Global markets, your investment thoughts
 

A large portion of the US government's debt, approximately $9.2 trillion, will mature in the first half of 2025 with August being the key month and refinancing probably at a higher interest rate. Treasuries demand is low. Gold and other scarce assets are very high if not record high as investors eye uncertainty. BRICS countries are also snapping up metals like gold perhaps seeing sustained weakness in the dollar.

Sorry if redundant news but frames my question; what is your strategy?

(Serious and thoughtful replies if you don’t mind please.).

40 percent stocks, 40 percent bonds, 20 percent cash. All in no load index mutual funds. If you are asking if I will buy gold, the answer is no. Never have, never will.

Thank you retiredguy. Gold is risky. I’m not recommending anything, just listening for ideas. That and this forum is potentially interesting but very quiet.

Hopefully this will push or govt into bringing budget into balance even a surplus to being bringing down the debt.

We can HOPE. More cuts, More reduction in government belly buttons, More reduction in fraud.

I assume (I kno, I kno), the upcoming refinance will incentivize the Fed to reduce rates going into the sales.

:popcorn::popcorn:

FYI.

Average interest rate on Federal Debt is ~3.6%

Which doesn't sound bad, but that is DOUBLE was it was five years ago.

Inflation during the last four years significantly impacted our debt costs.......as well as "eggs".

:mornincoffee:

When talk started about European and other global markets looking like they might outperform US markets a few months ago I put my toe in the water and bought a little EUDG, IQDG and VYMI to see what would happen. They are up about 30%, 25% and 9% respectively from my purchase prices. With the Russia-Ukraine war going on at the Eastern side of Europe and many European countries starting to spend far more on their own defense forces as well as aid Ukraine I cannot see why some folks see the near future of the European economy as rosy yet big money is placing bets on it.

Ditch the mutual funds for low cost ETF'S.

Pretty much the same thing. Six of one; half a dozen of the other.

Impossible to do with the built-in capital gains taxes. But, with Vanguard, there really isn't much difference between their Admiral Index mutual funds and their ETFs. The expense ratios are so small that the cost difference is negligible.

Difficult to cut with cooling economy & inflation. :icon_hungry:

"Many Vanguard index funds are eligible to convert to ETFs as Vanguard has a unique share class structure that allows this process to occur without taxes if it is completed while you hold the securities at Vanguard."

Click here...

As always, check with Vanguard for the latest info.

Thanks, I didn't know that you can make the switch tax free.

I compared the Vanguard S&P 500 mutual fund with the ETF. The expense ratio for the fund is 0.04% as compared with 0.03% for the ETF, which would save $10 per year in fees per $100,000. The total return is 15.9 percent annually over 5 years for both the fund and the ETF. So, as I said, the difference is negligible. This may be different for other investment companies, but not for Vanguard. Personally, I don't care that you can trade ETFs hourly, but you can only trade fund shares daily. Some people seem to care about this.

Amen… 1970 is long gone. Gold hasn’t nearly improved as well as stocks. We have about 20 % in cash and CDs of various banks. The stocks keep rolling it in.

Now we have a trade deal with China brilliantly crafted to our advantage. I say steady as she goes and enjoy your life.

The gold market has been saying otherwise for many years and increasingly so in the last couple years. It seems the market doesn't like the fact that our national debt increases exponentially every year and the interest we pay on that massive mountain of debt is suffocating our national finances.

It all depends on your gold buy price, of course, and the probabilities for the future. A relative bought most of the gold he holds at $1150 p/ounce in 2014. It is now $3350 per. Which is slightly less than a 200% increase. So, he's sitting pretty and will avoid cap gains when he sells (or will pass it on to heirs). I believe it accounts for about 10% of his investment portfolio.

Speaking for myself, I'd be more skittish to buy at the current prices.

Because?....

If you're going to make a recommendation like this, you might want to explain your reasoning.

Personally, I have owned index funds in both formats and prefer mutual funds assuming the expense ratios are comparable. And I will explain why: If you need to sell in a volatile market, it is preferable, IMO, to have end of day pricing regardless of volume.

The S&P 500 stock index has a cumulative return of 260% for the same time period. Also, how will he avoid capital gains if he sells the gold?

As for allocation, I am currently

60% stocks
15% intermediate term treasury bond funds
15% gold
10% cash

Gold has been my best performing asset over the last several years. I had more treasuries, but dumped them last year.

Thanks. I needed a good laugh.

I switched my Vanguard MFs to ETFs because I saw the possibility of my wanting to transfer stuff to another brokerage. The other brokerage charges fees to sell Vanguard MF shares.

Yes, indeed. I wasn't implying that gold is a better performer than stocks but, it's a different asset class, owned primarily for different reasons, has not been a laggard longer term and, as stated, the market has had much to say about that shiny yellow metal by the increased price.

So, unlike what Alan Greenspan claimed, it is not "a barbarous relic" (an intentional misdirect, if I ever heard one!). Central Banks around the world continue to accumulate that asset.

Cap gains taxes can be avoided because the metal can be privately transacted and very often is. (Btw, most of my investments are in stocks and equity funds or shorter-term income assets and cash.)

Selling gold to a private party and not paying the tax is not avoiding the capital gains tax. It is "evading" the tax and it is illegal.

Okay. Potato, potatoe. The reality is I'm sure plenty of people don't.

It's also very likely that many people pass that asset on to their heirs in which case their cost basis gets marked-to-the-market on the deceased date of death. If they sell soon thereafter, they have little or no cap gains tax to pay.

I got a cousin with a beachfront SoCal house and sold his business for $50M, so you'd hope he'd know a bit about money.

He was always encouraging me to buy gold and stash it in the Ol' Gun Safe. Of course, let's say gold is $1000/ounce (hypothetical), and I go to the local "Gold R Us" store in Newport Beach. I want 5 Krugerrands at $1000 each.

Wellllll, you'd think that's $5000, but add in the average fee of 4% and I'm at $5200. Then when I go to sell back my $5000 in gold that really cost me $5200, I have to pay a commission fee of 5%.

So I'm selling $5200 of "investment" and only getting back $4,750. So, unless gold went up substantially, I'm eating $450 of lost cost associated with my $5K in gold coins.

No thanks.

You sold too soon. If you're looking at gold as an investment, you probably should be buying high-end gold coins. Bulk gold and silver is more like investment insurance. It's a hedge against inflation and if the world goes to hell in a hand basket, gold and silver will still be a viable exchange medium. Many financial gurus advocate 5 - 10% in precious metals as the foundation to any portfolio.

But even bulk gold has been a decent investment and in a long-term uptrend. In 1970, gold was priced at $35.96 per troy ounce. With your $5,000, you could have bought about 139 ounces. Today, gold is valued at $3,373.21 per ounce, meaning your $5,000 investment would be worth approximately $469,000! Gold has significantly outpaced inflation over the decades.

There are ways to minimize the spread on buy/sell/spot. It can be done for a lot less than 9%. There are also pesky storage fees if you don't have a gun safe or don't want to risk home storage. I find that the easiest way to avoid all of these detractors is to use a gold ETF. GDLM has an expense ratio of 0.10% and is very liquid. Yes, I am aware of the drawbacks of paper gold vs tangible, but I am of the opinion that if it ever gets that bad, it won't matter.

China Deal
 

No one can predict what if any a trade deal with China will actually be even should the short term framework announced today become one. Given their history, it’s hard to imagine any trading partner believing they will actually comply with it and especially with the hostile shadow war they are executing against our country. It’s important to consider impact with or without a deal on investing during the remainder of the year. Regarding this thread, do they have leverage to further disrupt our economy as we attempt to refinance enormous debt?

Gold has increased almost 900 percent since 1970. You would think that was great BUT the S&P has 2,500 percent since 1970. Case closed.

Case not closed. You are applying a largely inaccurate and narrow litmus test that does not fit why most people buy it. Research more why they do.

Fear and the lack of understanding??

The proposed budget could be balanced or close to it were it not that it provides lots of tax cuts we can afford only by borrowing. As a retired person who doesn’t count on Social Security, I’ll get several thousand dollars more per year, but it’s all deficit spending. The tax cuts fulfill campaign promises and curry votes, but they aren’t good for the country in the long term. What’s good for the country is those who have a lot paying more taxes and lowering the deficit and the national debt. Lowering the value of the dollar could be very good for us if people overseas were buying what we make, but now a lot of people overseas are angry at us and not buying what we make. We could have solved the Social Security problem years ago by simply raising the withholding tax by 1%, but who want to run on the platform of raising taxes?

I agree with you on no load mutual funds, but I have ALL my money there. Your 40/40/20 split is standard wealth management advice that maximizes income—for wealth managers. If I’d followed that advice over the years, I wouldn’t have been able to afford moving to The Villages and living in a house with no mortgage. My money has gone up much faster in mutual funds than it would have in bonds.

tech stocks in general, with a focus on AI stocks (NVDA, DELL, SMCI) and an eye on quantum computing stocks (waiting for a big pullback after the hype fades). Tech is the future (Always). With a sizeable portion in high-yield, safe investments.

34 trillion in debt and a dollar that is losing about 9% in buying power a year. Solution is be your own central bank. Do as they do. Buy gold. Buy silver. Trade out those feckless dollars for real in your hands wealth.

I have had some pretty nasty tax surprises with mutual funds. You don't get tax surprises with ETFs

Serious and thoughtful reply as requested. See attached.

Ummm, according to the US constitution, gold and silver are the ONLY legal money. Money itself can not be subject to a capital gain. There is no capital gain when spending that gold for anything including fiat paper currency. Valuing gold in fiat currency or land or food or goats does not constitute any gain. It is fraudulent for the USG to value everything in fiat dollars in order to confiscate / tax any perceived gain. Gold and silver (constitutionally) are not subject to any capital gains.

Try reversing your thinking. Gold is not $3300 / ounce. Rather:
a fiat dollar is worth 1/3300 of an ounce of gold (today)
a loaf of bread is 1/660 of an ounce of gold
a new car is worth 10 ounces of gold

Eventually, a fiat dollar will be worth nothing but a loaf of bread will still be 1/660 of an ounce of gold or other adjusted value (supply / demand). Same with cars, furniture, ovens, cattle, etc.

I look at what’s going on in the economy, WH, and global events to try and figure out if it’s wise to be in the market, or to be in all money market funds. My days of holding thru recessions like in 2022 are over, I’m capitalizing on the downturns to make money, sell into money market funds then start getting back in when sentiment is at its lowest. It worked in 2022 and last December when I sold everything. This year I got back into the market the 1st week in April and in these last 2 months have had my biggest rebound gains since the 2020 ‘V’ shape recovery.

When somebody makes a claim to jump into etfs over anything else is not an investor. There are thousands of mutual funds, index funds and etfs. I have heard people say they are getting into etfs like they are all have magical values to them. No fund group has any magical traits, you still have to know which fund you want to get into because some will make money and many many others will not. You can make a small fortune right now depending on how you invest.
I never have nor ever will buy bonds. I want to make money, if I want to be safe, I’ll put it in money markets, which I still have 25% of our portfolio in money market making over 4%, was making over 5.25% a few months ago. So my portfolio is 75% stocks/funds and 25% mm. All of my funds are indexed based with expense ratios of .02-.04%, low risk, high return, low turnover, and I have had most of these for over a decade when I’m fully invested. Most if not all earn over 25% with a couple over 40% a year.
Normally I only invest in stocks that I know like Apple, meta, Tesla and a few others. In 2023, I got back into the market with stocks like the above and made 100’s % gains then got out of all of them last December. Easy money since they were all way down, some of them below $100 a share.

I did the same thing in April 2025, got into 7 AI/high tech/and other class of stocks and made very good money. I normally don’t share my picks but since I’m out of 3 of them now, I can share: APP, ZIM, and HIMS, with HIMS making 100% gains in a couple months while the others were around 50% gains. Sold these and put the monies into other beat up high tech stocks that are making the same type of gains as those 3. Eventually when these stocks start leveling off I’ll be back into my go to index funds.

Sounds good, but the IRS doesn't agree.

From AI and Smartasset:

"The IRS taxes capital gains on gold the same way it does any other investment assets. But if you have bought physical gold, you'll likely owe a higher tax rate of 28% as a collectible. Mar 28, 2025."

From Bankrate:

"Capital gains on physical gold are taxed as collectibles and can be higher than the standard long-term capital gains tax rate. The maximum capital gains tax rate on collectibles, including physical gold, is 28%. This means that if you hold gold for more than a year and sell it for a profit, you may owe 28% of that profit in taxes, according to Bankrate."

Yes, that is definitely one point of view and some similarities with Weimar and some key differences too. Is hyperinflation a concern for you?