Age-based Saving with Gold and Real Estate

Posted by: Lauren Young on December 22, 2008

Today’s installment of age-based investment tips for 2009 focuses on gold as well as real estate.

25 to 35:
The key for investing for this age group is thinking long term. Plan to invest a specific amount of money regularly over a long period of time.

Avoid selling stocks unless you absolutely need the liquidity, getting out at the bottom will mean missing the upswing. The current stock market offers and opportunity to buy at low prices, according to Thomas OBryon, CEO of Wilshire Finance Partners, a Los Angeles-based real estate lending company.


35 to 55:
Success in investing requires a long-term strategy and diversified portfolio with investments that include but not limited to real estate, commodities, stocks and bonds.

Avoid selling stocks and consider buying shares in financially solid companies that have earnings and a small debt to equity ratio. If you’re in the bond market go with shorter-term notes, you will be less affected by volatility and they are more liquid.

Consider a 5% to 15% investment in precious metals as a hedge. “In 5,000 years, gold has never been worth zero,” says Kevin DeMeritt, president of Lear Capital, a Los Angeles-based precious metals investment company.

55 to 75 and older:
People are living longer, healthier lives. This, combined with inflation, means there is a real concern for longevity risk management. These folks need investments that provide predictable monthly cash flow, security of principal, generate attractive rates of return, offer diversification, and an inflationary advantage that is not affected by market volatility, says Wilshire Finance’s OBryon.

“Mortgage pools, generally managed by private lending institutions, represent one of the greatest sources of investment revenue opportunities today,” OBryon says. “Investing in a mortgage pool fund can provide lifetime retirement income making them ideal for retirees, those nearing retirement and others on a fixed income.”

Mortgage pool loans are based on the value of real property. They are generally short-term, bridge loans (one year to five years). As asset-based loans, the primary source of repayment is from the sale or refinancing of the collateral property.

Reader Comments

Rick Friedl

December 22, 2008 12:14 AM

I am of retirement age and I have 90% allocated to real estate, gold, silver and 10% cash. No bonds, stock, or CDs, and I sleep well. Paper assets are in for a serious decline.

PROF G.A.NAYAK

December 22, 2008 3:24 AM

excellent. given the best ways of savings and enjoying fruits there off

Horsepucky

December 25, 2008 7:54 AM

Given the secular, spectacular decline in real estate values that is not yet matured, how can anyone be advised to buy into it?

And an investment in gold is a bet in favor of calamity -- as if what we have now isn't already enough of one.

Do we need to follow the money to determine why someone on BW's staff would give this advice?

Dante

December 26, 2008 1:31 PM

Ah, another rambling imbecile with nary a point. So what are you trying to say, "Horsepucky"? Stuff everything in your mattress?

As to the folks who actually put money where their mouth is, I'm not sure if commodities are a safe haven right now "Rick Friedl". Gold demand is down at this point.

Brandon

December 28, 2008 10:08 AM

People investing a majority, if not everything in real estate and gold right now are ignoring the risk of deflation and the fact that real estate still has room to drop as the ARMs reset in 2009.

Much of this article is pretty generic and applies to anyone investing in anything. So here's another bit of generic advice, unless you know what investment will lead us out of this recession, you need to be well diversified. Spread investments across real estate, commodities, TIPS, cash, stocks, bonds, foreign and domestic, large and small, value and growth, staples and technology, etc. Once the leader emerges, rebalance your earnings into the losing sectors so that they have more room to grow when they hit bottom.

And in contrast to diversification, make sure to overweight in the sectors you believe will win. If you're sure that real estate will fall with the next wave of ARM resets, bonds will fall when interest rates eventually climb, and commodities (including gold) will drop because you believe we will see deflation, then make those portions of your portfolio much smaller than the others.

Be safe with your investments and good luck to all in the new year!

Hal

January 14, 2009 1:15 PM

Good advice. I'm in the 35-55 range and looking closer at the metals markets because I think the dollar is going to be toast. You mentioned Lear Capital and I've been playing with their free widget, ExactPrice, http://www.learcapital.com/exactprice which tracks the precious metals markets and have found it interesting. Right now their sliding with the dow. Though not as fast. The dollar is appearing strong in spite of all the the negative economic data, which baffles me. Guess it's bad the world over. But I don't think that strength will last in light of all the bailouts.

So maybe it's a good time to invest.

I can see real estate as a good option too. Particularly in my market which is quickly turning into a buyers market.

goldcoinsgain

November 2, 2009 6:19 AM

Mortgage pools, generally managed by private lending institutions, represent one of the greatest sources of investment revenue opportunities today,” OBryon says. “Investing in a mortgage pool fund can provide lifetime retirement income making them ideal for retirees, those nearing retirement and others on a fixed income.”

Thanks for the great reading, we are buying gold bullion bullion in a recession. I will pass this on to our ira clients to read

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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