Diversifying isn't a bad idea, just make sure you're diversifying in a way you can handle. Sure, bonds and CDs might be good against downward pressure but what happens in the case of hard inflation like we're seeing now?
What do I do with my Cash? As long as it is in a safe account, Nothing. But it gives me incredible leverage flexibility when I need to get things done. I have stated in the past I will use my wealth as a shield against those that would do harm. And like you I live modestly.
Ur a fagWhat do I do with my Cash? As long as it is in a safe account, Nothing. But it gives me incredible leverage flexibility when I need to get things done. I have stated in the past I will use my wealth as a shield against those that would do harm. And like you I live modestly.
I've been there and done that and now I'm going to enjoy my life, because over the years I've earned enough tangible assets to make this happen. I plan to buy my last house in CASH... I then will buy my 1962-63 Lincoln with the suicide doors with cash as well. Both are Tangible assets and given time both will go up in value as well.
Work hard when you are young.... Work easy when you are old. I'm working easy now
IMHO you have to have a certain amount of cash to do things. As stated before I'm 65% income investments, 30% Cash, 5% Stocks. With Cash I can immediately buy more income investments or play the stock market or if there is an emergency I have it NOW. If I was younger it would have been 50% income investments 20 to 25% cash and 20 to 25% stocks. Age does play a critical point in investing.
When you are young you have the flexibility of youth. That is why I am HYPER Critical of people wasting their time and money away on things they DO NOT NEED BECAUSE THEY WANT IT NOW...
Next, I have "Oh Shit" Money I keep a small percentage on hand to deal with those emergencies that require cash. Yea I got great credit and that is used only as backup as I do not like credit card debt or any financial debt that does not benefit me. A good example of a good debt is taking the interest off of your mortgage for tax purposes.
Now the Stocks. I see no problem people playing this game. And I suggest you have a very diverse portfolio when you are dealing with stocks. If you are young (under 55 years of age) then go for it. You can be a bit riskier if you have money to play the stocks in your 30's to 40's, so if you take a loss you can recoup it later via time.
Just don't get fucking greedy. I've seen that happen too many times when they invest on the "sure" thing.
Right now at my age I have to be more conservative in what I do. 13 years ago I took a chance and got in and purchased some investment property and sweat equality it like I have done the rest. And it paid off handsomely.
My stocks ATM are Energy.
Thank you for this reply. My husband made some shrewd decisions like you and he's also a frugal SOB - I know what to look for in a partner! My stock portfolio survived the 2008 and I can wait out whatever is going on for a couple decades with my boring as hell holdings, so I think we've got a nice combo of assets for when it's my turn to retire.What do I do with my Cash? As long as it is in a safe account, Nothing. But it gives me incredible leverage flexibility when I need to get things done. I have stated in the past I will use my wealth as a shield against those that would do harm. And like you I live modestly.
I've been there and done that and now I'm going to enjoy my life, because over the years I've earned enough tangible assets to make this happen. I plan to buy my last house in CASH... I then will buy my 1962-63 Lincoln with the suicide doors with cash as well. Both are Tangible assets and given time both will go up in value as well.
Work hard when you are young.... Work easy when you are old. I'm working easy now
IMHO you have to have a certain amount of cash to do things. As stated before I'm 65% income investments, 30% Cash, 5% Stocks. With Cash I can immediately buy more income investments or play the stock market or if there is an emergency I have it NOW. If I was younger it would have been 50% income investments 20 to 25% cash and 20 to 25% stocks. Age does play a critical point in investing.
When you are young you have the flexibility of youth. That is why I am HYPER Critical of people wasting their time and money away on things they DO NOT NEED BECAUSE THEY WANT IT NOW...
Next, I have "Oh Shit" Money I keep a small percentage on hand to deal with those emergencies that require cash. Yea I got great credit and that is used only as backup as I do not like credit card debt or any financial debt that does not benefit me. A good example of a good debt is taking the interest off of your mortgage for tax purposes.
Now the Stocks. I see no problem people playing this game. And I suggest you have a very diverse portfolio when you are dealing with stocks. If you are young (under 55 years of age) then go for it. You can be a bit riskier if you have money to play the stocks in your 30's to 40's, so if you take a loss you can recoup it later via time.
Just don't get fucking greedy. I've seen that happen too many times when they invest on the "sure" thing.
Right now at my age I have to be more conservative in what I do. 13 years ago I took a chance and got in and purchased some investment property and sweat equality it like I have done the rest. And it paid off handsomely.
My stocks ATM are Energy.
Agree with you on your comments. The biggest thing that I have seen is the short term mentality on everything. It just does not work. It has been proven it just doesn't work... however people these days are so integrated to social media that they are lemmings to whatever influencers/corporations say to them.
The closest analog is probably late 60s-mid 70s lost decade of stagflation. But the Fed rate wasn’t zero going into it. If they follow the interest rate regime of that era it would control inflation at the cost of popping the asset price bubble. If they keep rates the same it might lead to uncontrolled inflation, or maybe not if the economy magically fixes itself (not likely given world events). Perhaps price controls could stem the bleeding, but the effects of that could be worse than the other alternatives. Or something even more drastic, like a redenomination of the dollar…
Thoughts on Zoltan Pozsar's comments on "Bretton Woods III"?
Cash is great when there's a liquidity crunch, like in March 2020, because you can use that cash to purchase great stocks at firesale prices. The monetary policies of our governments make holding cash disadvantageous since they try to keep inflation at 2%. It's especially bad now with inflation being 6-10%. Your strategy of paying houses/cars with cash is bad advice, at this moment, because inflation is something you want when you have debt. Buying with cash is something you do with high interest rates. You can thank the federal reserve. I expect high inflation for the rest of the year, but will be watching the fed for surprise actions. (Their default seems to be follow the 2-year treasury.)
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Unironically why I am holding GALA Tokens and video gayme stonks. Even if the world burns retards will still blow their rent money on neon pixels
Inflation targeting is a relatively new invention from the 1990s; recall that the marginal repo rate in the 80s was like 20%, but the real rate was, of course, much lower. Historically, it floated anywhere between 5 and 20% until the Fed implicitly started targeting inflation (and explicitly since 2012).
Price controls at this point would cause absolute chaos. You'd end up with Soviet-style corruption, a massive surveillance state to enforce it and more black markets than you could shake a stick at. This isn't the 1970s; we are a country that barely produces anything except video games, tv shows and shitty app startups...you can put all the price controls you want in place, but suppliers won't be able to compete for imports anymore and you're going to end up buying gas from the mafia for $50/gallon.
I agree with the weaker dollar, but China fucks with its currency, which is a shame because they really don't have to at this point--they have the manufacturing and population base to support a reasonable value. China also doesn't respect WTO rules, meaning its government can fuck with whatever country attempts to use it as a reserve currency--it could cancel an entire series of bills or refuse to allow foreign holdings of RMB to enter its banking system and there's nothing anyone can do about it. It's also rife with government sponsored fraud.
I should clarify that I too have not changed my investment strategy, except I took about 75k in profits in December just to have some cash to deploy (owie ouchie oof inflation y u do dis?). My portfolio is "growth-oriented", but I couldn't tell you exactly what's in it as it's managed externally--it's about what you'd expect only with private equity replacing a good chunk of growth stocks.
No reason you shouldn't. Oil will be back sooner rather than later. Domestic production of shale or oilsand oil is way below capacity and this latest thing should kick everyone into high gear. Trains can't do what trucks can; especially in the US. I dunno; you could be right; this may be the financial equivalent of "nothing ever happens".
China knows their reputation in the West has been trashed with Chairman Xi's "Wolf Warrior Diplomacy", treatment of Uyghurs, China's debt trap-laden foreign investment as competitor to Western debt traps like the IMF, the fuckery in Wuhan, etc. Foreign investment has been fleeing since they're becoming too expensive for cheap labor.
EVs are a rapidly expanding market and subsidies/research for renewables are strong and ongoing. Like it or not, that's what governments and financers are throwing their money at.