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Where to put your money? not a gold/silver thread

3K views 12 replies 9 participants last post by  Falken 
#1 ·
Ok, so lets say that we have another 2008/9 type crash coming up. Where do you put your money? Please exclude PM's as I already hold a good position in those.

In short, I am trying to avoid losing 50% of my money (although I did make all of it back) like in 08/09

This is through my 401k so the choices are basically:

International companies
Bonds
Money market
Telco/Tech
Restate funds


Looking for some helpful guidance.

Thanks in advance.

V.
 
#3 ·
If you think we've got another crash coming up, I'd either pull it out to money market / cash and hold until you think it's near / at the bottom and then start buying again. I'm actually buying REITs at the moment, though I'm only 30, so retirement isn't in my near future. Outside of the stock market, I'm buying real estate and building my business - a farm located close to the city. People will always need somewhere to live (rental housing) and they'll always need to eat. :)
 
#4 ·
FDIC backed instruments are the only 'safe' bet at the moment. All other's pose some risk of losing capitol.

401's won't let you get creative like inverse funds.

I have increased my FDIC insured cash positions. Hedged with some inverse funds, plus, I've held onto fundamentally strong stocks that pay dividend's and I hope to ride out the storm. I'm 'overweight' in Energy sector.
 
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#6 ·
I'm not an adviser.. but you might consider:

Since you are already heavy into PMs, you would probably have the likely long-term inflation scenario covered.

As an addition to that sort of position, International businesses in countries with reasonably strong currency / positive sovereign debt situations (e.g., Australia) are attractive. While their business would suffer given a serious collapse, their assets would be worth well more than those denominated in EUR or USD and would give you time to transfer your money out of the 401k if needed.

As a hedge to that, think about holding cash. Two schools of thought on this: don't trust the gov't or institutions = buy a safe and a rottweiler; have some degree of trust in the system = put it into FDIC insured mmkt funds. This way, if you see a near-term deflationary situation (which some predict due to the collapse of credit), you will be able to use this cash to buy hard assets at their cheapest.

Good luck!
 
#7 ·
Interesting thoughts... Im 33 so retirement is FAR FAR away... I dont know if I am cut out for the farm business but I am looking at some real estate opportunities...

Im really only about 5% PM's but its all physical. I can transfer about 60% of my 401k in to an IRA that would have a lot more options but I dont know if I truest my self to make the right choices. I believe what I believe but I dont know that I understand enough about investing to make the right choices.

I do agree on cash. I moved about 40% of my investments in to basically a money market a few weeks ago and probably saved my self a few dollars.

I do like energy/oil right now. It seems like it was meant to go back up and I expect that we will go up another 50% should anything go down in the middle east. Also I've been keeping a close eye on the pipeline deal that is suppose to go from Canada via Dallas to Houston. That could provide some interesting opportunities around DFW...

Thanks everyone!
 
#8 ·
You show wisdom for your age. " A little bit of knowledge is a dangerous thing."

I think you have a wise spread. But what do I know.
 
#9 ·
Nothing is more secure than utilities. Think of the customer: He will pay the electric bill even when he is hiding his car from the repo man, defaulted on all his loans and is waiting for the bank to reposess his house. Even after he loses his home, he will pay the electric bill on his next apartment. There is not a huge profit in utilities b/c most are regulated, but as long as the population expands, there will be an ever-increasing demand. You may not make a killing, but utility companies do not take losses. They simply raise the rates to keep in business.

Only food is more crucial, but food expires and their futures' fluctuates.
 
#11 · (Edited)
Utilities are usually solid, but they have so many EPA and utility commission rules to skirt, and they get sued almost on a daily basis. Their legal departments are monsters. You can say the same about big oil, but they have much much more money.
 
#10 ·
I guess it depends on the stage of life you're at. Retired with a pile of money, then your challenge is really where to protect it.

Middle-aged, in debt, under-employed, then your challenge is how to earn it in the first place.

But I've found that the best way to "put" money is to put it to work. Consider buying/selling. Dabble in cars, boats, motorcycles, airplanes, whatever your budget. I wouldn't necessarily "put it" somewhere statically, I'd put it to work dynamically. And money instruments managed by unnamed managers for big investment firms is low on my list of places, even if I had much beyond my debts to park.
 
#12 ·
I am grateful to the OP for starting this thread and to everyone for their inputs.

I am often wondering the same thing, especially about how to invest in utilities.

I am hopefully a far way off from retirement, and my sole experience has been mutual funds and money market funds.

Thanks for the suggestions, please keep 'em coming! :)
 
#13 ·
Re: utilities

I tend to disagree that they are very safe plays for a recessionary environment. The demand for utilities is largely driven by the economy. A rule of thumb for electricity demand would be:

33% industry
33% commercial / public
33% residential

This varies quite a bit by location, but to give you a solid example, see here (it's actually worse than the split above):

British Columbia Electricity Demand

If the economy shrinks, yes, people will continue to heat, light, and cool their homes. However, the majority of the demand will begin to shrink as the economy does. Residential consumers will bear the some of this through price increases, but those generally don't happen overnight, and people will begin to cut back on usage. Overall profitability of utilities will shrink IMHO.

If you're planning on a recessionary environment, think about pharma & medicine, discount retailers, vice (tobacco, liquor), etc.
 
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