Hi Kent, I’m an Investment Advisor in Georgia, I can’t give individual advice without finding out about your background and investment objectives but I will make some general comments that aren’t directed to you but a general audience (sorry - legal obligation). First, the most important thing for investors to keep in mind is that especially as they near retirement they need to continually shift funds into bonds and out of volatile investments. In fact the best way to look at a portfolio is as two sections, fixed income (bonds or in some cases CD’s), and variable (I call it stocks but it includes -domestic,foreign, large/small cap, REITs, commodities/futures,etc). One (very crude) rule of thumb is to subtract your age from 120 and put the remaining percentage in stocks, and the other percentage in bonds. Example - a man 60 years old (120-60=60) 60% in stocks, 40% bonds. A 50 year old man (120-50=70) 70% stocks, 30% bonds. The current thinking among almost all reputable advisers I know is to develop an asset allocation based on your retirement goals or cash flow needs. Also it’s important to remember that almost all advisers never recommend real estate (because they don’t make money for recommending it), and many people who hold themselves out as “financial advisers” are actually brokers and paid on commission not by fees. This is an important distinction because an advisor paid on fees gets paid the same no matter what product he recommends (many brokers don’t recommend index products even though many MANY studies show that indexed products out perform 90+ percent of actively managed mutual funds), and also gets paid whether you take the advice or not (they are not going to bug or pester you to do what they recommend). The problems with many advisers is that they just use whatever software they use and never question, or worse don’t understand the assumptions that are based into their allocation software. Also almost no financial professionals understand Austrian Economics.
My personal thoughts,
Gold - seems to be a good investment, I would buy a little (perhaps 0.5% of my variable money - up to 10%) for every $10 drop in price (this is what people call “buy on the dips” but you should notice they never explain what that means or how to do it)
- When to start selling down your gold position is much harder to explain. If you ever see the New York Times, Time Magazine, or any non-financial publication declare exuberantly that “gold is the only investment” sell. It probably won’t be the top, it will definitely be close.
Real Estate - a great investment in my opinion, but it take a lot of time to learn what you need to know to be a good real estate investor, the returns will probably be higher than you can get giving your money to someone else to invest for you. It will also require much more of your time, very much like having another job. Many financially independent people made their fortunes in real estate because if you take the time to learn how to do it right you just do the same things over and over and get rich.
Start your own business- an often overlooked way of making money is to start a business doing something that you love to do. The key is to start small and always keep your cash flow positive, but this is my favorite way because you get to do something you love to do and make money at it. I would say a big don’t is to go out and buy some franchise that you become a slave to. If you take this route first you MUST READ “The E-Myth Revisited” by Michael Gerber.
-Good luck, Rob