Does your money "feel safe"?
jmski52
Posts: 22,825 ✭✭✭✭✭
It used to be that you would plop your savings into a low-interest passbook savings account if you wanted it to slowly build up over time in a "safe" instrument.
Then money market accounts came along and offered a higher rate of interest in order to compensate for that thing called inflation, but you still felt somewhat safe and smart at the same time for taking advantage of a nice return that still offered some flexibility.
Of course, if you had the dough you could buy a T-Bill and sit on it until maturity for the ultimate safety with a good rate of return.
Then came a plethora of mutual fund offerings, some of which were index funds, some were high return funds, some were value funds and others were targeted specialty funds - all offered under the premise that you knew what the hell you were doing and could actually manage your own money at least as well as the brokerage house (who still got your money, but you felt better about it.) Portfolio diversification was seen as the "safe" way to invest and still keep your options open.
Finally came the discount brokers, who could help you be even smarter by helping you pick your own stock portfolio because it was now feasible to buy and sell smaller chunks of stock without getting commissioned' to death. In reality, you still got commissioned to death but you had to admit that you still felt pretty good about that stock you bought at $10 right before it went to $40 during the dot.com bubble. At that point, it seems that safety was much less a concern than was "making money".
Now, we have interest rates at multi-decade lows. Some people still consider Treasuries as being "safe" even though the interest on them is almost zero.
I know what I believe, but what do YOU consider to be the safest combination or mix of assets?
Then money market accounts came along and offered a higher rate of interest in order to compensate for that thing called inflation, but you still felt somewhat safe and smart at the same time for taking advantage of a nice return that still offered some flexibility.
Of course, if you had the dough you could buy a T-Bill and sit on it until maturity for the ultimate safety with a good rate of return.
Then came a plethora of mutual fund offerings, some of which were index funds, some were high return funds, some were value funds and others were targeted specialty funds - all offered under the premise that you knew what the hell you were doing and could actually manage your own money at least as well as the brokerage house (who still got your money, but you felt better about it.) Portfolio diversification was seen as the "safe" way to invest and still keep your options open.
Finally came the discount brokers, who could help you be even smarter by helping you pick your own stock portfolio because it was now feasible to buy and sell smaller chunks of stock without getting commissioned' to death. In reality, you still got commissioned to death but you had to admit that you still felt pretty good about that stock you bought at $10 right before it went to $40 during the dot.com bubble. At that point, it seems that safety was much less a concern than was "making money".
Now, we have interest rates at multi-decade lows. Some people still consider Treasuries as being "safe" even though the interest on them is almost zero.
I know what I believe, but what do YOU consider to be the safest combination or mix of assets?
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.
I knew it would happen.
0
Comments
Box of 20
<< <i>PMs for years now. I am forced to put most of my 401K in a Money Market for now earning 1.02% and some bonds since I am out of the stock market. I can take it out in 11 years when I am 59 wihich I will do. I don't want to take the hit of liquidating my 401K now. However in 11 years I think the dollar will finally collapse and be devalued. >>
Yes, that's a tough decision. Take the upfront hit which is huge and put it in something "concrete" or wait 11 years and watch the dollar continue to sink... Comrade jimski did this three years ago now(I think?). I bet the more time goes by the better he feels about his decision.
<< <i>PMs for years now. I am forced to put most of my 401K in a Money Market for now earning 1.02% and some bonds since I am out of the stock market. I can take it out in 11 years when I am 59 wihich I will do. I don't want to take the hit of liquidating my 401K now. However in 11 years I think the dollar will finally collapse and be devalued. >>
Same here. I stopped adding to the 401k two years ago and put that money into pm. The 401k has been flat or negative for the last two years. I nevered worried about growing my money in the past, now I fight just to keep what I have.
Fred, Las Vegas, NV
The other day I was looking at returns for the last ten years (I've actually only been retired for nine, but I don't think that year throws the figures off much) All of their stock fund picks were either underwater, or very low single digit returns. All of my picks led the pack, and most by quite a bit, in the bonds the TIPS led.
The lesson? I'm no wizard but I did know that the US market was going to lag the International market, particulalry Emerging Markets. The REITs I went with for diversity, and the TIPS as a hedge. I was a bit nervous when I did it, after all, these people were the "experts."
I Added a gold fund with another group two years ago and have added to it. My allocation now is stocks cash, bonds. The PM fund a good % of that, and the REITs are there also. The cash just sits, but I'm fine with that for now. If gold dipped I would buy in. The rest of the stocks are about 50/50 US and abroad. We also own property and I have a numistmatic collection, also we have physical assets. I think I feel better about the things I can see and touch than any of the paper.
Safe? I don't know that I feel that way about anything anymore, but with this mix I sleep at night. As for the big SHTF scenario I don't think any holdings will be much good if it lasts for any length of time.
PS If I were a young guy I would buy gold, but I would also invest in stocks. I have been slowly adjusting and divesting some bonds with the intent of reducing that % of the portfolio to about 20%, I want to see what interest rates do in the next year or two. Bonds could be in for a large hit. Actually though they haven't done bad the last ten years. Depending on what you held, from long term treasuries to junk, they have returned in the 4-8% range for the last ten years, with most having small double digit returns the last year( the flight to "safety" helped ) having said that I wouldn't recommend buying bonds in the current environment.
Heavy into physical PM's with a smaller percentage in gold/silver miners + energy/ag producers. It's still way too early to give up PM's for the general US stock market. If you want to go into Brazil, India, and other emerging nations then I can buy it. When Dow/Gold gets closer to 3-5 then we can start thinking about whether it's time to shift more towards US stocks. It's still >8. I can understand those who want to have a position in safer currencies like Swiss Francs, Cando, Aussie, etc.
My money feels safe being mostly in tangible assets. Though my biggest concerns are windfall profit and VAT taxes as well as rewriting the rules for PM's ownership, not to mention potential confiscation.
roadrunner
is nothing whatsoever that's safe but the riskiest of all are bonds. These
are among the only investments that have the potential to go to zero in
mere hours.
Commodities and instruments tied to the yen, yuan. and Swiss franc are
probably the safest.
You still need diversification more than ever but now days it should be weight-
ed toward safety and include gold as insurance.
Here
Real Estate Fraud Factories
Imagine you go on vacation for a couple weeks to Hawaii. You come home only to find it either occupied or locked up because its NO LONGER YOURS!
Becoming more like a bannana republic.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i> I know what I believe, but what do YOU consider to be the safest combination or mix of assets?
Heavy into physical PM's with a smaller percentage in gold/silver miners + energy/ag producers. It's still way too early to give up PM's for the general US stock market. If you want to go into Brazil, India, and other emerging nations then I can buy it. When Dow/Gold gets closer to 3-5 then we can start thinking about whether it's time to shift more towards US stocks. It's still >8. I can understand those who want to have a position in safer currencies like Swiss Francs, Cando, Aussie, etc.
My money feels safe being mostly in tangible assets. Though my biggest concerns are windfall profit and VAT taxes as well as rewriting the rules for PM's ownership, not to mention potential confiscation.
roadrunner >>
Tomorrow I'm heading back down to Brazil for 6 days. Every time I go there I feel poorer and poorer.
I've been waiting for an entry point for the Brazilian ETF. There is so much construction going on it's ridiculous. I'd like to hold the ETF until 2016 when the Olympics roll into Rio and then dump it.
BTW, there's a new one, EWZS, that started 9-29-10, a few days ago. It's small cap Brazilian.
edt to add EWZS info
I'm not trying to be "safe", I'm trying to parlay assets and not forgo "opportunity" to stay "safe"
My asset mix:
50% stock in a single start up biotech stock [my second such venture, swinging for the fences with this one, previous company did quite well]
20% balanced, managed equity acounts (401k, IRAs, my own "fun" discount brokerage accounts, etc)
20% California real estate equity (half the house my family lives in and half in a rental condo closer to the San Diego coast) and the remaining
10% spread out among rare coins, bullion, and various chattel like cars, art, certain furniture, jewelry, guns and tools, and silverware and other misc. heirlooms, and cash
if the stock hits, certain cancers will be increasingly treatable, and my family will be set for life. If not, keep working and keep trying, lifestyle will remain the same.
Unless, of course, the chit totally hits the fan, the first two asset classes essentially disappear, and "assets" collapse down to what I and my neighbors can personally defend.
In which case, we're much better prepared than most, and fell as safe as it is practically possible, depending on the severity of the event.
there is growth, there is "playing it safe" (i.e. staying put) , and there is decay. There is no growth without risk. "Safe" often turns into "missed the boat" with the passage of time
Liberty: Parent of Science & Industry
<< <i>Oh heck, the USA once upon a time was THE saftest place on the planet . Now? Did you all see the lastest bada boom that's coming?
Here
Real Estate Fraud Factories
Imagine you go on vacation for a couple weeks to Hawaii. You come home only to find it either occupied or locked up because its NO LONGER YOURS!
Becoming more like a bannana republic. >>
No one will go to jail though.
They and every politician and judge they bought should go to jail. But CEO's
have been proving for decades that the easiest way to make money in this
country is to steal it. So we have crappy products and risk in all investments.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I lost both parents to cancer, one very early back in 1984. I no longer believe in the "cure" for cancer, and even question many so-called medical "treatments." Cancer ironically has basically followed the same path as inflation, the dollar, ethics, and about everything else in our economy/financial/health care system over the past 40 yrs. We have more disease than ever before (heart disease, cancer, diabetes, alzheimer's, hypertension, etc.). You need to treat the root causes, not the symptoms. Reminds me of WIN, whip inflation now. Price inflation wasn't the root cause of anything, merely a symptom of fiat money run amock. And we never got any closer to whipping inflation than we did in 1981-1982. The success most people thought occured in battling inflation only shifted it to more palatable assets such as real estate, professional sports, TV and entertainment, professional fees, stocks, bonds, education, etc. All those things rising in price were considered "good" while commodity prices going up is "bad." Every homeowner loves skyrocketing home prices, though not rising oil prices. The cure/prevention for cancer is relatively simple and within the grasp of anyone. In fact I'd venture that of those 5 diseases mentioned above every one has a major link to our western diet.
Diet, exercise, clean air and water, smoking, a daily minimum dose of sunlight, vitamin/mineral supplementation, and stress: look no futher for a cancer or heart "cure" than those items. All one can do is maximize those by good choices and with the genes they were born with. The typical American diet is so unhealthy that one doesn't have to look much further than that for a primary cause. We no longer get enough nutrients from our highly processed/contaminated/chemicalized foods and meats. And the unnatural things added to our foods are the breeding grounds for disease. Even the earth/top soil of today holds a fraction of the life sustaining nutrients that it did 50-100 yrs ago. We now shun the sun, yet it's the very source of life for our plants and grasses. Our livestock used to eat those grasses and plants before corn and other corn derivatives became the primary staple in theirs and our diets. I read one book that stated that the majority of our diet is corn and petroleum...right down to the high fructose corn syrup (HFCS) in our sodas. Any why not HFCS since it's cheaper and sweeter than sugar, a preservative, and much more addictive. We will have no more success in actually fighting cancer than we have with inflation unless we treat the root causes above. The FED has a 97 yr track record of zero success battling stable prices. Our healthcare industry is building a similar track record with cancer and heart disease, now at about 40-50 yrs. It's simply about prevention at the source. Twinkies in one hand, and pills for high cholesterol and high blood pressure in the other hand can't be called a cure. Lots of profits being made, but only slight improvements in the symptoms. The healthcare and food industries closely mirror the path of the financial/banking/mortgage industries. In most industries we have continually moved away from what has worked or what makes sense for the common good to a system that is concerned about increasing profits.
roadrunner
however, if it's all the same to you, am going to continue to work on developing cost-effective, quality-of-life improving medicines to treat breast, lung, prostate, and pancreatic cancers, among others
it's the most useful thing I can think of doing with my career
Liberty: Parent of Science & Industry
roadrunner
<< <i>
<< <i>Oh heck, the USA once upon a time was THE saftest place on the planet . Now? Did you all see the lastest bada boom that's coming?
Here
Real Estate Fraud Factories
Imagine you go on vacation for a couple weeks to Hawaii. You come home only to find it either occupied or locked up because its NO LONGER YOURS!
Becoming more like a bannana republic. >>
No one will go to jail though.
They and every politician and judge they bought should go to jail. But CEO's
have been proving for decades that the easiest way to make money in this
country is to steal it. So we have crappy products and risk in all investments. >>
Nor do they go to jail in bannana republics .
In China they get a bullet .
For a crime of this magnitude, if in fact the Chinese do that, I agree 100% with it. Boom. Gone.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
of the good old USA is about all one can be sure of anymore. A rather sad state of affairs.
Camelot
Thinking about it; I guess I just wanted to skim a little profit at that point.
My Dad died from cancer in 1961 when there wasn't even any talk of a cure. Old Dr. Robinson told me about 20 years ago "If we knew then what we know now, we probably could have saved him. And I agree with roadrunner regarding the American diet. My grandmother blamed my Mom's American cooking for my Dad's death. My father's parents came from Finland. My grandmother boiled most meats and poultry prior to making any cooked dish. The old Scandinavians knew how to eat and cook safely.
Some fruits and most vegtables and chicken were raised right on our own farm. 55 years ago when I was a boy there were still numerous farms around and folks making an honest living out of farming.
Those farm days are gone forever for most Americans today. Acres and acres of farmland is chopped up everyday for housing developments.
Gone with it is the lifestyle.
Let's go get a happy meal-
<< <i>I recently sold a little gold and 13 oz. of silver in August/early Sept. Even as I was selling it I questioned why I was selling. A buyer [of the silver] actually asked me "Why are you selling"?
Thinking about it; I guess I just wanted to skim a little profit at that point.
My Dad died from cancer in 1961 when there wasn't even any talk of a cure. Old Dr. Robinson told me about 20 years ago "If we knew then what we know now, we probably could have saved him. And I agree with roadrunner regarding the American diet. My grandmother blamed my Mom's American cooking for my Dad's death. My father's parents came from Finland. My grandmother boiled most meats and poultry prior to making any cooked dish. The old Scandinavians knew how to eat and cook safely.
Some fruits and most vegtables and chicken were raised right on our own farm. 55 years ago when I was a boy there were still numerous farms around and folks making an honest living out of farming.
Those farm days are gone forever for most Americans today. Acres and acres of farmland is chopped up everyday for housing developments.
Gone with it is the lifestyle.
Let's go get a happy meal- >>
OT, but I can see my Irish Grandmother cooking now, standing there in a "house dress" and apron, and the big black skillet, frying, in bacon grease, whatever it was we were eating that day.
But she made up for it with her baking.