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MiddleAgesMan
10-08-2009, 04:32 PM
What's going on with gold? Three days in a row at new highs.

It's said to move up or down in the opposite direction as the dollar, which is falling, but I seem to recall a few weeks ago they were both climbing for several days.

I think the market "gurus" just make things up on the fly. :)

One more question for the real gurus--is it time to get back into real estate? I have an opportunity to buy a lot at fire sale prices but would have to use a good chunk of my IRA funds to avoid financing the property. (No penalty at my age but withdrawing the funds would be a taxable event.)

George Roberts
10-08-2009, 05:11 PM
What's going on with gold? Three days in a row at new highs.

It's said to move up or down in the opposite direction as the dollar, which is falling, but I seem to recall a few weeks ago they were both climbing for several days.

I think the market "gurus" just make things up on the fly. :)

One more question for the real gurus--is it time to get back into real estate? I have an opportunity to buy a lot at fire sale prices but would have to use a good chunk of my IRA funds to avoid financing the property. (No penalty at my age but withdrawing the funds would be a taxable event.)

Market "gurus" do "just make it up."

There are always good opportunities in real estate. In the best opportunities you have a buyer ready to pay you much more than what you pay the seller.

You might need a sharp pencil to see if using your IRA is a better choice than borrowing.


The property is cheap for some reason. You should find out the reason first. It is a big shock for some to discover that there are risks associated with most good deals.

MiddleAgesMan
10-08-2009, 09:08 PM
Thanks for the link, erster. You'd think the CNBC folks would take the time to cover that story in some depth but all they've done is issue 1 and 2 sentence fatwas saying "it is rumored" this and "some experts think" that. What a sorry excuse for a financial network. I caught a snippet today where they were talking about George Soros, I believe related to what has been happening with gold and the dollar. I wonder if he's manipulating prices with his billions.

The lot(s) in question are part of a golfing-waterfront community about an hour south of Savannah. I believe they had been selling lots for several years prior to the bubble bursting but the crash put a halt to that. I'm told all amenities are in place and in use by the few people who bought and built a couple years ago. The story (independently confirmed) is the owners are tired of waiting and want to either retire or take on new projects. They cut prices of all unsold lots in half. Out of 350 lots there are only about 50 houses built with about half of those occupied full time (many are second homes, apparently). I used to keep my big boat in the area and I really like it but this development was not there at the time. I'll be paying them a visit this weekend.

If the dollar continues to tank and inflation takes hold as predicted in that Yahoo article this real estate thing might be better than equities or mutual funds. If the dollar doesn't tank, however, the values could very well languish for another 4 or 5 years, or so it seems to this seat-of-the-pants investor.

PatCox
10-08-2009, 09:18 PM
With the tax on the IRA disbursement, it would seem like its a better move to finance, even if you don't have to. Interest on the loan has to be less than tax on the IRA funds. Why pay income tax on the whole purchase price, when you might not own it long enough to have to pay the whole purchase price with after-tax money?

Lew Barrett
10-08-2009, 09:21 PM
Timing markets is one way to go broke if you miss, or make it big if you hit, but gold seems to me to be a good bet on any pull backs in here. And inflation for the dollar seems a foregone conclusion at some point.

How secure does anybody feel in here? I believe there are more shoes to drop, myself, so I would not bet the farm on any one investment in here, especially a lot. That is, unless you want to build a house there. Mike's article link (thanks, Mike, good link) suggests you might be as well off betting on gold as on RE. You think we're bottoming, or just taking a break on the way down? I sure as hell don't see a big improvement. Of course, it's good to buy things of value when they're cheap, and a lot of real estate does seem bottom feeder priced now. But if you have to bet the whole farm.....

Pat properly raises the issue of tax consequences, so that's a consideration if you do decide to spring.

MiddleAgesMan
10-09-2009, 04:26 AM
Since I'm "between jobs" and not likely to find one before retiring next year I will have very little taxable income next year. That makes the tax consequences of using IRA funds close to nil. I have a verbal agreement to buy with two balloon payments, 1/2 on January 15, 2010 and the other half on Jan. 15, 2011. Not having seen the lay of the land this is all speculative, of course. If I do I would build on the lot eventually--probably in 3 to 4 years.

I took half my profits from the gold run-up a couple days ago, remembering the old advise--Don't be greedy! The other half is still in gold and is making more every day. I might take half again if profits reach the same $ value where they were two days ago. I don't know if this is a legitimate strategy or not; it's sort of like doubling down but in reverse.

Since the experts think gold is unstoppable it will probably fall back within a week or so. ;)

Has anyone else heard rumors about Soros running this gold-dollar circus?