Home Forums Miscellaneous Topics Stock Market and Investing Safe harbor in a storm

Sort of asked this question in the Hunter's Campfire but, while fortified country bunker estates filled with ammo and physical gold bullion are nice in their own right, they don't really seem like sound investment strategies short of nuclear war.


It looks probable that there is going to be some kind of seismic financial event in 2024, possibly equaling or even exceeding the 2008-2009 time frame. Could be a self-fulfilling prophecy like component shortages but the bottom line is the bottom line no matter how or why it gets there.

How would you protect yourself from this? Where would you look for a safe (as possible) haven for your money if you thought something bad was coming but had no idea how it might actually play out? Bank failures, stock indexes falling like rocks, bond defaults, even greater inflation, all unknowns.


See, I don't think society is going to collapse to a Walking Dead state. I foresee Antifa stirring up trouble like mad this summer but society and some if not most financial institutions will continue to exist more or less as normal. Rome was still there after the Visigoths left. People and commerce were still here after 1929, albeit a lot poorer.

My "diversified mix of stocks and bonds" has done well post-2009, but going into late 2007 that didn't help all that much, especially the stocks part. That's what I'm trying to formulate a strategy for and just looking for things to think about.

Don't worry, I'm not betting my life's savings on random advice from random strangers, but like most threads here about any subject there are some folks who know what they're talking about. This is just one of many resources to utilize, hence my question.

Let's stipulate one thing here from the get go...I have the same questions you do, but I don't have a clue what to do to prepare or position myself financially for the least impact from a major correction.
Having learned some hard lessons from the disastrous Carter years, and the S&L credit union failures that followed I came to the conclusion that financial advisors didn't know as much as they thought they did. The Carter years huge interest rates and the S&L crashing the housing market didn't affect most folks as much as myself, employed in the timber industry, where it was disaster.
So what could a blue collar financial dunce do to soften the blows? Now I'm not talking SHTF collapse...I'm talking a severe downturn with high unemployment, tight money, shortages. I decided to slowly extricate myself from the 'standard' portfolios the experts recommend and go my own way.
In my mind, I identified the things people NEED in tight money times, the things it's impossible or difficult to do without. And slowly I bargain shopped and bought those stocks over time. And perhaps coincidental, but many of those stocks pay a decent quarterly dividend.
So now, I am in energy, food/agriculture, some transportation, certain bond issues that are centered on municipal services like water, sewage and energy.
Have I left a LOT of money on the table after walking away from tech, entertainment, banking, leisure, etc? Yes, but I am sleeping well. And I weathered the 2007/2008 very well.































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The talk radio shows advertise putting physical gold in your IRA. Sounds to me like "paper" gold that really doesn't exist. Paper gold along with paper platinum and silver has got to be what is holding the precious metals prices down.

Hoping for redemption of paper gold was proven a false hope 90 years ago. That could be repeated.

Good luck with collecting your gold when things go bad. I believe mining stocks would be better if you want exposure to PMs and don't want to take physical possession.

10 years ago I started walking the dogs every night with the guys.

One guy was investing in Gold

I argued loudly that gloom and doom talk was nuts.

I said I am investing in AMZN.

Turns out I was right.

Stay diversified in stocks, bonds, mutual funds, maybe some tax free munis and a little cash, and ride out a market drop that may occur next week, or next year or ……
Nobody is smart enough to accurately predict a major market drop, though a few might guess and get it right. Many will guess and get it wrong.

This, and have patience, it's worked very well for me. Those who panic and overreact make it much better for those of us who don't.

I am the same way. I have most of my money in stocks and 19% bonds. I never was big on the tech stocks but have plenty in the S&P 500 . My idea of investing is what we will need for the next 50 yrs. My portfolio is 18% energy stocks, 18% real estate ( REITS) I have a lot of healthcare too. I am slowly getting more into utilities. Right now they are very reasonable and pay about 3 to 4 % dividends. I also decided the last 3 yrs. to buy food stocks. So, I bought Shmuckers Jelly, Kellogs, Tyson, General Mills, and Kroger. I am not doing very well, however, they lost about half what the market lost today and that helps ( market lost 1.7% today) .. My utility index lost .37%, so , less than 25% of what the market did. There is really not a lot we can do. I have very little cash neither and should have more. it is nice to have a bunch here with some common sense about investing ideas. I am also done with the ( buy bullets , beer and lead).. I search all over the internet for ideas and almost all of it is very shallow . As for me personally, my wife thinks I;m over doing it. I go to Goodwill and I buy flannel shirts, and blue jeans... I buy a lot of socks, T shirts and underwear . It is a consumer staples. However, my wife buys bulk rice , potaotes , and cans things . We stock up on Crisco, cereal , butter, and toilet paper. SOme may laugh, but it was not 4 yrs. ago we saw how people emptied the grocery shelves. Imagine a real problem, like a power outage for a month, a real pandemic like the Spanish flu or a nuclear war. The shelves would stay empty for a year and prices would double. As for investing, I think utilities and food . However, you can if you want buy land REITS. I own Gladstone Land Company.. The ticker is LAND. It is way undervalued and pays 4% dividends, has 116,000 ac. of farm land has barns, processing buildings too. I think that might be safe. I also have a lot of tax free muni bonds in an ETF ( HYD).

Just look at the long trend and sleep well. Of course a black swan event may happen, have a bit of cash on the side to take advantage of it. In the event of a nuclear war I doubt the money will do us much good any way. My buddies and I at work discuss this stuff all the time and we've come to the conclusion that since the pension is gone this is the only game in town for most people and the Brinks truck pulls up to Fidelity every week with everyones 401K contributions. It's a Pyramid scheme and we're on the bottom. If someone is really concerned or really close to retirement you can get 5% pretty much risk free for now. Stay diversified and confident. I am an eternal optimist and every time Ive wondered if this time is different, Nope! new high. It's worked for me so far and I am going to continue the course. I found a little bit of cash on the side to buy on big down turns helps me mentally to feel like I am winning.

Shawn

Thanks Elkbelch.. That is how I am too and why I have very little cash. I just keep it invested. In 2020 however, I did everything I could do to come up with extra money and that money has been my biggest gainers.

If you're sniffing out trouble TLT (treasuries) is a nice place to be. After the dust has settled start re deploying

I've begun pulling some money from mutual funds and buying CDs. This is not because I expect some cataclysmic event, but simply because I'm getting older and will need the money sooner than I once did. I'm still mostly in stocks, but am leaning more and more towards capital preservation.

Other than being nimble, I don't know what constitutes a safe harbor. I did pick up a couple of Japanese stocks FUJHY and SMFG plus a an Indian stock WIT. Sold VKTX because it spiked in price.

I am buying some utiities lately.. I figure that even in a depression, their customers will buy nat. gas and electricity , or freeze.

I've been doing CD ladders. I'm only averaging about 5.3% but I pulled most of our money out of the market when Biden stole the election. I've missed some good opportunities and would like to get back in but don't know when or how. I figure now I'd be getting back in at the top. Seemed like just 5 months ago or so the market was heading down and the dow was around 32k. Now all the sudden were at 39k.

I did buy a lot of physical gold since the Biden regime came to power and my average cost is around $1800-$1850 so it's appreciated a little but I've missed some real gains on stocks. I need to just find a handful of good stocks and some funds and get back in. I just feel like the market is so disconnected from main street but maybe that's a good thing.

Most families I know are cutting back heavily on wants just to afford needs right now. There's been some good deals on guns and RVs and even cars again lately. Food, energy, taxes and insurance seem to keep climbing but we aren't getting any raises. Tge international scene seems pretty unstable right now too. However it's becoming painfully obvious that I'm not going to keep up if I don't jump in at some point.

Any good ideas on stocks to buy? I've heard that there's about 7 or 8 tech stocks that are really driving things. I also wouldn't mind getting some good dividend producers too.

We have enough in our fidelity accounts that we get free advisors but when I tell them I don't trust the world still and want to keep playing it safe especially in what's going to be a crazy election year the advisor just says I think you're right let's wait until after the election. So I just keep buying lots of different cds $10,000 at a time. Mostly short term like 90 days. Every month several mature and I buy new ones. I spread it over about 20 different banks all fidc insured.

Bb

You're not exactly dying with an overall portfolio averaging 5.3%. But, yes, things could be a lot better. I wasted too much time and opportunity listening to the doom and gloomers. They will bring you down and keep you invested in gold while the increase in value of companies with real assets and businesses far exceeds inflation over time. I also am squeamish about investing at highs. I would be extremely squeamish about investing on any single stock pick or even a few at extremely high valuations.

With respect to investing at highs, I recently saw this article by a highly respected analyst. It responded to this question:

Investing at all time highs is counterintuitive. Does it produce great returns because the market is forward-looking and investors are momentum investors? It doesn’t seem to make sense to buy just before a long severe bear market.

However, all time highs are made because people remained invested and continued to invest at the previous all time high. Check this out: https://awealthofcommonsense.com/20...more-all-time-highs-in-the-stock-market/

The general rule is to never risk money that you will need in the next 5 years. This is so you don't have to sell stocks at lows to cover needs. Keep that money in your CD ladders if your guaranteed income can't support your needs. Also, keep some cash handy to buy opportunistically when people like my old self panic and cash out during a crash. That's where the real money is made. Investors who put their cash to work in the market during the low point of the pandemic did very well. Warren Buffett's iconic sentence from a 1986 shareholder letter said it all: "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

You are correct that 7 stocks are driving the S&P 500 right now. That is a little scary. Rather than shooting for the moon, you may want to invest in some "ballast" stocks that beat your 5.3% but don't risk the nest egg. Dollar cost average into positions. Find a company or advisor who understands your risk profile, timeline and goals. I am a little surprised that a Fidelity advisor told you to sit out until after the election. Perhaps the person was simply parroting the signals that you were sending out?

Good luck!