Hedging inflation.

[backhoeboogie]

Stocks crashed some yesterday. I have little at-risk. Most of my 401k is in interest bearing accounts that aren't bearing much.

Lots of folks are buying precious metals. That runs the prices up. I have probably missed an opportunity there already - or not.

Been reading a lot. Inflation is good for youngsters deep in debt. It sucks for elderly, especially the retired on fixed incomes.

I feel high inflation is just around the corner. Could be dead wrong and it could be extreme deflation.

How do you prepare for both inflation and deflation?

Everyone is talking about preparedness and how it related to Sandy. I'm totally prepared for disaster. I'm second guessing my financial preparedness.

 

[Bigfoot]

I honestly wish I had never saved one red cent in my life, and only invested in land.

 

[TexasBred]

Might look at tax free municipal bonds. AAA rated bonds are safer but pay a lower return. Right now around 3% but it's tax free so a higher effective rate.

 

[Sir Loin]

backhoeboogie


As Winston Churchill once said: The further back you can look, the further forward you are likely to see ".

I would suggest you take a look back during the times when we were in this same/similar political situation , say as under Carter, Clinton and the last 4 years and consider mutual funds that did good during those times.

IMO always go with those who have the experience over those with just book learning.

SL

 

[Bigfoot]

January 2007 was the last real growth in the stock market. It was up around 13,000 and unemployment was around 4%. Gas hadn't gone sky high either as best I remember. There was also a big party change in congress in January 2007. Been hard to successfully invest in it after that.

 

[Ryder]

Long gold/silver
Short the DOW.

 

[Caustic Burno]

Might look at tax free municipal bonds. AAA rated bonds are safer but pay a lower return. Right now around 3% but it's tax free so a higher effective rate.

My prime strategy is the same today as it has been for the last 40 years No Debt
You can loose your but in precious metals remember the Hunt's and the silver crash.
I do not feel precious metals or land is a strategy to produce income and security.
Land you have a tax burden until you sell it can set for years twice in my lifetime I have seen the bottom fall out from under land prices. There is land here purchased here during the S&L boom that still hasn't got back to what people paid.
I have been heavy in insured bonds lot paying 5% to 6%. I like tax free unit bond trust.
I also have invested in insured annuities.
Bond's are a long haul investment strategy.
My number one rule never invest more than you are willing to loose.

 

[TexasBred]

My number one rule never invest more than you are willing to loose.

Amen....as they say "scared money never wins". We went out on a limb and financed homes for the children. Still got "risk" but also made sure they put a substantial personal investment of their own money in it. Almost no closing cost and competitive rate.... I figure if they default, I can have them deed the property back to me, throw them out and find some good renters. :lol2: :lol2: Will have a good write-off on rental property too.

 

[greybeard]

I consider myself an experienced investor and I've made a good bit of $ in stocks over the decades, investing only in products and services EVERYONE needs and uses every single week--been in it since I was 18. Made enough that I fully retired @ age 59--but I ain't no millionare either. Even made $ in the bear market, but kept looking at the way things are going now and finally cashed out last June. Still have 1 tax deferred guaranteed return annuity but that's it. Taxman hit hard on divesting the stocks, but I'd rather have most of it in my hand nowdays than watch it all go down the tube. Dow lost 313 yesterday, another 100 pts today.
I'm glad I don't "have" to watch it anymore.

Got more land than I can care for at my age now and when you live in a county with lots of Govt land and not many residents, taxes are high even with ag exemption.

 

[Caustic Burno]

My number one rule never invest more than you are willing to loose.

Amen....as they say "scared money never wins". We went out on a limb and financed homes for the children. Still got "risk" but also made sure they put a substantial personal investment of their own money in it. Almost no closing cost and competitive rate.... I figure if they default, I can have them deed the property back to me, throw them out and find some good renters. :lol2: :lol2: Will have a good write-off on rental property too.

Been there at one time I owned five homes, sold one to one of the kids.
The liabilities of upkeep, taxes, etc. made me rethink that strategy and sell down to two.
The only real security is being debt free otherwise you are just renting and someone can come and get it.
If you are not carrying debt you can live really cheap, secondly you have to cure the I want's.
I firmly believe everyone should have at least two years salary sitting in the bank.
Financial security comes from what you save and own not in what you make.
It is not what or how much you make it is how you manage it.

 

[Caustic Burno]

I consider myself an experienced investor and I've made a good bit of $ in stocks over the decades, investing only in products and services EVERYONE needs and uses every single week--been in it since I was 18. Made enough that I fully retired @ age 59--but I ain't no millionare either. Even made $ in the bear market, but kept looking at the way things are going now and finally cashed out last June. Still have 1 tax deferred guaranteed return annuity but that's it. Taxman hit hard on divesting the stocks, but I'd rather have most of it in my hand nowdays than watch it all go down the tube. Dow lost 313 yesterday, another 100 pts today.
I'm glad I don't "have" to watch it anymore.

Got more land than I can care for at my age now and when you live in a county with lots of Govt land and not many residents, taxes are high even with ag exemption.

I have ran a lot of stock through the Wall Street salebarn through the years.
It is not for the faint hearted . Again never invest more than you are willing to loose or leave invested for the long haul.

 

[Ryder]

Long haul investing is the worst gamble you can make.
Brokers that preach this long haul investing should be counted as criminal.
They were no doubt using this same line in '29. Along with saying the market goes down but it always comes back up. :bs: They don't say how long it can take, if (?) it does.
Look at where the market topped in '29 and how long it took to get back to that level.
As far as fixed income stuff inflation can eat your lunch before you can see it.
We have not even seen inflation work its way through the system yet from all this QE business.
Same with saving money. Inflation can simply destroy it.

This is a trader's world. Not an investors.

 

[greybeard]

Depends on the stock(s) Ryder--depends on the stock--and what one's definition of "long haul" is. Also depends on a person's appetite for trading. Take a good fundamentally sound company, buy it when it's beat down, sell when it is high (maybe once/year) hold that profit and do the same thing again when it's down again, and you can see results that will beat any CoD, money market, 401 or IRA. Drip the dividends.
Day trading--did some in 2010. Worked out ok, but man you gotta stay on top of a computer constantly. Be out closing bell friday, and SEC rules are different if you day trade OTC. A limit of only 3 round trip (buy/sell) trades/5 day period or you lose trading privliges. SEC watches that pretty closely too.
But, I ain't recommending anything right now. If fiscal cliff comes true, watch for another downgrade of US debt.

 

[Workinonit Farm]

Financial security comes from what you save and own not in what you make.
It is not what or how much you make it is how you manage it.

:nod: :nod: :nod:

Katherine

 

[Ryder]

Financial security comes from what you save and own not in what you make.
It is not what or how much you make it is how you manage it.

:nod: :nod: :nod:

Katherine

No. Does not come from what you save.
$$ is a deflation hedge. Not for inflation.

 

[highgrit]

I have made more money with land than I ever did working. And there still is money to be made on land. We still hold paper on three
houses and some property. I been working on a living trust for my kids. And as soon as it's finalized my wife and I are going Gault.
I can't figure out why folks would ever let other people look after their money. Never owned a stock and never will.

 

[Caustic Burno]

Financial security comes from what you save and own not in what you make.
It is not what or how much you make it is how you manage it.

:nod: :nod: :nod:

Katherine

No. Does not come from what you save.
$$ is a deflation hedge. Not for inflation.

Maybe not Ryder sure has worked for me.
I started out a common laborer that climbed the corporate ladder through hard work and conservative investing and saving I am very affluent today.

 

[Caustic Burno]

I have made more money with land than I ever did working. And there still is money to be made on land. We still hold paper on three
houses and some property. I been working on a living trust for my kids. And as soon as it's finalized my wife and I are going Gault.
I can't figure out why folks would ever let other people look after their money. Never owned a stock and never will.

The thing is everything is worthless in an economic collapse except what you can defend and pay taxes on.
Before the depression my Great granfather was the largest landowner in the county,
after he had a little over a section,he started out with 9 sections.
Got to the point he had to sell at a loss to pay the taxes. You don't own land you rent it from the county, state if you don't believe that stop paying your taxes on it.

 

[cross_7]

I have made more money with land than I ever did working. And there still is money to be made on land. We still hold paper on three
houses and some property. I been working on a living trust for my kids. And as soon as it's finalized my wife and I are going Gault.
I can't figure out why folks would ever let other people look after their money. Never owned a stock and never will.

The thing is everything is worthless in an economic collapse except what you can defend and pay taxes on.
Before the depression my Great granfather was the largest landowner in the county,
after he had a little over a section,he started out with 9 sections.
Got to the point he had to sell at a loss to pay the taxes. You don't own land you rent it from the county, state if you don't believe that stop paying your taxes on it.

that is a true statement and i'd add your deed is only as strong as the government
explain to china that you bought that land and show them your deed

 

[highgrit]

C.B. I know what your saying. Got our tax bill in for a piece of commercial property we lease out. Just over $50,000.00 this year, that is crazy. Oh well we have had the same leasee for 34 years. And I know we are lucky and Blessed. But that's out of control.