# Silver, Gold, and Tinfoil



## Rusty O'Toole (Feb 1, 2012)

Why do people put their money in the bank?

- Savings accounts at major banks pay .25% to 1.05%

-The inflation rate is 1.5% to 2%

- Once you give your money to a bank it is legally theirs. If they need it, they can do a bail in and keep it.

- In one year Gold has gone up 14.47% and Silver 3.23%

So who is crazy, the person who keeps his money in the bank or the person who keeps it in silver dollars or gold bars buried in the basement?


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## lightcycle (Mar 24, 2012)

Rusty O'Toole said:


> *In one year* Gold has gone up 14.47% and Silver 3.23%


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## swoop_ds (Mar 2, 2010)

I think you're only crazy if you're not diversified and have all your money in something. 

Also, I can't trust gold and silver with money that I'll need in a year. HISA makes more sense than normal bank accounts though for that, or GICs to a lesser extent right now. Or individual bonds too I guess.


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## Rusty O'Toole (Feb 1, 2012)

Gold - 30 days + 15.42%
- 6 months + 13.9%
- 1 year + 14.7%
- 5 years + 38.23%
- 10 years + 205%

Silver - 30 days + 21.02%
- 6 months + 1.9%
- 1 year + 3.23%
- 5 years + 25.1%
- 10 years + 106%

I chose the one year specifically to avoid the accusation of cherry picking, and so results would be comparable to bank interest.

Statistics from this site. http://goldprice.org/gold-price-canada.html


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## Rusty O'Toole (Feb 1, 2012)

In some places interest rates are negative, in other words you pay the bank to take your money. In Canada the return is negative if you take into account inflation. Yet people still put there money in the bank. 

You could invest your money in canned goods, macaroni and rice and do better than that. And you would have food in the house if you got snowed in. 

I don't care what you invest in. It just seems funny to me if I am the only one who notices these things.


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## fatcat (Nov 11, 2009)

Rusty O'Toole said:


> Gold - 30 days + 15.42%
> - 6 months + 13.9%
> - 1 year + 14.7%
> - 5 years + 38.23%
> ...


palladium, nickel, zinc and aluminum all outperformed gold in 2014

http://www.usfunds.com/media/files/pdfs/researchreports/2015/2015_Periodic-Table-of-Commodities.pdf


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## BoringInvestor (Sep 12, 2013)

Rusty O'Toole said:


> - Once you give your money to a bank it is legally theirs. If they need it, they can do a bail in and keep it.


Nope.
http://www.theglobeandmail.com/report-on-business/ottawa-clears-up-confusion-over-bank-bail-in/article10697667/


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## lightcycle (Mar 24, 2012)

Rusty O'Toole said:


> Why do people put their money in the bank?


If you're talking about the vast majority of Canadians, they don't put their money in the bank. It is deposited there by their workplace via direct deposit. Then that money flows to various bills and payments and ATM withdrawals until there is nothing left till the next paycheque.


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## dogcom (May 23, 2009)

Gold and silver is anti central bank money printing so you have to remember they will do anything and everything to keep it down or controlled for as long as possible. So this is why it is often held as insurance for when the system breaks down as it must over time. But by being held down artificially it does provide a big upside potential for when these banks can no longer control it. We could be getting close to this now with debts extremely high QE everywhere and physical gold being asked for by China and such instead of the CRIMEX paper game.

Overall though one is better off stocking necessities, paying off debt and buying supplies while it is cheap and holding some cash at home in case you need to hold out for awhile in the case of a banking breakdown. Banks may not be safe so choose the most solid bank you can and I think this would be safer then keeping your cash and PM's at home where real crooks can take it any day of the week rather then a rare banking crisis


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## Rusty O'Toole (Feb 1, 2012)

They don't need a "bail in" to use their own capital. That is what it is for. A "bail in" is something else, something we have not had in Canada before this. The new budget says one thing, now they are back pedaling. But if the day ever comes that they need a bail in, it is now legal for them to do it.

The question is why should you put your money in the bank when you get practically nothing in interest, less than nothing after inflation? And it may not be as safe as everyone thinks?

I could also ask if any of you have tried to withdraw a large sum of money, say $5000? Or cash a check for $1000 or more in a bank where you don't happen to have an account? You will find out whose money it is.


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## Rusty O'Toole (Feb 1, 2012)

“The [Canadian] bail-in regime is to protect both taxpayers from having to bail out banks and depositors from having to take a financial hit like we’ve seen in Cyprus,” Ms. Perchaluk said. “If a bank is having severe difficulties, the bail-in regime would force certain debt instruments to be converted into equity to recapitalize the bank.”

Under Canadian law your bank account is a debt instrument. They are not holding your money in trust, you gave it to them now they owe it to you. 

In 2013 they made bail ins legal. Now they say "Oh we would never do that". And you can count on them not to, unless they really need the money.


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## 299889 (Jan 5, 2015)

Does anyone here actually buy and hold on too metals other then cold or silver? (The "popular" ones)

What about lead? Is it to common or because of lead poisoning?
Copper? Seems to be on a huge down slope...
Nickel couldnt find much on it...

Minerals do seem like a hot investment but how much higher can these prices go? Alot was from people taking money out of oil in 2008 and put in gold? Correct me if im wrong but Im pretty sure that happend


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## Eclectic12 (Oct 20, 2010)

Rusty O'Toole said:


> Why do people put their money in the bank?
> ... So who is crazy, the person who keeps his money in the bank or the person who keeps it in silver dollars or gold bars buried in the basement?


The person who things that everyone is putting money into the bank as an investment?

Most that I am aware of are putting it there to pay bills, provide a buffer if their pay is late and are transferring out to invest (whether it be a GIC ladder, stocks, bonds, REITs, indexes, RE, split shares, options, gold, silver, platinum, collectable plates, stamps, small businesses ... etc.).




Rusty O'Toole said:


> ... You could invest your money in canned goods, macaroni and rice and do better than that. And you would have food in the house if you got snowed in.
> I don't care what you invest in. It just seems funny to me if I am the only one who notices these things.


So what is the vegetable soup index doing lately? What is the beef stew to CAD exchange rate? 
.... I can see where one can use the food but I'm skeptical it is easy to convert back to cash.


Don't forget that most on CMF are well versed in investments/finances compared to those on the street so there's lots with money in the bank who aren't thinking about investing at all.


Cheers


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## indexxx (Oct 31, 2011)

It's not like you are losing money by putting it in the bank. That 1/2% interest or whatever doesn't 'pay inflation', so it's not like it costs you anything to keep a bit of money in your account. As mentioned above, we just need to pay bills etc out of our bank accounts. Personally I keep very little in any bank account- everything is invested.


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## swoop_ds (Mar 2, 2010)

eeehitscody said:


> Does anyone here actually buy and hold on too metals other then cold or silver? (The "popular" ones)
> 
> What about lead? Is it to common or because of lead poisoning?
> Copper? Seems to be on a huge down slope...
> ...


The problem with most other metals is that they aren't easy to carry around enough to be worth something. You can pack $1600CAD into a gold coin but copper is $3/POUND, you'd need a truck full to be worth anything. Having said that, palladium and platinum are collected by some folk. I'd like to get some but don't really understand the "white metal" markets.


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## BoringInvestor (Sep 12, 2013)

Rusty O'Toole said:


> “The [Canadian] bail-in regime is to protect both taxpayers from having to bail out banks and depositors from having to take a financial hit like we’ve seen in Cyprus,” Ms. Perchaluk said. “If a bank is having severe difficulties, the bail-in regime would force certain debt instruments to be converted into equity to recapitalize the bank.”
> 
> Under Canadian law your bank account is a debt instrument. They are not holding your money in trust, you gave it to them now they owe it to you.
> 
> In 2013 they made bail ins legal. Now they say "Oh we would never do that". And you can count on them not to, unless they really need the money.


The quote you picked *explicitly* says depositors don't have to take a financial hit.


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## Rusty O'Toole (Feb 1, 2012)

I may be older than you and have heard more promises from the government. But when they pass a law allowing themselves to do something, and then say "but we will never do it, we promise" I can't help being skeptical.


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## Rusty O'Toole (Feb 1, 2012)

Personally I am happy that I hold some of my savings in precious metals as the Canadian dollar falls. Gold I paid $1175 an ounce for is now worth over $1500. I don't look on this as an investment, I look on it as a safe place to store wealth.

When I look at what the banks are offering it doesn't look that appealing. Yet people continue to put their money in the bank, and laugh at us fools who own gold and silver. I don't understand this attitude. Can someone explain it to me?


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## techcrium (Mar 8, 2013)

Rusty O'Toole said:


> Personally I am happy that I hold some of my savings in precious metals as the Canadian dollar falls. Gold I paid $1175 an ounce for is now worth over $1500. I don't look on this as an investment, I look on it as a safe place to store wealth.
> 
> When I look at what the banks are offering it doesn't look that appealing. Yet people continue to put their money in the bank, and laugh at us fools who own gold and silver. I don't understand this attitude. Can someone explain it to me?


1. How old are you?


2. You paid $1175 per ounce, which means you started investing in gold in 2010 or 2014. Both of which are recent years.

This leads me to ask you, why didn't you start in 2005? 2006? or even 1990? Why did you recently "realize" money printing scheme?

Governments have been printing money for 60-70 years now and you only "realized" it in 2010?


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## BoringInvestor (Sep 12, 2013)

Rusty O'Toole said:


> I may be older than you and have heard more promises from the government. But when they pass a law allowing themselves to do something, and then say "but we will never do it, we promise" I can't help being skeptical.


Your interpretation of the law doesn't match what those in the industry, nor what the government, are saying.

As far as I can tell, the sole source of your claim is the use of the term "bail-in".


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## tenoclock (Jan 23, 2015)

I don't save money in a bank unless it's stocks that I am buying, neither am I planning to do so ever. With a fiat currency, a government can very easily devalue all our savings and even completely destroy it. Most people in developing countries put their money in gold or land (if they can protect their claim to it) rather than a bank because banking systems are not that stable, nor are institutions. And while Canadians take their banking system for granted, it's not sacrosanct. Past performance of stability is no guarantee of future stability, unless we are talking about a shiny metal which has a 6000 year old history in pretty much every human culture on earth.


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## fatcat (Nov 11, 2009)

tenoclock said:


> I don't save money in a bank unless it's stocks that I am buying, neither am I planning to do so ever. With a fiat currency, a government can very easily devalue all our savings and even completely destroy it. Most people in developing countries put their money in gold or land (if they can protect their claim to it) rather than a bank because banking systems are not that stable, nor are institutions. And while Canadians take their banking system for granted, it's not sacrosanct. Past performance of stability is no guarantee of future stability, unless we are talking about a shiny metal which has a 6000 year old history in pretty much every human culture on earth.


amen to that and praise the lord ... goddamn banks ... thank you reverend for that stirring sermon


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## CPA Candidate (Dec 15, 2013)

I might as well just read Zero Hedge rather than coming here.


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## dogcom (May 23, 2009)

We will see in the next few days if it is business as usual or something is very wrong in 2015. The manipulators always drop the price of gold and silver following an FOMC meeting and month end options expiry and if they don't then either they are losing control or they are signalling a change in 2015.


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## Rusty O'Toole (Feb 1, 2012)

techcrium said:


> 1. How old are you?
> 
> 
> 2. You paid $1175 per ounce, which means you started investing in gold in 2010 or 2014. Both of which are recent years.
> ...


I'm old enough to remember going to the movies with a dollar, buying a ticket, popcorn, and orange drink and coming home with change.

I didn't have the money before 2010. If I did it was tied up in real estate. I've known about inflation, fiat money etc since the seventies. Governments have been printing money for a thousand years, and debasing metal currency before that.


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## techcrium (Mar 8, 2013)

Rusty O'Toole said:


> I'm old enough to remember going to the movies with a dollar, buying a ticket, popcorn, and orange drink and coming home with change.
> 
> I didn't have the money before 2010. If I did it was tied up in real estate. I've known about inflation, fiat money etc since the seventies. Governments have been printing money for a thousand years, and debasing metal currency before that.


If you are that old, what were you doing with your money before 2010?

Why didn't you buy gold before 2010? 

What were you doing with your money in the 80s and 90s?

There's no way ALL of it was tied in real estate...


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## dogcom (May 23, 2009)

It was just as I easily predicted the manipulators nailed gold and silver right after the FOMC meeting and right through the next day. You shouldn't be able to predict the market but these guys want us to know that gold and silver must go down after an FOMC meeting so they can get as much volume as possible to the downside.


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## Rusty O'Toole (Feb 1, 2012)

I just told you. Yes it was ALL tied up in real estate, every penny. Plus all the money I could borrow. I never had a "cushion" or savings, I needed every penny to live on and what I could scrimp and save, invested in property.

If I could figure out a way to make real estate a passive investment, I would still be investing in real estate. I just don't want to work that hard. I still have some rental property though.

In an inflationary environment real estate is a terrific investment because of the leverage. I know inflation has not been on peoples' minds since the seventies, and is considered negligible today. Still it is enough to cause real estate to double every 10 years, and has made me a lot of money.

I do have a pickle jar full of silver coins I picked out of my change when we went to tin money in the late sixties. It will still buy as much stuff as it ever would. The tin and paper money, not so much.


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## Rusty O'Toole (Feb 1, 2012)

In the sixties movie tickets cost 35 cents, pop 10 cents popcorn 15 cents. But I was lying about going to the show with a dollar, back then who had a whole dollar all at one time? None of the kids I knew.


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## dogcom (May 23, 2009)

Here is a good explanation of how the PM through CRIMEX works. You have to wonder why anyone that speculates would have anything to do with this market unless they knew what the manipulators are going to do.

http://www.silverdoctors.com/inherent-unfairness-the-rigged-markets-that-are-gold-silver-futures/

Rusty I gave you a before it happens example up thread of a 99 percent certain move by the manipulators. No comments here on this or about how the riggers are blatantly screwing with everyone. Right now this is all well and good for the buy and hold crowd but when it goes against them at some point they will not be so happy as their banks and bonds burn to the ground and even to the point where they may need to help themselves to our bank accounts or something else.


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## Rusty O'Toole (Feb 1, 2012)

Thanks Dogcom but I was talking about a different thing. My point was, if interest rates are practically zero and the Canadian dollar falling, why put your savings in the bank? Why not keep them in silver coins ? 

This actually makes sense now. Even for the squarest of mainstream thinkers. But of course we still get the usual "awe yer nuts" type arguments,


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## hboy43 (May 10, 2009)

Rusty O'Toole said:


> Personally I am happy that I hold some of my savings in precious metals as the Canadian dollar falls. Gold I paid $1175 an ounce for is now worth over $1500. I don't look on this as an investment, I look on it as a safe place to store wealth.
> 
> When I look at what the banks are offering it doesn't look that appealing. Yet people continue to put their money in the bank, and laugh at us fools who own gold and silver. I don't understand this attitude. Can someone explain it to me?


I look at my shares as a safe place to store wealth that also happens to return 10% PA average.

I neither leave cash sitting in bank accounts at 0% (other than working funds ~ $5-$10K) nor do I own precious metals. I see both as weak ideas over the long term.

hboy43


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## banjopete (Feb 4, 2014)

I guess the metals heads have officially landed, and the official "first thread to mention fiat currency" award goes to..... Rusty O Tool. It's refreshing to read a different opinion, even if I don't agree with most of the topic, cheers for the info about the pending doom. I'll be sure to adjust my life accordingly. Now where did I put that survival kit, my pre-made kindling, strike anywhere matches, and that darn guide to... oh yeah starting an economy of trade, I know it's around here somewhere, oh over there under my blacksmith everything bible.


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## tenoclock (Jan 23, 2015)

After reading this thread, I have now sold all my gold holdings and put that money in my BMO account at an outstanding interest rate of 0.75% per annum which compounded over 40 years would make for an outstanding windfall. Obviously, since our banks have never folded ever like ever, they cannot possibly do so in the future as well because we all trust out government and out politicians to do the right thing when disaster strikes.


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## sags (May 15, 2010)

If the question is why people hold their money in bank accounts or low interest GICs.............the answer is as simple as they don't want any risk of losing their money.

From what I have read..............80% of the money in TFSA accounts is held in GICs or savings accounts, so a lot of people favour security over rates of return.

We managed some banking, shopping and maintenance duties for a elderly friend who had 6 figures in a bank savings account, a sizeable amount sitting in a US savings account, Canada Savings Bonds and GICs.

She wouldn't even consider investing it anywhere else, except she allowed her son to transfer some into the GICs. Even with that........she was wary.

There is much talk about "losing to inflation" but that wasn't a consideration for her at all. She owned her home, didn't drive a car and rarely left the house.

Her bank accounts kept growing every month from her pensions, and she also collected US Social Security which was deposited into a US savings account for 31 years. 

She was collecting $900 US a month and she only took US dollars out on rare trips to the US.

She passed away at the age of 96. I have no idea what was in that account...........but it must have been a lot of money after all those years.

People who aren't spending very much have little concern about inflation.


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## banjopete (Feb 4, 2014)

True, and in all seriousness, to the OP, if you think you can get a safer and better return with a different vehicle than what the bank offers, have at it. Much as anything does the risk goes with the reward, if precious metals seem to be the answer and you see an opportunity for continued strength then it's a decision that works well for you.


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## Eclectic12 (Oct 20, 2010)

sags said:


> If the question is why people hold their money in bank accounts or low interest GICs.............the answer is as simple as they don't want any risk of losing their money.


There's many factors ... they may not want to risk, they may have their pay cheque deposited (then outgoing almost immediately), they may know they need the money in a few months for a wedding/house downpayment ... etc. etc.

Definitely those without a need for the cash should be looking at other things ... but the question in my mind, is how many are of the "pay cheque in, bill payments out" versus say CMF-ers who are actively moving into better paying investments (gold, silver or otherwise).




sags said:


> From what I have read..............80% of the money in TFSA accounts is held in GICs or savings accounts, so a lot of people favour security over rates of return.


It's hard to get a handle on this ... first there's plenty who seem to have no idea that a TFSA can hold anything other than GICs/savings.

Secondly, I find the details for most of these reports vague & suspect. One report claimed to show by type of investment the percentages ... when I went to school, such percentages should have added up to 100% but I seem to recall the report numbers adding up to something like 116%.


I have no doubt GICs/savings are favoured but am not so sure it is as high as reported ... especially with the reports coming from those who would benefit from people deciding to buy MFs instead.


Cheers


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## swoop_ds (Mar 2, 2010)

I leave a 5k buffer/emergency fund in my td account to avoid the fees and get all the perks of their expensive account. The rest of the emergency fund is precious metals held in a safety deposit box that comes with the account and I also have a line of credit for emergencies too. That would be a last resort though.


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## sags (May 15, 2010)

I remember when it was said there was a small number of people invested in the stock market, and someone would always add that those in pension funds are involved in the markets indirectly.

With the decline in pension plan availability, that isn't as much a factor anymore, and an increasing number of people gain nothing from the stock markets directly or indirectly.

People trust banks and governments a lot more than they trust stock markets they know nothing about.

If the bank is going to pay them interest of 1%...........they think "hey thanks........free money".

My wife is like that. She inherited money and it is all sitting in GICs. She invested $25,000 years ago and almost immediately lost 50% of it. 

She withdrew the remaining $13,000 and invested in GICs. That was 20 years ago.

If the markets were to crash again and lose 50% value,.......... we would see how much risk people can really handle.

I think it is pretty simple. People aren't prepared to do all that saving, all that struggling............to watch their money vanish into thin air.

Once is usually enough to keep them out of the markets for good.

Change to gold or silver.............not likely for them.


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## sags (May 15, 2010)

The reality is that stock markets are the same as gambling dressed up in a suit.

People say they will buy a stock..........and if it falls in value, it doesn't matter because they will hold on to it.

That reminds me of a buddy who played the slots and used to say the casino was just holding his money for him.

When one person buys a stock...........someone else is selling the stock.

The seller thinks the value will go down............the buyer thinks it will go up.

The house (brokerage) always get their cut of the action.

People have jumped off bridges because they lost at the casino. People have jumped off bridges because they lost in the stock market.

It is true that wise long term investors have done very well. It is also true than many have had their futures ruined by the stock market.

Lots of parallels between the stock market and gamblers.


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## GreatLaker (Mar 23, 2014)

> The reality is that stock markets are the same as gambling dressed up in a suit.


Except in gambling the gambler is unlikely to come out ahead in the long run. 
Investors are likely to come out way ahead in the long run as long as they stick to some basic principles.


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## Eclectic12 (Oct 20, 2010)

sags said:


> I remember when it was said there was a small number of people invested in the stock market, and someone would always add that those in pension funds are involved in the markets indirectly.
> 
> With the decline in pension plan availability, that isn't as much a factor anymore, and an increasing number of people gain nothing from the stock markets directly or indirectly.


I wonder how true this is considering Stats Canada says from 2011 to 2012, registered pension plan membership grew.
Interestingly, private sector growth is listed as 1.7% while public sector growth was listed as 0.6%.

http://www.statcan.gc.ca/daily-quotidien/140828/t140828d001-eng.htm


It's a short time frame but I seem to recall finding a similar article with a much longer time frame that illustrated the switch from DB to DC but also showed long term growth.



Cheers


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## hboy43 (May 10, 2009)

sags said:


> Lots of parallels between the stock market and gamblers.


Yet the funny thing is that I the stock market gambler has never purchased a lottery ticket nor have I dropped a penny in a casino. I think I ate a meal once in a casino.

hboy43


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