400,000 in real estate. If the property values double in 8 years, which could easily happen, the investor would have an extra $400,000 to retire on, which could be rolled into cash-flow properties yielding $120,000 a year or more in passive income - without withdrawing from the principal. Worst case scenario, the investor could gain only $200,000 or so for his $50,000 investment, but that is highly unlikely.

In addition, the investor would be getting an extra $25,000 in tax deductions over and above the tax benefits of an IRA.

Tenants would be making the mortgage payments.

The advantages are so obvious, it is a mystery why so few investors even take the time to get informed about it.

From 1997-2007, savvy real estate investors earned 700% to over 1,000% on their money, while S&P investors earned 88%.

The investor should contact a professional real estate financial advisor.

I have to agree with JC, the financial media…including planners and asset managers have convinced the average investor that being as much as 80% invested in U.S. equities is a SURE THING because of past perfomrance. Like their real estate cousins…the line that you “can’t lose” in the long run is simply a guess that as we can see…isn’t always true. What people today fail to realize is that the markets are much more global and diversified than they were 10, 20, 30 years ago and investors MUST consider foreign equity, currency, and debt, as well as hard and soft commodities and other alternative investments here in the U.S. more carefully. As an example…U.S. financial preferreds are paying over 7% right now and their are some great convertible preferreds as well…who’s touting them now to the average investor? Anyone? From here on out the average investor is also going to have to take some more risk and actually try to do some market timing as well. Look at trend lines, bollinger bands, moving averages…etc. The old line about just holding on until the cows come home is deadly in a sideways market. Timing the market now is essential to getting a decent return, and unfortunately that means if you want a better return…your gonna have to up the risk a little. Otherwise for the next few years…you may make nothing at all.

What if there are factors such as this: The Middle East and all big Oil continues to do the controlled bleed on the world economies by continuously raising oil prices to the verge of recession in all large markets. Most people can’t ever plan on prospering and therefore the US economy and other countries can never prosper. Right now, a large percent of Americans are gas poor. That number is on a continuous rise. As a result, I don’t see a future for the stock market. I took 90% on my money out of the market and am settling on the 3-6% returns of CD’s, bonds and paying off debt. What I left in the market I wish was all in Exxon stock.

I just pulled all my money and and buried it in my back yard where it will be safe.

I saw the downturn coming and transferred out of stocks into money markets. “Experts” are doing us all a disservice by cuddling up with Wall Street and all this nonsense about a balanced portfolio. At best, the stock market will be moving sideways over the next two quarters. And we may be heading for a Japan-style stagnant period where there will be nowhere for money to make money (and this might last for years). The big news is that the American consumer is all tapped out - so all this talk of a rebound is a lot of hot air.

Thank G-D ALMIGHTY for Certificate of Deposit Accounts. I’ve never Lost a DIME investing solely in Certificate of Deposit Accounts that are FDIC insured up to $100K. And certainly, while the rates of return are somewhat dismal, at least I don’t have to deal with the Las Vegas, NV Gambling Casino effect of the Stock Market. Playing the Stock Market is exactly like shooting craps or playing the roulette wheel in a Las Vegas, NV Casino. And as for the Financial Planning Experts, well in my most humble opinion, they’re nothing more than a bunch of BLOOD SUCKERS. Look people, I’ve amassed a Net Worth of Over $500K (to include a condo that I currently own + $200K tax-deferred savings and another $200K in taxable savings), and I did it ALL BY SOLELY INVESTING IN CD’s. You just can’t beat it. And guess what? I am only 47-Years Old. My Net Worth should far surpass $1 Million by the time I’m ready to retire. So Keep GAMBLING with your stock and bond portfolio’s people. I would rather play the ‘horse races’ than the stock market.

I am retired and on a fixed income and my scenario is different. (Keen sense of the obvious.. eh?) I am paying for a “managed” portfolio and watching it loose value. It is very hard to hold and waitunder these conditions. The only advice my “financial advisor” recommends is to hold on. One would think a portfolio manager would take some kind of action during these times.. not my team. What is your recommendation?

@JC in Chicago: Are you talking about the Dow Jones Industrial Average? Because “Dow Jones” doesn’t actually have any stocks. All they do is publish lists of stocks that are intended to represent segments of the market. the Dow Jones Industrial Average is a weighted average of the stock prices of 30 large companies that are widely held. I would not exactly call that a diversified list of stocks. The S&P 500 on the other hand is a list of 500 companies and is highly diversified. the Wilshire 5000 index covers just about every company in the stock market. Investing in a properly diversified portfolio of stock funds (which the author was recommending) is not the same thing as buying shares of the 20 companies on the DJI. It is not a foolproof approach, but neither is it as insane as you seem to think. On the whole, a broadly diverse portfolio of stocks will appreciate much faster than a comparable portfolio of Bonds. Striking the proper balance between the two is the key to both stability and returns that beat inflation.

@B. Thompson in Alabama:
That’s wonderful, but… did you consider inflation in your calculation? Inflation tends to average about 3% per year, in a good year. Last time I checked, most Money Market Accounts were paying about 2.5%. What does that mean? It means that putting all your eggs in the Money Market basket is a half step above stuffing your mattress. MMAs are fine for short term reserves where preservation of capital is key, but they are extremely detrimental in the long term. Think about it this way: You’re getting those solid +2.5% returns when everyone else is down 10% or 20% this year, but when the market turns around or even stabilizes, they’ll be earning +10% or +20% per year, and you’ll still be getting that 2.5% If you don’t understand the value of compound interest, here’s the short version: at an average return of 2.5% it’s going to take 30 years or more for your money to double even once. At an average return of 10%, you money will have doubled 4 times in that same time period. (i.e. you will have 16 times as much as you started with.) What it boils down to is this: if you’re getting ready to retire, then having a good chunk in MMAs is fine. If you plan on living for 30 years in retirement, having all your money in MMAs will leave you high and dry. Inflation will eat you alive. On the other hand, if you’re just starting out and you have 30 years to save, you’re going to have to save 16 times as much money to your retirement account as you would have if you had chosen a more growth oriented mix of assets.

Wow… the weirdos are coming out of the woodwork on this one. Walter is correct, the email presented a false dichotomy.

But regarding some of the reader comments about stocks, I think they are hyperventilating. We aren’t even below DOW 12000. And the guy who tried to cherry-pick one bad 15 year period in stocks was pathetic. Talk about having an agenda.

For me, I’ll continue to plow my money into individual large-cap US companies that I know to be solid and reputable (IBM, XOM, PG, WMT). The S&P 500 index is also my friend. I’m 30 years old and have a 100 k to work with so far. The doomsday scenario act is just not very impressive to me.

JC in Chicago,
You conveniently take a snapshot of the market where stocks performed poorly over a VERY SPECIFIC timeframe. Your crystal ball seems to be looking back in time only. Are you a proponent of market timing or do you think that avoiding the stock market altogether is a successful strategy? I’d love to hear your ideal portfolio and how it can outperform diversified long-term investment in the stock market. Obviously you’re on to something here!

JC - Asset allocation is a lazy man’s way of investing? Sure it might not take a lot of effort (who really wants to pour over worksheets trying to pick the best stock!?) but I’m sure the people in 2000 though who had a suitable AA were grateful they hadn’t picked “hot stocks”. Also when you talk about shifting money around - Walter is suggesting he move it ONCE to an appropriate AA, and then rebalance periodically(I’m assuming).

Nicole - In this situation, the annuity would have to be within the IRA, as he couldn’t transfer it out without penalties. Having a tax-deferred vehicle (Annuity) being held within another tax-deferred vehicle (IRA) doesn’t make sense.
There are drawbacks to an annuity - “never lose money on it”, only if you buy the rider associated with this which will increase your fees and decrease your rate of return.

I happen to agree with your advice Walter. If Lloyd is just freaking out watching his account drop and watching too much depressing news (sorry CNN - your website is the worst for titles!), then proper AA is suitable. If Lloyd needs the income now as he’s retired, then he should look into a 72t option to minimize the penalties.

Go Walter.

BTW - for all you Dave Ramsey fans, I’m Debt free and STILL loving it!!! Window stickers all OVER my car!!!

What about annuities? Indexed annuities to be specific (as long as there are no fees and no outrageous surrender charges). You can get the benefits of a stockmarket year where there are massive gains, but can never lose any money on it…it’s a perfect retirement income vehicle!

I am tired of financial planning “experts” giving out the bad advice that investing a large part of a retirement portfolio in stocks is always appropriate. The argument that “shifting your money around every time the market soars or dives” is a bad idea completely ignores the fact that there are long-term trends in the stock market. If you had invested in the Dow-Jones stocks around 1968 and held on for about 15 years, your return on that investment would have been ZERO! Actually, computing in the high inflation we had during the 70’s and early 80’s, return on stocks would have paid pack FAR LESS THAN ZERO! Common stock CAN be a good investment, and it can also be a VERY POOR investment. Advice such as that given here is just a lazy man’s way of “managing” investments.

My IRA and 401K are sitting safely in money market funds - have been there well before the stock and credit crash. May be earning smaller returns but I’m not losing money like the people who left their money in the stock and bond market.

Walter forgot one option - that is to begin to take equal distributions over 5-years which avoids the tax penalty.

While the 57 year old retiree is waiting around for his IRA value to recover, assuming he has some extra cash and the rollover is in a Traditional IRA, now might be a good time to convert a portion to a Roth IRA. He will be paying taxes on a lower value and will enjoy tax free growth once the market recovers.