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Post by wildhorseluvr on Jun 19, 2022 1:24:59 GMT
Most people seem to think we’re heading for a recession or depression, I keep hearing more and more about stagflation. So what would a person do differently in that case as far as investments, etc.?
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Post by Ozarks Tom on Jun 19, 2022 12:09:11 GMT
For one thing, I'd stay away from the stock market, it's just begun it's fall.
The problem is, just leaving money in a bank, where it's drawing no interest, but losing value due to inflation, also leaves it vulnerable to the Dodd-Frank law saying that money is really the bank's, and you've just lent it to them in case of a crash.
Just a personal opinion, and I wouldn't want anyone to think I'm some kind of financial guru, is having a healthy share of any excess funds in precious metals is the safest move. There are premiums to pay both buying and selling, but by all appearances the inflation rate is going to overcome those penalties.
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Post by Jolly on Jun 19, 2022 12:27:43 GMT
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Post by wildhorseluvr on Jun 21, 2022 20:00:02 GMT
Thanks. I’ve got a call in to my financial guy to discuss things with him.
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Post by Ozarks Tom on Jun 21, 2022 21:27:39 GMT
wildhorseluvr, There's one investment vehicle I'd run, not walk away from, and that's annuities. It's the biggest commission product on the market, and your money is untouchable without a tremendous penalty. Plus, you're trusting the guaranteeing party will remain solvent no matter the economy.
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Post by Ozarks Tom on Jun 21, 2022 23:21:59 GMT
wildhorseluvr, I keep coming up with these things I wouldn't do, but since you have a financial advisor, and hopefully he's got your best interests at heart, he might just agree. After annuities, municipal bonds are a cash cow for financial advisors. There's a good reason municipal bonds vary in interest paid, the highest interest is paid because those cities are the most under water in pension funds, and the most likely to default leaving their bond holders with nothing. Back many years ago when we were moving a 401K to an IRA, and decided to get some professional advice, so we got with a financial advisor. The first thing he pushed was an annuity - I told him "that's strike one, what else ya got?" Then he started pushing California municipal bonds - I told him "that's strike two, if you don't have better advice than that, with strike three we're out of here." Surprise, surprise, he had some low-risk, medium return vehicles available even though they paid somewhat less for him.
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Post by wildhorseluvr on Jun 21, 2022 23:39:48 GMT
Ozarks Tom, my glitchy brain can’t recall what my money is invested in…mutual funds? 🤷🏻♀️ I know it’s not annuities, it’s a very safe old fund that has never failed to pay out, part of which is reinvested and the rest in cash. My financial guy stays way on the safe side with my investments. He told DD not to invest now, he wants to hold off until things are bottoming out (6 mo. or longer), then have her stick her toe in the water with very small investments. So far he’s done well for us, I’m just in super cautious mode given how shaky things are at present.
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Post by Jolly on Jun 22, 2022 12:52:58 GMT
There are mutual funds that focus on TIPS, offered by various firms such as Vanguard or T. Rowe Price. They are supposed to protect against sudden surges in inflation, but even those are down in this market.
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Post by Jolly on Jun 22, 2022 12:56:11 GMT
And...I've talked about this before, but for a lot of interesting discussion on investing and just general money issues, I like Bogleheads... www.bogleheads.org/
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