Where would you put 20K right now?

weed30October 30, 2008

If you had 20K to invest where would you put it?...

If you had 6 months until you needed it.

If you had 1 year until you needed it.

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I would consider 6 months or 1 year pretty short term, so I'd likely go with the best rate on an FDIC insured CD I could find.

    Bookmark   October 30, 2008 at 10:31PM
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I website I use to research good CD rates and the like is

    Bookmark   October 31, 2008 at 12:24AM
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I have one coming due on the 6th and have the same question. My 88 year old dad said to put in the safe for the next few months. His reasoning was the little bit of interest I would make might not be worth the risk of keeping it in any bank at this time.

Dad has a couple coming due next month and said he was cashing them out. He wanted me to find where to buy fireproof money pouches to put in the safe. I found them on the internet but they are back ordered. When I called they said they have never seen anything like it and are trying to keep up with demand! They cost $65.00 plus shipping.

    Bookmark   October 31, 2008 at 9:58AM
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You can get 4.45% APY on a 12-month CD now; 4.15% APY on a 6-month. These and Money Market bank accounts are FDIC insured. While not beating real inflation, at least you are earning *something*.

If you want to keep cash out of a bank you'll need to keep it out of a bank safe deposit box too. Do many people have access to huge personal, *non-portable* safes?

    Bookmark   October 31, 2008 at 11:21AM
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CDs in a bank with FDIC coverage are safe. If the bank fails while your money is on deposit there, you get your money back plus the interest accrued up to the day of the bank failure. The money is in your hands usually within a day or two.

Of course, your money's purchasing power will decline in the next few years. Expect a spike in inflation. If you've been postponing buying a big ticket item, now is the time to buy it.

    Bookmark   October 31, 2008 at 1:23PM
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CDs for that short of a period.

    Bookmark   October 31, 2008 at 1:33PM
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Thanks to all that answered, and the good link from dgbehrends.

    Bookmark   October 31, 2008 at 8:24PM
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Boy ... am I frustrated - could chew nails!!

Spent over an hour on an answer ...

... it disappeared.

Son says that I should compose on "Wordpad", then transfer ... I guess that he's right!


ole joyful

    Bookmark   November 1, 2008 at 10:04AM
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Short term CDs would be my answer too.

    Bookmark   November 1, 2008 at 1:00PM
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keeping cash at home in a fire-proof pouch has to be one of the most ridiculous things i've heard...The world is NOT coming to an end, your bank savings account/cd is insured to 100k...And lets say for chits and giggles that the US economy crumbles,what do you think your wad of cash,stuffed in a fire-proof pouch, will be worth? Likley nothing

    Bookmark   November 1, 2008 at 5:51PM
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Burglaries are on the rise (no surprise in a downturn) and believe me, it doesn't take these guys long to ransack a house. They can tear it apart in less than 15 minutes! Yes, it happened to us. If you don't have a wall safe, I wouldn't even bother with any kind of portable or pouch safe. And all we keep is a moderate amount, mostly small bills, as recommended for emergencies - we're in earthquake country, and this is recommended because ATMs won't work for several days.

Inflation is the reason Social Security is giving seniors a 5.8% raise in January. At even an AVERAGE rate of inflation, $20K will be worth $10K or less in 18 years.

Your dad may be a font of wisdom, but not on today's more complex financial matters, I'm afraid.

CDs are fine, as long as you're absolutely sure you won't need the funds in the interim. If there's any chance you will, then you'll have to settle for a high-interest rate savings account.

FDIC insurance is currently $250K per titled account, for the next 12 months. Even at the peak of the S&L banking crisis when more than 1,000 banks failed in 1988 and 1989, at a rate of more than 2 every business day for two consecutive years, not a single depositor lost a dime due to FDIC insurance.

    Bookmark   November 1, 2008 at 9:51PM
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"My 88 year old dad said to put in the safe for the next few months. His reasoning was the little bit of interest I would make might not be worth the risk of keeping it in any bank at this time."

The ZERO interest and the risk of fire/burglary is not worth the risk of keeping it at home at this time.

    Bookmark   November 2, 2008 at 8:23AM
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Without knowing your tax situation, and whether or not you would benefit from tax-exempt income, I'd hesitate to recommend cds. There are other alternatives.

    Bookmark   November 2, 2008 at 9:01AM
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Okay, patser, I'll bit....

Where would YOU put 20K for 6 months that is a better alternative than CDs?

    Bookmark   November 2, 2008 at 5:30PM
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If I needed or could use tax-exempt income, I'd buy good quality, short term municipal bonds/notes.

And I'm only saying that it's tough to give an opinion without knowing the full picture on what an investor's goals are. Plus, what's better for one may not be better for another.

    Bookmark   November 2, 2008 at 8:41PM
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I received an inheritance this fall, and divided it between two online high-interest savings accounts at Dollar Direct and Capital One banks.

    Bookmark   November 3, 2008 at 3:20PM
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Limit has gone up to $250,000 per account on FDIC ensured deposits. A jointly held account is insured to $500,000 if there are two people's name on the acct.

There are lots of other combinations that can up the $250k limit, but basically if the bank is FDIC insured your money is safe

    Bookmark   November 4, 2008 at 1:48PM
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Have your kitchen remodeled (Hi, Weed)

    Bookmark   November 6, 2008 at 6:02PM
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LOL - Hi Pam! I am in fact getting a new countertop, but that's as far as I'm goin' this time :)

    Bookmark   November 9, 2008 at 10:52AM
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partst -My 88 year old dad said to put in the safe for the next few months. His reasoning was the little bit of interest I would make might not be worth the risk of keeping it in any bank at this time.

Partst- I think you dad has a point. After all he lived during the depression. I find it interesting that company who sells fire proof money pouches said they have never seen anything like it and are trying to keep up with demand! Guess your dad isn't the only one who thinks this is a good idea....

    Bookmark   November 9, 2008 at 12:44PM
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>>Guess your dad isn't the only one who thinks this is a good idea.... Which is precisely my point about most individuals being very poor investors. They buy high and sell low, swayed by emotion and ignoring the basics of sticking to a plan.

I happen to believe the market will undergo further gyrations during the next six months or so. But if you are a long-term investor - and remember that your life expectancy is on average 20+ years PAST retirement - then buying stocks in a down market is the only way dollar-cost averaging works.

In a short-term scenario such as the OP posted about, CDs, high interest savings acct, or short-term muni bonds are a sensible solution to gain some additional dollars, rather than losing them by the equivalent of stuffing the $$ in a mattress.

    Bookmark   November 9, 2008 at 8:01PM
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Hi weed30,

Your original post was of three lines, and two of them related to the time-frame of regaining the money.

One chunk of money doesn't exist in a vacuum - it is part of your whole life and financial picture, your whole asset.

Before I'd feel that I could make appropriate suggestions to you with regard to the use of this money over the next term, I'd have about a hundred questions for you, relative to other aspects of your life and its style.

Do you have two working?

How secure is your employment? Liable to be laid off, whether temporarily, for a longer term or, possibly ... permanently??

Could you float for essentially 3 months, better 6 mos., best at least a year with *no* income?

Do you have an emergency fund, in case of blowing a fridge, a motor in your vehicle, etc., unexpectedly? Do you have a feeling that some part of your equipment may be on or near its last legs? How essential is it to your basic/essential operation (e.g. for many of us, if an air conditioner quits, we can survive for a while: if we are 30 miles from work and the car engine blows, that must be repaired immediately ... and, lacking an available vehicle in the driveway, obtaining a rental ... and supposing the needed part may not be available for a couple of weeks ... a month)?

Do you have credit (I call them "debt") card(s)? How close is it/are they to maxed out, i.e., how much help can they offer in terms of a real emergency? Going over-limit costs heavy duty penalties, added to the regular (usually high) interest rate.

What rates do their carriers charge on unpaid balances? Many regularly charge 15 - 28% interest rates ... and often that interest must be paid with after-tax money! I try to avoid that eventuality at almost all costs!

If you needed to use it/them for a couple of thousand worth of emergency, do you have fairly liquid funds available, apart from these, to pay off the full amount by due date, in order to avoid being stuck with those high interest fees?

If I owed credit card debt, I'd likely use this money to pay it off, first.

Do you have a Line of Credit in place, (whether it be a HELOC or not) which can be tapped in case of need, e.g. to cover an emergency covered initially by a high-interest credit (debt) card, in order to avoid the high interest rate that carrying balances on it entails?

How liable ae you to need to deal with unexpected medical emergency? What level of insurance coverage?

Do you have kids in post-sec. education ... that may need an extra infusion of cash over the next period? How probable is that eventuality?

Do you have a parent (or other close relative) that just may be in need of care over the next period, e.g. need to get out of the traditional home due to stroke, heart attack, Alzheimer's, etc.? How much financial prepartion is in place on that person's part to enable him/her to pick up her/his own marbles in case of such an event, i.e., how much of the financial end of such a deal might devolve upon you?

What kinds of assets do you own, and how much, plus what levels of each type? How volatile are their value levels?

What proportion of your assets is denominated in U.S. Dollars - is part of them based in other (possibly more stable) currencies?

How old are you? How long before you plan to retire? What financial preparations have you made, and are you making, for that part of your life? Are your plans on track? Some people spend more time planning their 2-week vacation than they do their 30?-year retirement.

And should you possibly suffer permanent layoff at age 50 and become subject to substantial reduction in income after that ... those financial needs from that date forward would be heavily impacted, wouldn't they??

Those are some of the basic questions.

Then, with regard to possible use of this part of your asset, I'd want to investigate how risk-averse you may be.

How much experience you may have had in holding assets whose value fluctuates with time, e.g. equity-based mutual funds, or individual stocks?

How amenable are you to considering getting more of them (or some, initially, if you haven't had such experience in the past)?

How enthusiastic do you get about getting something that you need (want??) at a bargain price?

Do you own any foreign-based stocks?

It seems to me that dealing with this situation depends heavily on what other financial considerations are/may be available to you.

A recent study of banks in the industrialized world concludes that fairly highly-regulated Canadian banks are among the most secure in that world.

Would you be even slightly interested in using other assets to undergird opening a Line of Credit in Canadian dollars with a U.S. branch of a Canadian bank, which has stock-brokerage company affiliated with it, then buying a CD with that bank, using it as extra asset to back the loan through the next 6-month or 1-year period that you propose to leave this money tied up?

There are a number of Canadian-based oil and gas assets whose stock prices have been beaten down recently as the oil prices have dropped ... some unit trusts are paying 10 - 15 - even 20% (but I'm rather skittish about that latter rate).

As the U.S. gov't., carrying huge debt earlier, has been running up huge current deficits, and many say that neither the Iraq problem nor the financial one at home (possibly including the bursting of the credit card bubble) is near resolution has been putting the U.S. Dollar at substantial risk: in the ordinary course, the price of gold should be advancing, and it was a while ago, but recently has been dropping ... some say being manipulated, to make the dollar look good.

Which might be a good time to buy bullion ...

... or, possibly some gold mining stock, whether directly, or by buying pieces of several of them all in one piece. Possibly offshore ones.

Not a project worthy of consideration for people inclined to chew fingernails in times of anxiety ...

... but many say that stocks are at bargain prices.

Will prices go down more?

Who knows.

And for how long?

Who knows that, either.

Maybe there'll be better bargains available, later ... maybe not.

So ...buy some now ... buy some later ... buy some after a longer period.

Buy pieces from time to time, over a period, as the market bottoms.

Get that smile on your face ...

... later.


Good wishes for increasingly shrewd use of your income ... and all of your (increasing, over the long term) assets.

ole joyful

P.S. At near 80, not owning a home, I live comfortably, if frugally, on my three pensions and am able to save some of them. I have about 80% of assets in equities and have bought several times in recent months, plan to continue to do so, despite being down about 25%. I'm being forced out of one holding before the end of the year, or possibly early next ... so if the market keeps going down for an extended period, I'll have some more dollars available for deployment later. I can have more certificates issued, if I choose, to provide more backing for my Line of Credit (sitting unused at present).

I don't like being forced to take actions that are detrimental to me ... and when I have more options, that possibility is much reduced.

Four strings on one's violin gives the opportunity to make better music than if one is limited to only one string.

Bringing that music out takes long-term, incrementally-acquired skill: but beautiful music makes the effort worthwhile.

o j

    Bookmark   November 10, 2008 at 8:00AM
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For those who are intrigued by patser's mention of short-term munis, there is an article today in the WSJ regarding the pros and cons of this. It is too long to post here in total, but a few excerpts follow:

Thinking Local: Muni Yields Rise to Rare Levels
November 5, 2008 WSJournal Tax Report by Tom Herman

Lately, more investors have been taking a new look at a depressed sector that some financial strategists say offers not only safety but also unusually attractive bargains: tax-exempt state and local government bonds -- better known as municipal bonds, or munis.

Even after a recent rally, the $2.7 trillion muni-bond market is in a "deeply depressed state" by historical standards, says Philip J. Fischer, municipal strategist at Merrill Lynch in New York City. Merrill's Muni Master Index, a gauge of the overall market, fell 5.5% this year through October. A separate Merrill index of long-term municipal bonds was down about 14% since the start of the year. (These figures represent total return, which includes interest income and price changes.)

To some investment managers, these results spell opportunity, especially for investors in the highest income-tax brackets and those who live in high-tax areas such as New York City, New Jersey and CaliforniaÂ

Âmany investors still are leery of munis because of growing concern about the financial health of state and local governments -- especially those such as New York City with heavy exposure to the financial-services industry. Many municipal-government officials around the nation face major budget woes. "The damage is just beginning" in state budgets, with lower tax revenues likely leading to more widespread budget cuts in the months ahead, according to the latest quarterly state-tax revenue report of the Nelson A. Rockefeller Institute of Government, the public-policy-research arm of the State University of New York. More bad news about state and local-government finances could lead to further muni-bond price declines.

ÂWhatever the case, investors need to be careful before diving into this wide-ranging and surprisingly complex market. There are tens of thousands of bond issuers, ranging from major state and local governments to housing agencies, water and sewer districts, school districts and hospitals. Credit analysis can be highly complex, even for experts.

If you're shopping for munis, keep a few pointers in mind. First, not all so-called tax-exempt bonds really are tax-exempt. While most munis pay interest that is free from federal income taxes, some types pay interest that's subject to the alternative minimum tax, or AMT. So if you're among the four million taxpayers ensnared by the AMT, be sure to ask whether any bonds you're considering are "AMT bonds."

Don't overlook state-tax issues. Many investors, especially those in New York City and other high-tax areas, prefer to buy bonds issued within their home state, because that enables them to avoid federal, state and local income taxes. Or they invest in single-state municipal-bond mutual funds, which hold only bonds within a single state. (To be sure, some states, such as Florida, Texas and Washington, don't have a state income tax.) However, several investment advisers say it's prudent to diversify by buying at least some out-of-state bonds or investing in national municipal-bond funds.

Many individual investors like to buy individual bonds, with a plan to hold them until each bond matures, structuring their portfolio as a "ladder," with bonds maturing at regular intervals over the years. That gives them money to reinvest at regular intervals. If interest rates surge, they get back some of their money relatively soon to reinvest at higher rates. If rates plunge, they have at least some money locked up for longer periods. Other investors, however, prefer to invest in municipal-bond funds, which offer such attractions as convenience, diversification, professional management and buying power.

Some investment managers favor short-term muni-bond issues, which have turned in a positive performance so far this year. Merrill's muni index in the one-to-three-year range registered a total return of about 3% this year through October, Mr. Fischer says. Munis in the three-to-seven-year range were up about 2%.

    Bookmark   November 10, 2008 at 11:37AM
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Back in the mid 80s, when I sold mutual funds, a number of persons told me with a measure of glee of their good fortune in having bought gov't. bonds in '81 at 19%. They were inclined to disagree when I asked them how they liked earning $2,000. - 3,000. actual rate of return on $100,000. invested. Interest income here being taxed at the highest marginal rate, if they were in 25% tax bracket, the income tax would take 4.75%, leaving them with 14.25% after-tax return. Did they know what the rate of inflation had been then? Most didn't, or didn't see the connection. It had been at 12% ... leaving them with 2.25% or so real rate of return on their nominal 19%, after the erosion of their income by tax and of the value of their guaranteed-dollar asset due to that heavy rate of inflation.

When bonds were issued at 19%, those who held bonds paying only 10% were unhappy with the amount offered by would-be purchasers of their unmatured bonds.

With the government debt being at the size that it is, and running major current deficits, with little prospects of chopping them heavily soon, increased as it has been recently by the Broke Bankers' Bail-out, with a distinct possibility of there being need for further support required later, the economic outlook for the dollar is bleak. Also, with consumer debt running at record level, many should be concerned with the future stability of economy, and of the dollar.

The government printing money at the current rapid rate also puts the ongoing value of the dollar at risk, which can almost certainly lead to inflationary pressures.

As much of the debt is held abroad, it is quite likely that soon it will be necessary to offer higher interest rates in order to entice the mainly foreign purchasers of bonds to buy those offered by entities already mired in deep ongoing and current debt, as their ongoing offerings of new issues approach a reputation of junk bond status.

When interest rates rise, the amount that current purchasers are willing to offer for bonds prior to maturity gets much lower.

That would lead me to want to buy an individual bond, so that I could be sure that, if I held it to maturity, I'd get back the full face value. It seems to me that holding a bond fund in such a circumstance would be detrimental, resulting in reduced value, as much of their inventory would be subject to the reduced current value on offer for low-interest bonds in their inventory that were not near maturity.

I'm expecting stagflation - with many laid off or employed in low-wage jobs, there'll be reduced consumer demand, resulting in a stagnant economy, along with the inflation aligned with the high interest rates.

ole joyful

    Bookmark   November 11, 2008 at 3:44AM
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Suze Orman agrees with OJ, she prefers individual bonds to bond funds. However, most people in the US hold their investments in 401k retirement accounts, so buying individual stocks and bonds isn't an option.

It will be interesting to see what happens in a couple of years. Things will definitely be different, but in what way has yet to be determined. There is a lot of "noise" right now, and the dust has yet to settle.

    Bookmark   November 12, 2008 at 6:50PM
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For short term munis - patser must be referring to the BANS (bond anticipation notes). These short termers are paid off with the proceeds of an upcoming bond issue.

I've been a fan of municipal bonds for quite some time now and will buy when my broker calls with a good one at a discount and a maturity date not "too far" out. Haven't dabbled with the BANS though.

    Bookmark   November 13, 2008 at 1:57AM
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I prepared another offering here yesterday (Wednesday) and thought that I sent it, but do not see it now (Thursday afternoon).

Was there another here for a time, dealing with a number of Canadian stocks?

Possibly it might have been here for a time then removed.

Does anyone have some information to offer?


ole joyful

    Bookmark   November 13, 2008 at 4:24PM
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Easy - When the Dow gets to 8500, buy a Dow ETF. When the Dow hits 9000 sell. Repeat.

    Bookmark   November 14, 2008 at 1:18PM
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I just invested over half of that amount today.

We've had a number of major mines in Canada, mainly locally-based ... until recently.

In nickel - Inco (world's largest) and Falconbridge. Recently sold to foreign buyers ... stocks no longer available to us.

In aluminum - Alcan. Recently sold to a foreign buyer ... stock no longer available to us. That foreign stock is available to us ... but we lose low tax rate on annual dividends, as it's no longer a Canadian stock. Capital gain advantage at the same level, if we sell for more than we paid.

Noranda ... Brascan ... others ... same game: sold. Gone.


At the beginning of this year, I bought shares in another major Canadian mineral miner ... at $35.00 each.

By mid-May, the price had risen to $50.00, so I was a happy investor.

By mid-Sept., the price was back to $35.00.

By mid-Oct. - $16.36.

By first week Nov. - $11.28.

I was told at an investment group that I attend on Wednesday night that they recently bought a major coal mine, at a high price, and have arranged very large bridge financing ... for one year only. If the price of coal stays high, they'll be O.K. ... but if a recession results in much reduced sales levels, they may be in serious trouble.

Price per share today at $7.00.

I bought three times the number of shares to day, at $6.99 per share, that I bought at the beginning of the year ...

... at a little less than 60% of the amount that I paid in January.

Closing price today - $6.35 ... 9% less than the price that I paid, a couple of hours earlier!

Are the markets these days crazy ... or are they crazy??

As the price per share gets lower - there's a good possibility that some well-heeled mining co. will come along and make an offer to buy them out, usually offering a substantial premium to the current price of the target stock.

I had not bought any shares for several years, thinking that the market was too high.

I've bought at least four stocks, on five occasions in the last couple of years ... and the value is less now on three of the four that I bought earlier (higher on the third, due to a takeover offer ... that now may be in some trouble).

I plan to buy some more of three stocks of which I own only a few shares now, to bring my holding up to a substantial number, and a round number, of shares.

But not yet ... I'm waiting ... and watching.

Patience can sometimes be a virtue.

Oh - and by the way. I have very few gold shares now ... and want some more ... I feel that, as paper currencies lose their value, gold will be king.

I think also that, despite reasonable worries as to what to do with the waste, uranium will have an increased use as fuel in future. Though I have serious reservatioons about the long-term value in the world of using uranium, I have only a small number of shares of uranium producers and plan to buy some more.

Apart from possibly (probably?) owning some in my mutual funds, I have never owned tobacco shares - I don't want to be involved with selling a major cancer-inciter ... to my mind, poison.

As I feel that using beverage alcohol has caused many social problems, many families having great problems, and causing carnage on the roads, factories, oil drilling rigs, etc., I refuse to buy them, as well.

Also, as I feel gaming to be irresponsible, I do not choose to own shares of companies that are involved with gambling. Who are the biggest gambling addicts? Apart from, possibly, Trump ... the substantial number of governments that sponsor them! Shameful!

End of rant.

My boss tells me to love my neighbour as myself.

Good wishes for building your life to be more effective and responsible as the days go by.

Let's leave a decent, reasonably clean world for our grandkids. And be frugal in our use of resources ... on a world where the supply is limited ... to leave some for them.

ole joyful

    Bookmark   November 15, 2008 at 4:34AM
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>>Guess your dad isn't the only one who thinks this is a good idea....

jkom51 -"Which is precisely my point about most individuals being very poor investors. They buy high and sell low, swayed by emotion and ignoring the basics of sticking to a plan.

I happen to believe the market will undergo further gyrations during the next six months or so. But if you are a long-term investor - and remember that your life expectancy is on average 20+ years PAST retirement - then buying stocks in a down market is the only way dollar-cost averaging works."

Buy high, sell low, swayed by emotion? Interesting. Do you think there are ANY people in the world that are able to invest sensibly without having to have their hand held by a financial professional?

Even 'astute' investors are taking it on the chin yet you continue to point out how most individuals are very poor investors and would be better off relying on professionals to guide them to the holy grail of generous returns and a secure retirement.

I wonder how well this philosophy is working for the MILLIONS of baby boomers that are on the verge of retirement. I doubt there are very many of them who are happy to hear that their 401k's have dropped over 20%+ and might take years to recover. Plus, how excited do you think they will be to have to hear that they might have to delay their retirement for 10 yrs and work until they are 75+?

All this because they listened to those 'pro's' who told them to 'stay the course', 'don't panic', etc, etc?

How appropriate are 'traditional' strategies in these unusual times? I wonder what advice you might offer for an economy that might be going into a depression.....

    Bookmark   November 16, 2008 at 2:30PM
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Yes, I do happen to believe there are people who don't need to be hand-held by pros. I'm one, and I think Old Joyful is another. There's several more people who post regularly to this forum who seem to do quite nicely on their own with minimal assistance.

But handling finances wisely is not only best done holistically, it's time-consuming. My biggest argument against using an "advisor" is that's usually another word for "stockbroker-only". There are good ones, but the majority of them are NOT certified financial planners. However, most people don't have sufficient liquid assets for a CFP, even though most folks could definitely use help getting their legal AND financial goals aligned. A stockbroker can't do that, legally.

Have we been hurt by the downturn? Yes. Am I panicking? Nope. It wasn't money we needed anyway, so we can wait until things turn back up again.

You don't think they will, obviously. I disagree. Only time will tell which one of us is correct.

I didn't panic when the market dropped 26% after the dot-com bust, either. We've made money over the long term (20+ yrs), and in fact are still well ahead even for the short period 2002-current 2008.

Most people I know who did NOT do well in the last 10 years are people who did exactly what I said above: they panicked in 2001-2002, sold low, fled into "safe" investments, and have a hideous ROI for the last decade.

My DH can retire any time after 55, which he reached this year. So we have to keep a "long term" perspective - we would not be drawing the entire portfolio out, all at once, under any circumstances, anyway. DH is still working, and thus still contributing, so this is a wonderful time to be dollar-cost averaging for the future. We can wait 5-10 years, no problem, so the majority of our share purchases can recover and compound going forward. If one gets the majority of one's financial news from the sensationalist mainstream media, it is easy to get panicky.

I prefer to delve more deeply, and listen to both bears and bulls before making up my mind about what to do next. I read business news voraciously from many different sources, and clip dozens of articles for archiving on my PC every week. My current techno-love is a new Asus Eee 701 netbook - it's a traveler's dream, a PC I can put inside a normal-sized purse for surfing the Web as easily as I can do at home. I love watching CNBC as well; what a wealth of information is available to us now, unlike 20 years ago! And although I don't use a CFP, my varied employment has made four contacts in that field with whom I regularly touch base and bounce financial ideas/strategies around, just for the fun of it.

We aren't rich, but we're comfortable. We recovered far better from a personal bankruptcy back in 1993 than we ever thought possible; so we are grateful for what we have, and feel comfortable with our financial strategy. That's the essence of a good plan: you can tweak it as much or as little as you want, but a good plan works for you through good times and bad times, towards achieving a long-range goal.

Some see the glass half-empty....some see it half-full. I don't want fear to control my life, nor will I allow it to take away my enjoyment in being alive each and every day.

    Bookmark   November 16, 2008 at 7:11PM
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I happen to be of the opinion that, if this current crisis plays out like the one in Japan some time back, anything which pays a decent and reliable income will go up in value.
The baby-boomers coming up for retirement will also be also looking for ways to finance their retirement and will be scrambling for yield.
Personally, while I currently have a paper loss of over 30% in my retirement account, my retirement fund produces enough income for my needs and the income from securities has not changed greatly (knock on wood.)
Having said that, for anyone with an investment horizon of less than 5 years equities are not the way to go.

    Bookmark   November 16, 2008 at 9:12PM
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Energy - oil and gas. Uranium, though I don't like the long-term radioactive waste. Currently in production. Alternative energy systems (proven ones).

Gold - people are soon going to get fed up with unsupported paper currency. Where's the money to come from to cover all of these bailouts - and future ones ... printing press(es)? Asians have a proclivity to buying gold, and they are becoming more prosperous, so able to afford it.

They're becoming less dependent on the U.S. as the huge market upon which they've been so heavily dependent.

Commodities - as recovery takes place, the emerging countries will be needing the materials to build their economies.

Ian of B C - check "Canadian MoneySaver" magazine, Nov/Dec. issue, at your local library, for an evaluation of the strength of both U.S. and Canadian banks - highly leveraged, rather slim reserves. Or they'll send a sample copy, if you contact them at "www.canadianmoneysaver.ca" (but it may not be that issue: you could ask for it specifically).

I have some BCE that's to be taken over before year end (they say), so I'll have some new money (after provision for tax) to deploy then.

I'll pay tax with cash, borrow for further investment, as I choose: borrowing to pay tax makes interest non-deductible.

I'm not convinced that the market's near bottom, figure that there's some downside yet to appear ... but, if it is at or near bottom now, and I sat on my hands now ... I'll be unhappy, later.

Though I'd invested little for some time, I've invested half a dozen times in the last about 3 years, twice buying more of an earlier purchase.

Some more arrows in my current cash quiver, expect some more as BCE deal completes, plus have some L o C, currently unused, available should I choose to use it ...

... will see what develops.

Good wishes for increasingly skillful use of income and assets, planning for long term horizon.

If that makes sense for me at 80, it sure makes sense for a person of 50 ... or 30! With the major proviso that I don't expect to need any of those assets for a substantial period ...

... and if I'm out of the game, my kids won't, either ... can let the stocks run.

At my death (and I'm currently in good health), there'll be final expenses, quite a bit of income tax to pay and some charities to fund, but some of the long-held stocks will be turned over to them, to avoid heavy capital gain tax on that portion of that asset.

ole joyful

    Bookmark   November 18, 2008 at 8:18AM
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joyfulguy-"Gold - people are soon going to get fed up with unsupported paper currency. Where's the money to come from to cover all of these bailouts - and future ones ... printing press(es)? Asians have a proclivity to buying gold, and they are becoming more prosperous, so able to afford it."

Iran is buying up gold. It will be interesting to see where the prices are this time next year....

Iran switches reserves to gold
November 15 2008/Reuters

TEHRAN, Nov 15 (Reuters) - Iran has converted financial reserves into gold to avoid future problems, an adviser to President Mahmoud Ahmadinejad said in comments published on Saturday, after the price of oil fell more than 60 percent from a peak in July.

Iranian officials in July denied reports Iranian banks were moving funds from Europe, with one report suggesting as much as $75 billion had been withdrawn and converted into gold or placed in Asian banks, because of a threat of tightening sanctions.

A link that might be useful:


    Bookmark   November 18, 2008 at 12:24PM
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A lot of worthwhile, sensible stuff, from a wide perspective in "The (Manchester?) Guardian".

A great paper.

ole joyful

    Bookmark   November 18, 2008 at 5:48PM
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A mattress, so to speak. Actually, if it was something I would not need for something necessary, I'd try to find a small piece of land and drill a well. I'm just in that kind of survival mood.

Yes, the FDIC does insure accounts. We are borrowing money from China to cover things now. Will we have the borrowing power to return everyone's money that will be lost, bail out the financial industry, maybe the auto makers, individuals who bought homes they couldn't afford, to house/feed/and medicate people who are out of work?

The government can do many things in times of a national emergency.

During the depression, banks closed to keep people from getting their money, the government forced people to sell their gold and didn't allow private ownership of gold until the 70's (I believe), they would not allow insurance companies to pay people the savings in their insurance policies, they bought up beef cattle and slaughtered and burned them - even though people were starving.

Will they do those things today? Maybe not. Will they do something of that ilk? If things get really bad, I'm thinking we can count on it.

    Bookmark   November 19, 2008 at 7:41AM
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joyful-"A lot of worthwhile, sensible stuff, from a wide perspective in "The (Manchester?) Guardian". A great paper. "


Just read a good article that explains a bit more about why gold prices might not be following the usual patterns. Its in a new thread I posted titled "After Wall Street Bailout, Is Main Street Headed for Depression?".

I'll be curious to see if Celente's predictions are as accurate as they have been in the past.


Gold went down, the dollar went up. The markets are so highly manipulated. There are reports coming out of banks shorting gold positions by the hundreds of thousands trying to keep gold prices down. There are reports of people lining up in Europe and other countries to buy gold and cashing out.

Because when people realize that their paper is not worth the paper itâs printed on and people start going into gold, the whole system could collapse immediately. So, they are doing everything they can to prop the dollar up and to push gold prices down. They are propping the dollar up also, so that the people that are in dollars that want to get out have an opportunity, such as the Chinese and all the other foreign banks that are holding so much of the dollar debt.


The central banks because remember they are in control of the printing press. So you have coordination between the world central banks and the Federal Reserve and they are trading heavily into the markets to keep it going."

    Bookmark   November 19, 2008 at 2:01PM
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Celente is an "expert"? oh brother...

    Bookmark   November 19, 2008 at 2:31PM
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qdognj-Celente is an "expert"? oh brother...

And you are? (the expert!)

    Bookmark   November 19, 2008 at 4:29PM
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By short term munis, I didn't necessarily mean ONLY bond anticipation notes. I meant any muni that has a short time left until maturity. It could be a muni that was issued 19 years ago with a 20 year maturity. So now it has 1 year remaining. Tax anticipation notes, revenue anticipation notes, bond anticipation notes - they are all issued with short periods until maturity and they would qualify under what I was talking about as well.

    Bookmark   November 19, 2008 at 4:35PM
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Did i EVER say i was?? I have just pointed out that he is NOT the prophet he portends to be..But i will state will much certainty that people will NEVER sell their homes and move into the middle of nowhere to live in a log cabin,lol...

    Bookmark   November 19, 2008 at 4:36PM
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>>And you are? (the expert!)

qdognj-Did i EVER say i was?? I have just pointed out that he is NOT the prophet he portends to be..

The following publications beg to differ....! ;)

The George Washington blog has compiled a list of quotes attesting to Celenteâs accuracy as a trend forecaster.

âWhen CNN wants to know about the Top Trends, we ask
Gerald Celente.â

" CNN Headline News

âA network of 25 experts whose range of specialties would rival many university faculties.â
" The Economist

âGerald Celente has a knack for getting the zeitgeist right.â
" USA Today

âThereâs not a better trend forecaster than Gerald Celente. The man knows what heâs talking about.â

âThose who take their predictions seriously ⦠consider the Trends Research Institute.â
" The Wall Street Journal

âGerald Celente is always ahead of the curve on trends and uncannily on the mark ⦠heâs one of the most accurate forecasters around.â
" The Atlanta Journal-Constitution

âMr. Celente tracks the worldâs social, economic and business trends for corporate clients.â
" The New York Times

âMr. Celente is a very intelligent guy. We are able to learn about trends from an authority.â
" 48 Hours, CBS News

âGerald Celente has a solid track record. He has predicted everything from the 1987 stock market crash and the demise of the Soviet Union to green marketing and corporate downsizing.â
" The Detroit News

âGerald Celente forecast the 1987 stock market crash, âgreen marketing,â and the boom in gourmet coffees.â
" Chicago Tribune

âThe Trends Research Institute is the Standard and Poors of Popular Culture.â
" The Los Angeles Times

âIf Nostradamus were alive today, heâd have a hard time keeping up with Gerald Celente.â
" New York Post

A link that might be useful:


    Bookmark   November 20, 2008 at 12:27PM
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Love the sources,, NY Post,Detroit News,LA Times,USA Today,woohoo!!!

All Media companies who NEED viewers so that they can sell papers,commercials,etc

Though the NY Times says it best "Mr Celente tracks the worlds social,economic and business trends for corproate clients"...Not one iota of his prowess in predictions..

He is a hack who makes generalizations that are so vague that even if they come true,you're not certain what he said anyway..

    Bookmark   November 20, 2008 at 12:56PM
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jkom-"I agree, this is just another of the "doomsayers" that hog whatever media attention they can find. I'd be really surprised if 98% of people abroad would know what "Katrina" means to Americans!"

Not surprising to hear this from someone who says "Have we been hurt by the downturn? Yes. Am I panicking? Nope. It wasn't money we needed anyway, so we can wait until things turn back up again. Some see the glass half-empty....some see it half-full. I don't want fear to control my life, nor will I allow it to take away my enjoyment in being alive each and every day. "

Always good to keep a stiff upper lip. Glad to hear your not allowing the current state of your portfolio to affect your enjoyment of life.

    Bookmark   November 20, 2008 at 1:00PM
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dreamgarden, maybe its time for us to all abandon our homes and head for the country? lol...Perhaps i can stop at a local gun shop out there and get some weapons to protect my family..I also will start collecting rainwater as who knows what may happen to the water supply during a civil uprising...I may need to buy a chainsaw to chop wood to keep my family warm..

The world is not ending,life is WAY too short to worry about market flucuations that are part of a normal business cycle..Perhaps you don't remember other trying times of the 70's or 80's....

    Bookmark   November 20, 2008 at 1:10PM
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For Nostradamus(Insert Celente), the approach in prophesying was:

Do not be specific enough to be proved wrong. Be vague and cryptic.

Write in such a way as the reader will believe you know something, even if its nothing, and are hinting darkly at something you will not say. This increases the "aura of mystery" and makes your prophecies "portentous".

Predict on subjects with a high likelihood of occurring: war, pestilence, weather events, political intrigue, death of high profile individuals, accidents and of course prophesy them in a cryptic manner.

If you make enough prophecies, a few will come true per the law of averages or "if you throw enough mud on the wall, some of it will stick." In his "Prognostication" for 1554 Nostradamus had 149 new prophecies. He would later have over 300 prophecies a year.

For credibility purposes throw in a few "ex-post-facto" prophecies. With time the gullible will forget that you werent prophesying but retelling history. The ignorant wont know the difference.

Resurrect some of your failed prophecies. History tends to repeat itself and you might "get lucky."

    Bookmark   November 20, 2008 at 1:55PM
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dreamgarden, maybe its time for us to all abandon our homes and head for the country? lol...Perhaps i can stop at a local gun shop out there and get some weapons to protect my family..

qdog, perhaps the readers of this forum should stop wasting their time reading newpapers, watching the news or listening the radio and recognize YOU as the only 'reliable' source of news that exists!

Our economy is in deep doodoo. Have you noticed?

Or, are you only interested in making ridiculous (derogatory) comments about articles you disagree with?

    Bookmark   November 20, 2008 at 2:21PM
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Why must YOU present doomsday scenarios and continue to think the world is ending? The economy is clearly in a difficult period, but recessions happen..Always part of a cycle,always..But perhaps you aren't old enough to remember mortgage interest rates of 16+%, or unemployment of 9-10%? Or the savings and loan fiasco? Oil embargo of the 70's?

The glass is always 1/2 full :)

and the comment about my "making ridiculous(derogatory) comments about artciles.." is comical...the guy is Nostradamus,a soothsayer of "trends",lol

    Bookmark   November 20, 2008 at 2:36PM
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Here's an old NYT article I dug up from January 1981. It's discusssing the Feds policy changes during October 1979. It's a time I'll certainly never forget!

In October 1979, I was at Notre Dame University attending my first American Bankers Association class of a 3-year program. We attended Notre Dame for a week's worth of intense classes & then peformed work at home for a year; then back to another university & another year of home assignments...then, one more year at another university followed by a presentation given at the end of our third year.

Prime changed every few days...sometimes more frequently. We were studying the secondary market. Trading terminals had been set-up for our use. We were each given $1M of Monopoly money to trade with. Every single one of us was wiped out totally within TEN MINUTES because of the prime rate changes. It changed 3 or 4 times that day alone!!

I was doing construction lending at the time. My borrowers paid a rate that floated over prime, usually 3%. I can clearly remember construction loan interest rates hitting 15%+. One of my builders told me it would be cheaper for him to build the house on his VISA card! He wasn't far wrong.

Permanent mortgages were 12%+ on the open market. I had a subdivision to sell out in Thornton, CO of over 400 homes. We offered 'special' financing at 10.5% in an attempt to get those houses sold.

I also remember the 1970's recession & gas shortage. My ex-husband & I took turns taking a day off work to wait in line for gas. I was in line at the station just off Alicia Parkway in Laguna Hills, CA mid-week...the line was probably 1/2 mile long. Suddenly, we all heard a sharp noise & knew immediately what had happened. Frustrations had reached critical mass & somebody had shot another person who had gotten gas just before the station owner put out the "No More Gas" sign.

During the 1970's recession & housing bust...REITS failed by the hundreds & the market tanked. That's when I first learned about work-outs.

The world is not ending today. We're going through a tough time, sure, but it's not time to buy wheat in 50 lb. buckets. The sun came up today & it will go down tonight right on schedule.

In a few years you'll be looking back at this timeframe & remembering where you were when the Dow plunged. By the time you've been thru a few recessions they aren't as unnerving. Each has its own characteristics. IMO, this one will be remembered more for banking hitting the skids than subprime. Just like we remember the 1980's for the S&L crisis rather than the policy changes that precipitated the problems.

Yes, I've assumed you've not been through many recessions. If you have & have been this skittish...I don't see how you've survived?? Deep breathes. This too shall pass.


PS Your posts are very hard to read with all of those strange characters. How & why does that happen?

    Bookmark   November 20, 2008 at 4:51PM
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>>Always good to keep a stiff upper lipActually, it has less to do with the British-inspired "stiff upper lip" and a lot more to do with the certainty that money is but a small part of my life, and has very little to do with what truly makes me happy, or makes my life worthwhile.

We have a roof over our heads, sufficient money to pay the bills, no problem putting food on the table or indulging in our hobbies. We have worked hard and have so many possessions I've had to lay down the law to my younger friends and tell them not to buy us gifts, because we don't need anything they can afford to buy us.

Life has been good to us, and we are fortunate. We are rich in all the things that really count in life - love, friendship, decent health, sufficient material comforts. We might lose it all someday, but we have done what we can to safeguard our lives....the rest is up to God, chance, Fate, or whatever you like to think rules the universe.

No amount of money in the bank is ever going to be enough to make you feel safe, if you allow fear to rule your life. And making decisions based upon fear is doing precisely that.

    Bookmark   November 20, 2008 at 4:58PM
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Just reading Dave Donhoff's post about his baby daughter dying of SIDS should be enough to remind all of us that money is one of the LEAST important things in life.

    Bookmark   November 20, 2008 at 5:02PM
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my prayers to Dave and family - and yes, money is not the most important thing in the world -

Again, we do not have the same country we did in the 70's and 80's. We had jobs then, we had manufacturing jobs and others. There was a better chance of finding something.

The government can't bail us out of everything - the government is in debt - big time.

And - again, we have from 20-50M people here illegally who will compete for the jobs that Americans will need when they are laid off. Many of these people worked in the construction business and they have had to find new jobs. They aren't all just chicken pluckers, milkers of cows and law mowers. They work in banks, retail. These people pay almost no taxes and get back much more in benefits then they pay in any form of taxation. That is going to keep our country from rebounding as fast as it might.

We have to stop thinking this is 'just like the recessions of the 70's and 80's' - it isn't.

Another thing is the tremendous personal debt people have these days and the lack of savings.

Where would those who think everything is OK, suggest the thousands of laid off financial employees work these days?

No, we aren't going under, yet. To not admit things are very serious and not make provisions for it, makes no sense.

It isn't a matter of making money the most important thing in your life - it's just smart to prepare for eventualities.

It isn't a matter of obcessing about it, it is simply a matter of preparing. Those who were prepared in the 70's and 80's suffered the least. My husband said, both times, 'We didn't participate in the last boom, we'll try not to participate in the bust.'

Remember, just a few short months ago, people were saying similar things to those of us who suggested the housing market was going to collapse.

    Bookmark   November 20, 2008 at 10:44PM
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Let's remember the original topic of discussion here: what would you do with $20,000. today ... that you planned to invest on a 6-month time frame ... and for a year.

Please, folks - let's discuss the issues reasonably and avoid knocking one another down with personal criticism. There are many analysts who present various viewpoints and have people who trust their judgements at different levels of certainty.

The stock that I bought at 35 early this year, was at 50 about May, then back to 35 about mid-Sept, then dropped to $16.36 in mid-Oct., $11.28 in first week Nov., I bought more at $6.99 last Fri., remember?

Closed Wed. at $5.22, today Thurs. at $4.10.

Would it be wise to buy more?

Probably not - there are a number of other bargains around. Not too good a decision to get too large a holding in one issue.

The problem: if some mining agency makes an offer now, if it were to be at over $6.00, that's 50% above current value ...

... but under the price that I paid last week!

And the $35. paid early this year? Just a memory! A loss to offset other capital gain that I may make in sale of a different stock.

TSE60 was down over 700 today. Toronto market is oversold: our debt is lower than U.S., proportionately, and our gov't's books are balanced (though they're talking of running a deficit, to counter the downturn).

Probably some bargains out there ...

... but there may be still more drop before recovery.

Some other personal issues (i.e, places to put money) to consider currently:
- Christmas is coming, and
- charities that I support, and plan to pay in rotation through the year (but didn't, this year ... again), also
- political contributions (if we little guys want to be listened to more, we need to pay more of the shot), plus
- income tax instalment payment due ...

... are coming soon.

Plus ... I plan a trip to Arizona in a couple of months.

This summer the Canadian and U.S. Dollars were at par ...

... now 78 cents U.S. buys CDN$1.00.

Boy - should I have exchanged some money a few months ago!

Too soon old - too late smart!

I hope that you're looking forward to a good weekend ...

... and Thanksgiving is coming, for many participants here: good wishes for that celebration, as well.

ole joyful

    Bookmark   November 21, 2008 at 5:47AM
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tricia-"The world is not ending today. We're going through a tough time, sure, but it's not time to buy wheat in 50 lb. buckets. The sun came up today & it will go down tonight right on schedule."

50 lb. buckets of wheat, how funny! I couldn't imagine you carrying a bucket of wheat, more likely a bucket of cake! Or, is this just your 'special' way giving a nod to qdog's earlier (silly) comments?!

"Yes, I've assumed you've not been through many recessions. If you have & have been this skittish...I don't see how you've survived?? Deep breathes. This too shall pass."

Tricia, you know what they say about the word 'assume'! Yes, I have lived through a few recessions including the one in the 70's and have survived quite nicely, thank you. If you recall, Credit Default Swaps didn't exist back then, these were invented in 1997. Right? Don't you think it was imprudent for the banking industry to progressively build up a massive pool of toxic debts, while continually diminishing the savings that typically are required by modern economies to underpin such debts? We can't blame it ALL on ordinary home buyers getting sub-prime loans. How could ANY average, intelligent investor be expected to have a chance in the market or understand the complexity of these instruments when the only ones who understand (or know about them) are those with 'insider' information. I noticed you said in another thread that a large percentage of your portfolio is in cash. Is this a coincidence or are you just being 'sensible' instead of 'skittish'? I don't suppose any little 'birdies' gave YOU the heads up about when to get out before the flames got too close. Too bad all the 'average' folks who are watching their portfolios slide down the toilet weren't 'privy' to this kind of information BEFORE the Great Banker Bailout of 2008.

"PS Your posts are very hard to read with all of those strange characters. How & why does that happen?'

How kind of you to notice! I really don't know why this happens. Perhaps you could ask one of your grandchildren to explain it for you or see if a visit to the eye doctor might be in order.

    Bookmark   November 22, 2008 at 5:01PM
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