In 1999 I knew beyond a shadow of a doubt that the tech bubble had to burst soon in the stock market. I did not sell our mutual funds because I kept getting told "you can't time the market."
What did I know? I was a naif. It's just that I read so much and follow common sense. I knew all those internet companies could never be monetized because they didn't make anything or provide an indispensable service. Except Amazon, which was so deeply in the red and far from paying dividends (have they ever paid dividends?) that I couldn't put my money in that. (My mistake. But I hate gambling on single companies. I preferred mutual funds and spreading the risk.)
So my wife and I took a bath in 2000.
New millennium, new broker, but the same "buy and hold" crap.
In the Fall of 2007, I saw what was going to happen. I knew the housing bubble had to burst. I called my broker and pleaded with him to sell. "Buy and hold! Buy and hold," he insisted, and what did I know? "You can't time the market."
Then boom! 4th quarter and the market fell. In January, I pleaded again, "Sell it all!"
"You can't time the market."
I failed to insist. (Later on, we heard from other clients of this man that he ignored their sell orders.)
Come August or September in 2008, the entire bottom fell out of the market.
We lost 50-60% of all the equity we'd built up in the six or so go-go years.
Time to take matters into my own hands. No more Mr. Nice Guy. But right now, like most people, we're just treading water. Yes, the market came back from what? 5000 then to 13,000 but on what? Phony money. Small investors like me and insider corporate ones avoid equities like the plague. Volume is way down despite the 13,000 Dow.
Every time the DOW goes up, so does my gold. Why? Because the banks have been buying with 0.0% interest Fed money into the stock market. Inflated money has inflated the equity market even though companies aren't really selling and earning more (except Apple).
I'm going to put more money into gold and silver, but frankly, I'm terrified. I've learned that gold is not really an investment. Gold and silver are commodities that hold value. They keep your money protected from inflation, but they aren't necessarily growth dividends.
So what I'm afraid of is a coming deflationary spiral. Are we not already seeing wages (except for gov't workers) lowering? Are we not seeing fewer goods being sold? And services hired? And fuel costs cutting into surplus income and increasing the cost of everything?
Even if Romney is elected and the energy companies turned loose, if spending isn't deeply curtailed and taxes cut, how will people afford being spendthrifts again?
Energy production will boost jobs (and they generally pay well), but will it be that great a rising tide? I just don't know.
It can't save California. We have one of the largest gas and oil beds in the country in the Bakersfield region (it's like the Bakken shale region) and off-shore reserves that are huge, but the powers that be will never let us tap them. It could pay for all our debts, but will never be just like New York has prevented oil and gas mining to develop in a state that's broke and losing population by the thousands every year.
And the saints go marchin' in.