http://www.cnbc.com/id/48159304?__source=yahoo|headline|quote|text|&par=yahoo
more munis bankrupcies?
http://finance.yahoo.com/news/california-bankruptcies-only-beginning-091700433.htmlLast year, we thought Europe would be a 'bump' on the road, but now it seems to be much worse. I am very concerned. Thinking heading toward more cash, I think I've linked another article last wk that average MF cash positions are ~ 4-5%. Even Buffett is thinking EU cannot solve their problems.
China also is slowing down. US would probably personally I think we would be would be flat for the next 2-5 yrs. Do you folks think we are indeed heading toward another cliff/crash? Would you folks thinking or going into more cash?
thanks
Comments
We each have to filter what we read and hear to attempt to obtain a better understanding of relationships with all financial situations and what impacts may be present today; and going into the future for the next 6-12 months and longer. This is all part of the learning experience that is part of whatever area one is involved.
As to cash. Our cash has been some form of bonds for the past 4 years. If one is not comfortable with bonds, then a cash type holding from available choices may satisfy your protective needs.
How much and when is always the question, regardless of the investment sector. I don't know of anyone who can exactly determine a comfort level for any investor. This is an individual decision based upon many numerous factors, yes?
If you want the ultimate challenge; consider that a 529 plan (educational savings plans) allow 1 switch of investment allocations per calendar year. Whatever sectors are invested currently, are in place until January of the next year. Whatever choices are on the plate is fully exposed to market changes without benefit of performing changes. Lots of fun with this decision area.
Our daughter's current allocation is 50% each to VITPX and VBMPX. Our house surely can't guess the market directions and as noted; we can't change the investment mix again this year; so, we are "stuck" with these choices. Other plan choices are sm. and mid cap, int'l equity, short term bond and MM. So, we have "guessed" a bit. We are focusing on U.S. larger cap and a kinda broad based U.S. leaning bond fund. YTD, the combo is at +5.55%. If not much changes for the remainder of the year, the annualized return would be about 10.25%. Those who may obtain such an annulized return should buy themselves a most fine dinner, at the end of the year.
If you think the cliff is directly in front of your investment road, or a crash is coming, you will have to make decisions today, yes?
Starting with moving equity pieces 20% at a time and watch for a month or whatever time frame you choose. Where to move these monies to will be another choice. If you are wrong, you won't likely have much of a return on your monies; and if you are correct, you will have a smile on your face at the end of the year or in a year, eh?
This is the nature of the investment beast. Those who do not invest at all never have these concerns or worries. They also may not obtain the benefits of growing hard earned monies going forward. This is the most basic form of risk and reward.
Not unlike the legal reminders with many investments: Not FDIC insured, your investment may lose value, etc.; there are also folks who have to ask themselves whether they are suited to dealing with and making their own investment decisions. This is another aspect of the investment comfort zone.
Take care,
Catch
You noted: " don't know if buffett is reading in MFO, he is 10x smarter than all of us combined."
>>>>> I have not agreed with his rosy predictions for 2 years, as well as others of note. I do believe some of them still don't see the small details that continue to cause problems with our economy, let alone the "cranially-rectally" impaired folks in D.C. He (the company) indeed has more money than we; with which to assume market positions and related that are beyond the vast majority of investors.
"you hit it on the nail there, you definitely need to put cash especially in govt run bonds, probably best vehicles on the planet [like RCS]"
>>>>> Everyone will have to decide for themselves as to what type of bonds they favor, if they choose to hold bonds at all; and gov't. bonds are good until they are not. I don't know what RCS indicates.
"... FDIC banks may also belly up [remember 2008]"
>>>>> Then, you expect an equity market crash again that would be hard enough to affect the large banks?
Regards,
Catch