I absolutely do not believe the government inflation numbers, but not because I’m a cynic by nature. I’m actually pretty trusting, and question things which don’t make sense. So I ask myself, how can inflation be 2%, when most things I buy are going up 10% – 20% per year: housing, health insurance, higher education, gas and heating oil, property taxes? These are the big ticket items that we all need to pay for. So what if clothes from China go down every year? That doesn’t balance it out at all, if I only spend 5% of my income on clothes? Meanwhile, I spend 75% of my income on stuff that’s going up at a pretty good clip. Now tell me, what is inflation really?

Although we are 75% in cash right now, I believe we are losing 3% annually, at least, to inflation. Oh well, at least I still have my principal, right?

I can’t do what ChrisJ did. He’s a clever trader. I’m a conservative value investor. I only lost $4K in tech stocks, because I bought Lucent after it crashed off its lofty heights, to $7/share, and then it went down to $2.50. I bought BKR.B and UPS during the tech runup. Someone like me can’t just back up a truck and expect to pile on something good. I need a long-term idea I can hold onto. For example, in 2000, I got into 6 different index funds, and I am up quite a bit. Now I want to get out of those funds, find some recession proof stocks, and diversify out of the US Dollar. I’m not a daytrader. Just a good old-fashioned buy-hold investor.