What the hell should I do now?

Discussion in 'Professional Trading' started by flier6, Feb 12, 2006.

  1. flier6


    Hey all,

    I need some advice. I've just sold my house in Orange County and am wondering what to do with the cash. I have about $300,000 from the house and $200,000 in my 401k. Right now I have the entire $500,000 in the money market because I'm bearish on the mkt.

    I've also been reading a lot of Peter Schiff's writings and am starting to become very bearish on the dollar. I'm an airline pilot for a bankrupt carrier and have been HAMMERED from every direction as far as my net worth.

    I feel a bit foolish getting on here and whining about "only" having a 1/2 million. I know I'm very lucky to have even that. But I also know that it isn't enough to retire on. I'm still only 45 so I have time to save more and let this money grow, but I don't feel like the mkt is going anywhere anytime soon.

    I thought I'd seek help here because I know there are some DAMN smart people on this board. If you have time, I'd like your thoughts on the following:

    1. There is no doubt in my mind that the real estate market is about to absolutely MELT DOWN here in Orange County (probably elsewhere too). In fact, it's already started. But is it logical to be bearish on the stock mkt right now as well? Should I just dump all the $ in the S&P, max out my 401k each year and stop worrying about it?

    2. Is it logical to be concerned about the dollar resuming its 4 year plunge? If so, what should I do about it?

    3. I like Peter Schiff's strategy at EuroPacific.net (foreign stocks, mostly utilities and materials companies) but they charge 3% to tell you where to put your money. I thought about giving them maybe $50,000 to manage and then managing the rest of my $ myself in accordance with their strategies. 3% seems outrageous to me for a stock brokerage.

    Anyway, I think you can see my "conundrum." I feel like a dumbass for not knowing more about this stuff by now but over the years, the guys I knew that seemed to do the best were the ones who kept it simple and just rode the S&P up so I didn't get anymore "sophisticated" than that.

    Thanks a lot for any insight you can offer.
  2. nkhoi

    nkhoi Moderator

    with recent 'cartoon' protest, think again, if you still down on dollar, then buy Brazil not Euro.
  3. NTB


    You should invest it in a Fund of Hedge Funds and get your 10% or so per year. Compound the investment until you absolutely need the income to live. At that point, hopefully, you will have more than $1 Million invested and you can withdraw the annual income annually. Managing it yourself should not be an option. If you liked the stock market higher, I'd suggest a passive index fund. However, given your outlook on stocks, real estate and the dollar, a Fund of Hedge Funds is the right way to go in my opinion.
  4. balda


  5. lundy


    Check out Market Compass. They manage money, as well as offer classes in options for the PSX.
  6. Contact Mr Randomness. lol
  7. flier6


    Thanks for the responses.

    I didn't mean to start this thread in "Career Trader" so I've moved it over to "Economics."
  8. ask for advice on anonymous message board and you'll grow rich. [size=extralarge] NOT![/size]

    you might as well start tearing up the 100$ bills and flush them down the toilet right now.

  9. patch227


    IMHO as soon as you are damn sure about something prepare to have your ass handed to you.

    I would plan for anything happening and be ready for it.

    This may sound a bit esoteric but i believe that anything can happen and usually does
  10. You should create a diversified porfolio for yourself or if this is too hard hire someone to do it for you. You can adjust the allocations to different sectors according to your beliefs, at this point you would be less heavily wieghted in US stocks. You don't have a high enough net worth to invest in a fund of funds like a poster suggested and it would be a bad idea to invest all your money with a single FOF anyway.

    I would attempt to get as much money in a 401k plan or some other qualified plan as possible than make investments.

    Your porfolio could look like 25% in US equities, 10% in Jap equities, 10% in European equities, 5% in Emerging markets (Brazil, India and China are three I like in that order) 5% in gold, 20% in US treasuries, 15% in foriegn debt (Stay away from Japan), and 10% in commercial debt/real estate/individual stock picks/money market or whatever else you can think of.

    It is pretty easier to get good diversification of all these markets using index funds, check out ishares, GLD. You can use these to weight your self in certain sectors within US equities to reflect your beliefs, like say you think dollar going lower but oil going to the moon, you should be biased towards the energy sector in the US equity portion of your portfolio (maybe 40% of the 25% in an energy sector ETF). I would make long-term investements 3-5 years and maybe think about reweighting every year or so as your beliefs change. I wouldn't suggest trying to tweak your portfolio constantly to try to catch the hottest market or stock, or just do it with the 10% you have on the side.

    The % in foriegn investments amounts to a bet againist the dollar, because as the exchange rate changes so will the value of your investment no matter what the underlying instrument is doing.

    Managed futures are a great portfolio diversifer, although these are usually hedge funds, there are some that allow for smaller investors. I think if you open an account with Merrill you can invest small amounts with JWH. Think about 10% - 40% in MFs and adjust your porfolio accordingly.

    Good Luck
    #10     Feb 13, 2006