cash until we KNOW the bottom has passed. We’ll know after it has gone by — leaving some of the profit on the table is inevitable; what we want to do is leave most of the risk for someone else, as well.
then, I expect interest rates on Treasuries to increase — which means shorting the bonds. [Buy puts on the futures index to limit your potential loss.]
Btw, I suspect that gold will crash when the bottom is sighted or shortly thereafter. Gold mining stocks may well crash before that — more gold mines are being opened and thus output volume is rising.
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After that, we shall have to re-evaluate and see what is worth buying.
US dollar-based system convulsing and dying. There is no reasonable investing strategy; you can only try stay out of the way — and that alone is a full time job.
Investor Strategies… easy — Stay Away From Wall Street !!!! The ymake money coming or going… that does not help us duped Investors…
It is very hard to determine a reasonable investment strategy when the rules of the game change on a day to day basis. What may work for today could be a disaster tomorrow when the Fed or the Congress or the IRS change the rules.
The latest mid-game rule change: allowing REIT’s to pay dividends with stock vs. CASH is a decision destined to end very badly, mark my words. Dilution of stock prices is inevitable and dissolvement of stock value is almost guaranteed.
How can the government continue to be so short sighted about the further damaging effects they are pushing into the financial system with all of their heavy handed machinations. This is NOT going to end well.
The best investment strategy for the short term (one year time frame) may well be to remove any and all remaining CASH from your accounts and sit on it at home. We are not earning any interest on the money anyway and it is being eaten away every day by fees and charges anyway. Let me ask you, Why would you continue to keep your money in a bank, earning nothing, when the bank is sitting on that money and WILL loan it out (eventually) to someone else and charge them interest? You are literally paying the bank to make money for itself, with your money. This is NOT a good strategy.
The stock market has proven itself, beyond a shadow of a doubt, to be the world’s biggest casino operation. The house always wins, and the players always get screwed someway, somehow. The markets are manipulated everyday, by the government, by inside trading, by hype and by hope, by the media. Why would anybody, in their right mind, choose to be in this market. The stock market is a giant PONZI scheme, much like our government is as well. Think about it and you’ll realize that the government takes money from new investors (the working people now) to pay off the older investors (the previous tax payers). It’s a PONZI, plain and simple. All perfectly legal and commonly accepted. Eventually it’ll all collapse just like Bear Stearns, Lehmans, Bernie Madoff, etc….the list will just keep getting longer.
My investing strategy: Take whatever cash you still have and sit on it. When hyper-inflation starts (and it will come, most assuredly as the Sun rises) and interest rates start to climb as they also most will assuredly do, you will be able to put your warm remaining cash into instruments (CD’s, savings) that might actually pay a decent return.
I live in hope.
Didn’t one of the Fed Reserve guys a while back, when asked what Americans should buy, replay with “gas, food and ammo”?
That sounds like a good investment strategy to me.
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I sure won’t invest in anything glamorized by cnnfn.com. Remember those “Real Estate Mogul” sections and “Millionaires in the Making?” If you are a contrarian you have to feel like this website nailed both the tech bubble and the housing bubble. I feel good that it will pick up on and promote what is coming next.
The things they haven’t promoted: Gold, Series I savings bonds, paying down mortgage. I’ll look for similarly neglected opportunities going forward.
The old adage still holds true – Don’t invest in anything you can’t explain to a six-year old.
If you don’t know what a credit default swap is, don’t invest in one. If you can’t explain what a no-load mutual fund is, don’t invest in one.
The key thing to remember is that anything can go down in price and you must maintain enough liquidity to cover yourself if your investments do go down.
Personally, I’m going to continue contributing to my 401(k), increasing the size of my emergency savings account, and maybe (if there’s money left over) buying a couple of stocks.
Well, Ben(dover) Bernanke is at it again. What can he possibly hope to achieve by having the Fed Funds rate at 1/4 or 1/2%. Meanwhile having the printing presses pushing out the Monopoly money as fast as possible. I think the bearings on the presses must be about worn out by now, what a pathetic joke. Between Bernanke and Paulson they have taken our monetary system so far down the toilet it has definitely hit the sewer pipes. Can’t wait for those interest rates to start heading for the stars because of hyperinflation. Bernanke and Paulson have turned the U.S. monetary system into that of a third world country.
Where in the hell is our Congress, can’t they put a stop to this foolishness? I know George Bush sure isn’t going to do a damn thing about any of it. We need to get some heavy industry back in America. We have proven that you can’t have an economy based on the housing market. I will say one more thing, Bernanke and Paulson are pretty darn lucky to have the price of crude oil drop like it has, that may save their a$$es in the long run. Thanks for listening to my rant.
Being at retirement age, I pulled out of stocks and placed everything into money market funds in November of 2007, right before the downward slide. I preserved all of my capital, earned an annual return 3.25% and never looked back. Had I stayed in stocks and stayed the course, as most financial planners had advised, my investments would have lost in excess of 50% of their value. I will continue with the cash strategy. I don’t have to rethink my retirement objectives, my investments are safe, liquid and on the sidelines. Depending on the timeframes, and when the investment environment improves, I may place a portion into higher paying instruments. Until then, I continue sleep well at night.
My investment strategy is simple. I pull my money from banks, keep the stuff in my safe (which is bolted to the floor and beats the heck out of a mattress) and everywhere I go I ask for CASH DISCOUNTS. For xmas it’s craigslist and thrift stores. I refuse to buy foreign JUNK and have my money make profits outside MY country.
Credit Cards and buying new are highly overrated.
As if any of the financial geniuses out there can provide any guidance worthy of their overblown salaries.
The poster suggesting high yield private mortgage market is close to my strategy, all of my money if going into distressed real estate properties, pennies on the dollar with an immediate recurring rental income for every dollar invested.
My current yield is between 5% and 10% annually based on rental rates and expectations of remaining fully leased.
Because we don’t know how long this recession will last, capital growth and preservation are the keys to 2009. This means CDs that are paying mostly between 3 to 5 % and TIPS that are paying 3 to 5 % (and the yields will rise if inflation takes off). Stocks are still speculative, as we don’t know which companies will survive; obviously, stay away from mortgage, homebuilders, finance, and automotive companies. There will be other failures. Maybe 20% might be a good allocation to stocks.
It’s easy to be optimistic, and optimism is a good thing. But, we’ve had three depressions in the history of the US, starting in 1837, 1873, and 1929. So, theoretically, we were overdue for one. Whether this is a depression or a long recession, it will be painful. It’s very important to start out with enough water to make it across the desert alive.
If you have some real money laying around invest in a private mortgage for one of the many who may be losing their homes due to foreclosure. You can screen conservatively as there are many to choose from and earn high interest payments (double digits). Because of careful screening(homeowners with 60% Loan to Value or less), if the homeowner defaults you will own a home with considerable equity. It’s a win/win if you do your homework.
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CD’s & TIPS at 3%?? Please.. I can get that with my online bank account. Give me real investment info. There is none, because the market has tanked. Unless you were smart enough to invest in gold before it doubled, you’re screwed for now.