Are you more risk averse now?

[picpoule]

Am I more risk averse now? You bet I am. I own no stocks — haven’t since 2001. I have cash, and soon will be getting a bundle more due to a legal settlement. And I have NO IDEA what to do with that pile of money to come. I just know I want to preserve what I have. I have two years to retirement. CDs don’t seem a good way to go — have to pay tax on what you earn and I don’t think the rates are beating inflation. I feel like I’m hunkered down in the foxhole.

[picpoule]

Am I more risk averse now? You bet I am. I own no stocks — haven’t since 2001. I have cash, and soon will be getting a bundle more due to a legal settlement. And I have NO IDEA what to do with that pile of money to come. I just know I want to preserve what I have. I have two years to retirement. CDs don’t seem a good way to go — have to pay tax on what you earn and I don’t think the rates are beating inflation. I feel like I’m hunkered down in the foxhole.

[bsrsharma]

If you have several 100K $, you may want to diversify your currency even if you want to remain in cash. A good mix of GBP, EUR, Yen, CHF (Swiss Franc), Canadian $ etc., may be better than all USD. Expect severe devaluation of USD due to balance of trade, credit risks, budget deficits etc.,

[bsrsharma]

If you have several 100K $, you may want to diversify your currency even if you want to remain in cash. A good mix of GBP, EUR, Yen, CHF (Swiss Franc), Canadian $ etc., may be better than all USD. Expect severe devaluation of USD due to balance of trade, credit risks, budget deficits etc.,

[one_muggle]

picpoule, merely a suggestion, but you might look for tax free bonds and/or stashing a little bit each month over the next year or three into safe harbor stocks, like KO, JNJ, BUD or UFCS (examples, NOT specific recommendations). These type have global reach, are fairly steady (most days–not today ;^) )and/or generate a decent dividend (taxed at 15).
Even though you are retiring in two yrs, money that you plan to need 10 yrs from now is still typically game for stocks.

IMHO right now is not the time to dump your money into stocks, but with the dollar cratering, you might want to consider slowly dribbling money in during this bear market rather than sitting on it all. It is nearly impossible to time or measure the exact bottom or top. Better to pick good companies or index funds and invest long with dollar cost averaging.
One last suggestion, if you really don’t know what to do with the cash, hire a professional FOR A FLAT FEE, not a percentage, to explain your options. (If you work for a large company, your retirement fund company for 401k/403b or the like will have seminars every few months. They typically steer you to their own products, but mine at least tells you other options.
Finally, websites like clark howard or motley fool have free and fee info sites that are helpful.

Good luck.
-one muggle

ps. Ditto bsrsharma–but that is too complicated and scary for me. I sleep better buying foreign stocks to leverage off the weak dollar.

[one_muggle]

picpoule, merely a suggestion, but you might look for tax free bonds and/or stashing a little bit each month over the next year or three into safe harbor stocks, like KO, JNJ, BUD or UFCS (examples, NOT specific recommendations). These type have global reach, are fairly steady (most days–not today ;^) )and/or generate a decent dividend (taxed at 15).
Even though you are retiring in two yrs, money that you plan to need 10 yrs from now is still typically game for stocks.

IMHO right now is not the time to dump your money into stocks, but with the dollar cratering, you might want to consider slowly dribbling money in during this bear market rather than sitting on it all. It is nearly impossible to time or measure the exact bottom or top. Better to pick good companies or index funds and invest long with dollar cost averaging.
One last suggestion, if you really don’t know what to do with the cash, hire a professional FOR A FLAT FEE, not a percentage, to explain your options. (If you work for a large company, your retirement fund company for 401k/403b or the like will have seminars every few months. They typically steer you to their own products, but mine at least tells you other options.
Finally, websites like clark howard or motley fool have free and fee info sites that are helpful.

Good luck.
-one muggle

ps. Ditto bsrsharma–but that is too complicated and scary for me. I sleep better buying foreign stocks to leverage off the weak dollar.

[Mr_Brightside]

I’m short homebuilders (have been for 2+ years), mortgage and some fixed income including leveraged bank loan ETFs like FCM. I do have a treasury short that’s not doing well as it was an inflation trade that’s getting beat up by the flight to quality. Can’t win them all.

I have an account that actually pays interest on short balances which has been a nice addition to the return in the account. I do have other stocks which are long term investments that I’ll probably never sell as well as foreign investments via mutual funds in retirement plans. Pretty well setup for a down market.

[Mr_Brightside]

I’m short homebuilders (have been for 2+ years), mortgage and some fixed income including leveraged bank loan ETFs like FCM. I do have a treasury short that’s not doing well as it was an inflation trade that’s getting beat up by the flight to quality. Can’t win them all.

I have an account that actually pays interest on short balances which has been a nice addition to the return in the account. I do have other stocks which are long term investments that I’ll probably never sell as well as foreign investments via mutual funds in retirement plans. Pretty well setup for a down market.

[Bubblesitter]

It is looking to be an another interesting week on Wall Street.

I wonder which surprises we’ll see from Hedge funds, lenders, homebuilders and others. Does anybody know how many employees Accredited Home Lenders (LEND) has in San Diego? This one is another strong candidate for bankruptcy and liquidation. What are the odds that the acquisition actually going thru given their significant stock collapse?

[Bubblesitter]

It is looking to be an another interesting week on Wall Street.

I wonder which surprises we’ll see from Hedge funds, lenders, homebuilders and others. Does anybody know how many employees Accredited Home Lenders (LEND) has in San Diego? This one is another strong candidate for bankruptcy and liquidation. What are the odds that the acquisition actually going thru given their significant stock collapse?

[Bubblesitter]

It is looking to be an another interesting week on Wall Street.

I wonder which surprises we’ll see from Hedge funds, lenders, homebuilders and others. Does anybody know how many employees Accredited Home Lenders (LEND) has in San Diego? This one is another strong candidate for bankruptcy and liquidation. What are the odds that the acquisition actually going thru given their significant stock collapse?

[Bubblesitter]

What a day on Wall street and the European exchanges. Tonight I’m watching the credit worries hit the Asia markets. The markets have been on a real roller coaster the past few weeks. In my opinion, the near/mid term upside potential for stock market is extremely poor. For those still on the coaster, you are in for a rough ride.

Are you folks reading Bloomberg? Businessweek? Marketwatch? Look what is going on! Nearly EVERY STORY is about the Credit Crunch, housing woes, etc. I talk to many folks who are completely unaware of what is going on. The average Joe seems to be oblivious to what is going on and the impact on his life. He will continue to be oblivous one day he notices his ARM resets, unable to refinance he goes into foreclosure. In 10 years, we will probably all look back and say “it was so obvious, how did we miss the elephant in the room?”

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.pPEmZeZZCk&refer=home

[Bubblesitter]

What a day on Wall street and the European exchanges. Tonight I’m watching the credit worries hit the Asia markets. The markets have been on a real roller coaster the past few weeks. In my opinion, the near/mid term upside potential for stock market is extremely poor. For those still on the coaster, you are in for a rough ride.

Are you folks reading Bloomberg? Businessweek? Marketwatch? Look what is going on! Nearly EVERY STORY is about the Credit Crunch, housing woes, etc. I talk to many folks who are completely unaware of what is going on. The average Joe seems to be oblivious to what is going on and the impact on his life. He will continue to be oblivous one day he notices his ARM resets, unable to refinance he goes into foreclosure. In 10 years, we will probably all look back and say “it was so obvious, how did we miss the elephant in the room?”

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.pPEmZeZZCk&refer=home

[Bubblesitter]

What a day on Wall street and the European exchanges. Tonight I’m watching the credit worries hit the Asia markets. The markets have been on a real roller coaster the past few weeks. In my opinion, the near/mid term upside potential for stock market is extremely poor. For those still on the coaster, you are in for a rough ride.

Are you folks reading Bloomberg? Businessweek? Marketwatch? Look what is going on! Nearly EVERY STORY is about the Credit Crunch, housing woes, etc. I talk to many folks who are completely unaware of what is going on. The average Joe seems to be oblivious to what is going on and the impact on his life. He will continue to be oblivous one day he notices his ARM resets, unable to refinance he goes into foreclosure. In 10 years, we will probably all look back and say “it was so obvious, how did we miss the elephant in the room?”

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.pPEmZeZZCk&refer=home

[bsrsharma]

“average Joe seems to be oblivious..”

And will remain so. Some one said: It is Recession when your neighbor loses his job; It is Depression when you lose your job. Till unemployment crosses 5% it is good time. At 6% it is worrisome. At 7%, all hell breaks loose.

[Author]

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