Nonsense. Dow 20k this week and then some
stock/bond mutual funds will not go totally to cash - if you want to be in cash exchange into their money market fund and wait for your entry point into whatever market attracts you then, stocks or bonds. i wouldn’t call bond funds “safe” as they adjust to rising interest rates by lower values in the near-term. it appears we will have higher rates so if you want to freeze your values, go to money market.
I wouldn’t go all cash - always diversify - but both Vanguard and Fidelity have money market and short term bond funds to choose from.
Bonds are safe? When interest rates go up, your bonds will go down in value. Buy good dividend paying companies and automatically reinvest all dividends back into buying more stock. When the market goes down, rejoice because you will be buying stocks “on sale” with your dividends.
Total financial system meltdown? Or a market “correction”?
If the former, then you need a SHTF plan - food, water, shelter, and some store of wealth. Historically, people hold gold, but I’ve always been a skeptic - you can’t eat it, burn it, or convert it to money if there’s no stability anywhere. It’s only valuable if someone else is willing to give you something else of value for it.
If you’re talking about a correction, then the closest thing to cash that you can “invest” in is a money-market fund. If you think the US government is ultimately stable, then a money-market fund that invests exlusively in T-bills is good.
Now, if you have the courage of your convictions, there are funds and ETF’s - “short” funds - that go up when the markets go down. Some are even leveraged where, for example, a 1% decrease in the stock market will get you a 2% increase in fund value.
But, all that said, market-timing (trying to pick and trade market tops and market bottoms) simply does not work in the long run. If you are concerned about the principal value of your investments, then you probably already have too much invested in risk assets. If you don’t need those funds today, in 5 years, or in 10 years (for future retirement, as an example), then you’re better off simply rebalancing your portfolio quarterly or annually to include a mix of stocks, bonds, and “safe” treasuries. A good rule of thumb is to have the stocks be a percentage equal to 110 minus your age. So, a 40-year old planning retirement at 65 would have 70% in stocks (110-40=70).
1: Figure out how much money you need.
2: Put the money you need in ten years in stocks.
3: Put the money you need in five years in quality bonds.
4: Put the money you need for the next two years in a money market account.
If you’re gonna do that, at least consider capital one 360 for 1 1/2 percent.
But I dont see a YUGE correction coming and if you’re under 55, stay in at least a little.
Warren Buffett can’t predict market turns but you can. OK.
Go long on mattress futures. Great protection against total financial meltdown.
the biggest lesson of the financial crisis is that the US government, in reality, stands behind even “uninsured” money market funds. If those were to go down in value, then it really might be “canned goods and firearms” time! That’s not going to happen. If you are truly terrified of market risk then money market funds are “safe”, but remember you’ll get a yield that’s lower than the rate of inflation if the market keeps going up you will be poorer than your peers.
Talk to your broker about Unit Investment Trusts. The contacts are usually 1 to 2 years. There’s a ton of them.
Asking for financial help online is a very bad idea. Contact Fidelity directly.
How to create a million dollar portfolio guessing the Stock Market:
1) Start with 2 million dollars
2) ...
I was at the bank with a relative who was trying to deposit over 300K that this person just received in a real estate transaction. The bank officer said that the FDIC has 100 years to pay back their "insured" amount. I heard it with my own ears but have yet found anyone who corroborates the statement.
I gave up on mutual funds years ago when it was disclosed in a market down year the average fund investor has lost $4K for the year and the fund managers had made damn near half a million! Then the great Obama declared me to be a one per center and took away my GM bond and gave it away. Chrysler bond holders did no better. Every investor must realize your broker, money/fund manager they are living off your money! I have been mildly successful investing only in dividend paying stocks and staying with them for long periods. Rule—dividend must equal or exceed inflation rate plus banks CD rate before considering company profitability.
Depending on the plan both companies usually make a money market fund available for IRA/401k holders. I’ve not trusted the market since about 2012 so I’ve missed a lot of the run up since then, but the valuations and P/Es just haven’t made any sense to me.
I’m with you I see a big correction coming, not because Trumps policies are going to have an impact; but because the banks/fed have been supporting it up till now and they will stop as they try to punish him. It’ll recover but at a slower pace then previously. Just my opinion of course.
Pfl
Ssving for later....
You very life may depend on how you invest your retirement nest egg, so I’d suggest consulting a professsional. If you want to safely invest in bonds, one option is a bond ETF like VRP.
Yes, I agree with you that a correction is coming. Likely withing the next 2 years. As many of us have watched 0bama’s minions pump million/billions/trillions of fiat digital money into the system, eventually it does have to come out of the system.
Hopefully it will be a slow contraction with a few burps along the way. I believe you are wise to moderate the current market Trump exuberance against the reality we have all discussed of the past. Many in my circles are concerned about the ongoing instability of the banks and that when the “correction” hits people will take a hit much like Cyprus did a few years ago. On that account they may be very right as Trump likely won’t bail-out the banks this time.
President Trump so far and it isn’t even the first week has shown already to be taking brilliant step after brilliant step to set in place the mechanisms to save our economy. But, and any good business person can tell, there is always a correction in every company takeover. Things get worse, or seem too, before they get better. This isn’t just some small/large company he is taking on, it is the government of the United States.
Honestly, look what industries he is throwing his weight behind. Pulling out and hoarding money isn’t the right answer in my opinion. I wouldn’t make any hasty moves right now. Just yesterday I was thinking, “Trump has done more for the American worker/economy in 48 hours than anyone has done in the last 16 years!” What the hell my mind said, ‘what the hell!’ It can’t be that easy and it won’t be long term.
None have a crystal ball, but don’t cast aside everything many here on the financial threads has worried about. The first one all the fiat currency out there. Second, go in and talk to Fidelity about your concerns.
BM to discuss with wife.