So my broker called me this morning ........

[Stinky The Clown]

The broker who handles my SEP-IRA. We made contributions at the end of last year and it has been sitting there as cash. He called to say he thinks it is time to invest it in something. He asked me what I wanted to invest in. I didn't answer, choosing instead to ask him the same question: What do you suggest, Mr. Guru du Bux?

Imagine my surprise. He suggested offshore investments. A long discussion followed about this fund and that .... which were hedged against the dollar and which were decoupled completely (as completely as is actually possible) from the US economy. In short, he suggested things that trade in Asian currencies or the Euro.

By the way, this is a name brand brokerage that anyone would recognize.

[acmavm]

1. It's what Warren Buffet is doing. Go for it.

.

[Stinky The Clown]

2. Actually, had he not suggested it, it is what I would have ......

....... directed him to do. I was just surprised that he suggested it in the first place. Funny thing .... his voice changed when he first suggested it ... as if I might think he was nuts.

[MidwestTransplant]

6. I don't know if I would be in emerging markets right now

SOOO volitile and could have a huge way to fall. Already down a ton in the last month or so. They ran up huge last year. Euro economies and Japan are probably better bets right now in my opinion (prices reflect negativity already). If the slightest hint of bad news (or less than insanely awesome news) comes from either China or India, that market has a way to fall. Check out EMF. You can see a chart there. It's a very good closed end Emerging Markets fund. You can see how fast it's run up and it's fall in the last month or so. Serious volitility. If you are looking a long way out though, that obviously changes your risk profile.

[Stinky The Clown]

8. Not emerging markets

He specifically suggested we stay out of that ... and I agreed with that, too.

We're going into Yen- and Euro-currencied markets.

[barb162]

3. call him back and ask him to explain why Asian and European

stuff was tanking Monday morning. Uncoupled from the US economy????

[Stinky The Clown]

10. We're taking a longer term view ... 3 to 5 years, minimum

A day or two's movements are meaningless.

[barb162]

20. I know one or two days is meaningless. I know. I think though

that we (the US and world economy) are at, shall we say, a crossroads. Oil, debt, deficit, joblessness, falling dollar, etc.

[Zynx]

16. They were closed when we tanked on Friday - needed to catch up

That happens a lot if the US has a major move on Friday.

[The Backlash Cometh]

4. My investment broker recommended a 5% fixed CD for 6 1/2 years

Time to cut him loose.

[amazona]

12. I'd grab that in a heartbeat

Just tell me where.

Most CDs can be closed with a penalty of giving up 3 months interest. You can come out ahead by locking in the high interest rate (5 percent is DAMN good for a CD at the moment) and if/when interest rates do make better CDs more attractive, you can cash out and buy another. But I think you're going to be waiting a while to beat that return.

People who were "conservative" and bought an index stock fund have seen their money go nowhere for 5 years. A GUARANTEED 5 percent return is a heck of a lot better than earning nothing. For FIVE years -- a significant percentage of your earning lifetime.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[The Backlash Cometh]

27. It's not much of a deal if 5% CD's will be available readily in two years.

[indepat]

5. Those in the know know what is coming down, yet they shrilly shill for

ruinous tax, fiscal, and economic policies like a pack of jackals.

[Squeech]

7. Commodities

Everything else is paper-- leveraged way beyond the point of sanity. Time to get back to real stuff.

Unfortunately my 401k doesn't have any way to invest in those. Either I'm in equities-- scheduled to crumble with the economy-- or bonds, which will tank when the rest of the world figures out that Smirky has no intention of ever making good on his Treasury bills.

[Stinky The Clown]

9. What about RIETs?

Real Estate Investment Trusts?

[amazona]

14. some people like them

If you're a home-owner, though, you might already have a very high percentage of your net worth tied up in real estate.

Most people like to diversify as a hedge against devastating loss. I made a decision not to use REITs in my SEP-IRA for that reason.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[MsTryska]

15. I'm not so sure abotu REITS....

many of them have been doing inrodinately well over the last 5 years or so, but wiht interest rates creeping up, i'd look for their growth to slow done some.


The foreign play is not a bad idea but I would look more at Foreign Bond markets than I would commodities.

[LSK]

21. I dont see interest creeping up, it is still below 6%

Greenspans hikes have yet to reach the mortage rates.

[MsTryska]

22. it's coming tho.

remember we have to look at the long-term.

Where will interest rates be in a year? a 1/4 point here a 1/4 point there, and looking at the aggregate a year from now, or 2 years from now and they've officially reached "high" categories.

[Dorian Gray]

25. REITS

Had their Hey-Day a couple of years ago. I have one in my portfolio, and it's done well, but I've held it for over five years. I've actually just sold off half of it in anticipation of a Real Estate correction in the next couple of years. I won't sell all of the REIT, but I won't be buying into it anymore.

My Financial Planner also suggested non-US investments as of last November, when we were going over year end information for the Foundation that I run. She seemed to believe that the US had run its course, and that the European and major Asian markets would be out-performing the US markets in the next few years. (She's from Merrill Lynch, as well.)

[amazona]

13. 90 percent of investors in commodities lose their money

That's gambling. No place for a retirement fund, which is what a SEP-IRA is.

Don't think because you are more intelligent than average, you're guaranteed to win. I'm guessing HIllary Clinton's I.Q. is higher than anyone in this discussion, certainly higher than mine, and she lost $100,000 in commodities back in the early 80s when that was real money.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[Zynx]

17. Commodities are EXTREMELY volitile

Swings of 10% or more in a week or even a single day happen all the time. Prices can double or halve themselves over a year almost as easily.

This is why people caring that oil went from $56 to $50 are idiots - that sort of move is normal for commodities.

[Squeech]

19. Yeah, but

the reason they're volatile is, they're too thinly traded. Get more investors in there, get some mutual funds in commodity baskets, and the spikes will smooth out.

(Which doesn't necessarily mean I'd be comfortable being the first one in the pool, but really, what else would I *want* to invest in? Treasury bills, right after the pResident declared them worthless?)

[MidwestTransplant]

26. If you want to buy gold you can buy GLD

It trades the gold futures market. I think there may be a way to do it with oil as well.

[amazona]

11. terrific way to lose your assets

Offshore speculation (don't call it investment when you are involved in currency speculation of necessity, which means long term 80 or 90 percent of investors will be losers) is a crazy suggestion for an SEP-IRA which is a long-term investment that absolutely has to be there when you are too old or too ill to work any more.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[Stinky The Clown]

18. It isn't currency speculation

It is a US-based mutual fund that invests in non-US companies ... the fund's been around for 28 years and has a reasonable record. Except for what it invests in (non-US, but solid companies) it is little different from any US-centric, conservative mutual fund. I'm 58 years old. My speculatin' daze is long gone! I'll take a solid 5% return that I know I'll see over the **possibility** of a 15% return that may just as easily turn to shit any day of the week.

For what its worth, my non-SEP-IRA investments (meager though they are) are with another broker who have, for their entire history, been ultra conservative contrarians. I have little tolerance for financial risk. When my ex wife and I parted ways (and bank accounts), she took her share and pulled it from this guy. She's now very sorry she did. I weathered things pretty well and even made a few bucks when everything went down the toilet. She's down to way less than half. I stayed with conservative investments and my contrarian broker ... she went high tech and speculative.

[MsTryska]

23. this post may be of soem help:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x3493170#3495094

[kerry-is-my-prez]

24. They are the only funds doing ok. Euros are hardly some exotic thing...

n/t

[Blue Moon]

28. I've got nothing against foreign investment

But you do need to realize that it contributes to our balance of trade deficit.