I got a bad feeling about this year. Maybe I am to influenced by the doomsayers, but I don't think the rect climb out of the Dow marks the end of the bottom. I think the housing problem will get worse before it gets better, oil will stay high for the near future, and the effects will continue to beat up banks and the rest of the financial sector.

Getting to the point, I see a bear market and poor performance in bonds as well over the coming year. Maybe longer. And if home prices retreat substantially, consumer spending will go into the tank even further.

I have decided to drastically reduce my savings rate and plan to keep some in cash and get rid of some smaller debt. (the balance of a car loan and about $3000 in a home equity loan). Outside of the car and HE loan and mortgage, I have no debt. I am considering rebalancing my retirement accounts to safer investments, but have not done so yet. It still has quite a bit of small cap, international and such.

I was on pace to put 25% of my gross away this year, pulled back to a rate of about 17% (10% is enforced by my employer). I think using my cash very conservatively until after the November election is over is what I would like to do.

Just feeling some bad juju, and want to have any monthly payments on the small stuff gone in case something drastic happens, even though my consumer loans have an effective rate of about 4%.

Am I getting irrational or does anybody see a long economic downturn? I have not quite built a doomsday shelter stocked with MRE's, but its getting closer. (and I am not in danger of losing my job) Anbody else in the same boat or want to talk me off the ledge?

 

Eliminate debt first, then start investing even more into the market as it nosedives. It WILL come back and when it does, you'll have bought at some cheap prices. Always buy quality.

 

I do most of my investing through work and funds are limited, but the upside is virtually no tranaction or management fees. They are limited to $35 per year regardless of balance. There are some good funds, not tons to choose from. I do this to go pretax and save in the long run on broker fees.

But I can choose between a couple international, a couple small cap, a couple midcap...etc.

I plan to ramp my savings back up in the future, I just am skeptical we have hit bottom, and that bottom could be closer to 11,000 dow rather than 12,000 if the market panics.

 

Ouch. Not to add uneeded drama. Phone just rang, my sister (divorced mother of two) just got laid off. Ouch. That does not make me feel better about the economy. She will probably need family members to shoot her a few bucks in the next few months.

 

Cash is king right now as long as it isn't US cash

 

Even the most frightened should own a little gold I'd say. I'm up 10% in the last 30 days in a choppy market with very low risk IMO.

Otherwise there is nothing wrong with putting more towards a high yield savings account vs the stock market if you aren't emotionally fit to play the game. If you have limited fund choices I'd be more tempted to do it so I understand your POV.

We are on shaky ground. Energy is high, real estate is damaged, credit is on edge, productivity is low, and there is a decent probabilty inflation could surge. If it does, you won't need to call yourself a 'doomsdayer', just a realist.

My long equity exposure is as low as it's ever been outside of bullion and a few selected securities, none of which are longer term.

 

Indeed. A very wise strategy.

 

 

^ Dude your .GIF is ####ed up.

 

Mine? That is the satellite shots of the 'Perfect Storm'......based on the movie.

The Head in the pavement is very appropriate for the economy though....