Safe Investments

D

Danny

Thinks s/he gets paid by the post
Joined
Jul 14, 2005
Messages
2,375
Where is one to put money in these current times of financial market uncertainty about credit markets freezing up. What is safe and earns a return?

Municipals?
Treasuries?
Bond Funds?
CDs?
Utilities?
Money Market Funds?
Gold funds?
Gold bars?
Stock Funds?
Stocks?
Real estate?
?

I'm getting a little puzzled lately.
 
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Treasuries are still safe. They don't protect you from the falling dollar, and they are a poor inflation hedge (Tips for that - sort of), but at least you don't have to worry about credit risk.

Audrey
 
REWahoo said:
Don't know about you, but there is nothing remotely resembling safety when my relatives are involved...;)
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man I was going that way when I wrote it, but I thought better of it :D
 
Some CD's are FDIC-insured. I'd think that would be pretty safe, for amounts less than $100K (the FDIC max).
 
audreyh1 said:
Treasuries are still safe. They don't protect you from the falling dollar, and they are a poor inflation hedge (Tips for that - sort of), but at least you don't have to worry about credit risk.

Audrey
Click to expand...

Thats right thanks for reminding me, things would have to be pretty bad for those to go south

Want2retire said:
Some CD's are FDIC-insured. I'd think that would be pretty safe, for amounts less than $100K (the FDIC max).
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true, my concern here is that FDIC becomes overwhelmed and can't meet the need or there are no other banks able or willing to accept the transfer of the cds from the bankrupt bank
 
Define what "safe" means in your world........:)

Some folks think "safe" is a hedge fund.........:)
 
There is no such thing. The world is ending and all assets will be shreddded. So take your worthless dollars and buy ammunition, booze, and retire to the "safety" of your bomb shelter.
 
brewer12345 said:
There is no such thing. The world is ending and all assets will be shreddded. So take your worthless dollars and buy ammunition, booze, and retire to the "safety" of your bomb shelter.
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:D:D:D Folks, brewer will be warming up for Frank Caliendo, coming to a comedy club near you..check local listings for times and dates..........;)
 
Danny said:
Thats right thanks for reminding me, things would have to be pretty bad for those to go south

true, my concern here is that FDIC becomes overwhelmed and can't meet the need or there are no other banks able or willing to accept the transfer of the cds from the bankrupt bank
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I guess I was assuming that the FDIC couldn't become overwhelmed without a bail-out?

I suppose anything is possible. After all, people are talking about ending SS, which was the only thing besides death and taxes that was certain when I was growing up.

You could dig a hole in the back yard and bury a jar with your money in it. :confused: Or, buy enough property that you can grow your own food, and pay it off fully. I'm only half kidding! I don't think things will get that tough, but if they get even a little tough it would be nice to know where you are going to sleep that night, and what you are going to eat the next day.
 
brewer12345 said:
... So take your worthless dollars and buy ammunition, booze, and retire to the "safety" of your bomb shelter.
Click to expand...

those worthless dollars buying valuble ammo booze food :D
better buy that stuff now friendo!
 
Want2retire said:
You could dig a hole in the back yard and bury a jar with your money in it.
Click to expand...

That assumes our society, political system and economy are still intact. Digging up a jar full of Confederate notes that great grandma buried in the backyard in Alabama wouldn't do you much good today!
 
Danny said:
true, my concern here is that FDIC becomes overwhelmed and can't meet the need or there are no other banks able or willing to accept the transfer of the cds from the bankrupt bank
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Come on, there's $100 billion in the trust fund, and it covers a piddly $4.5 trillion in CD's............;)
 
Danny said:
I had no idea there was that much in the fund!
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You'd think they'd let loose of just one little billion for us worthy LBYM ER forum folks. :angel:

But seriously, wouldn't paying off your home be a "must" for the type of scenario you are discussing?
 
Want2retire said:
You'd think they'd let loose of just one little billion for us worthy LBYM ER forum folks. :angel:

But seriously, wouldn't paying off your home be a "must" for the type of scenario you are discussing?
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Agree! There should be a special line at the FDIC window for us.
Yes, the house is paid, although I haven't installed the moat and turrets yet. :LOL:
 
Want2retire said:
You could dig a hole in the back yard and bury a jar with your money in it. :confused:
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youbet said:
That assumes our society, political system and economy are still intact. Digging up a jar full of Confederate notes that great grandma buried in the backyard in Alabama wouldn't do you much good today!
Click to expand...

Good point! I guess you'd have to bury gold bullion(sp?), instead! :D
 
Danny said:
I had no idea there was that much in the fund!
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So, $1 in surplus for every $45 in CD's...........;)

Plus, the Treasury has up to 99 years to repay you if the banking system fails and they have to play "catch-up"..........:eek:
 
There are many risks, some visible - loss of principal, others not so visible - inflation, etc.

Trying to mitigate one risk based on "current" conditions will probably unintentionally expose you to another risk which will occur in the future.

Your best bet is to join the asset allocation thread and learn to build an allocation that is acceptable for the long haul unless you have so much money that you can avoid all risks but credit risk. Then buy US treasuries, gold bullion, and food/ammo :)

Quote:
Originally Posted by youbet
That assumes our society, political system and economy are still intact. Digging up a jar full of Confederate notes that great grandma buried in the backyard in Alabama wouldn't do you much good today!


Actually it would probably be great to have that jar from a collectors view as long as they are still in good shape.:D Wonder what the return is for the last 150 years?
 
FinanceDude said:
So, $1 in surplus for every $45 in CD's...........;)

Plus, the Treasury has up to 99 years to repay you if the banking system fails and they have to play "catch-up"..........:eek:
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It's kinda not reassuring if one looks too closely behind the curtain, through the fog and mirrors and see the system is built mostly upon trust, psychology and 1 cent on the dollar in solid backing.
 
I think a lot of people have the same question. Why your concerns are dismissed as laughable is a mystery to me.

With the caveat that I am not an investment professional and do not purport to have any special expertise that could reasonably be relied upon, my own approach has been to keep the majority of my portfolio in cash or cash equivalents (including commercial money market funds, treasury money market funds, short-term treasury bills, and some foreign hard currencies), and the rest in a mix of funds that I consider to be pretty good bets in the face of a falling dollar and a floundering stock market: foreign-denominated treasury bonds, gold/silver ETFs, and balanced stock/bond funds concentrated in the consumer staple and natural resource sectors. I also devote a small allocation to BEARX (a predominately short fund).

Here are a few of the funds that interest me at the present time:

Permanent Portfolio (PRPFX)
Vanguard Wellesley Fund (VWINX)
Vanguard Wellington Fund (VWELX)
Vanguard Life Strategy Income (VASIX)
Prudent Global Income Fund (PSAFX)
U.S. Global Investors Global Resources Fund (PSPFX)
T. Rowe Price New Era Fund (PRNEX)
PIMCO Commodity Real Return Fund (PCRDX)
Hussman Strategic Growth Fund
Lehman International Treasury Bond Fund (BWX)
Hussman Strategic Total Return Fund (HSTRX)
Vanguard Consumer Staples (VDC)
Currency Shares Swiss Francs Trust (FXF)
Currency Shares Canadian Dollar Trust (FXC)
Merk Hard Currency Fund (MERKX)

That should give you some things to look at.
 
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