5 ms·

So, should I be in 100% cash right now?

joefranklinsrs 8y ago
My opinions are not of financial advice :) You can make money on a downturn as well as an upturn
coltonv 8y ago
Don't try to time the market unless you dont have any cash savings. Have enough cash to last 6-12 months without a job and invest the rest. You'll do better that way than trying to time the market.
- toomuchtodo 8y ago
  12 months. 6 months is not enough in an extended recession. Disclaimer: 2008 GFC experience (company folded, had to walk away from primary residence, etc, took 8+ months to find another job while burning through mortgage payments, medical/living expenses). Experience described in this comment and those below are so others can make more informed decisions than I did.
  - cm2187 8y ago
    If the assets are liquid enough, 6 months may be enough to sell them.
    - toomuchtodo 8y ago
      My money market fund withdrawals were halted temporarily when the NAV broke the buck. I have 1 month cash on hand in a safe, the rest of it is in an FDIC high yield savings account I have access to immediately with a debit card. Liquidity is a sliding scale when the economy is melting down. Fool me once.
  - badloginagain 8y ago
    Biggest thing is to reduce spending. The closer to zero you can get on spending, the longer you can survive. I dont live in a place where I can afford a home, and Im actually seeing that as an advantage at this point- my investments are relatively liquid compared to a house, especially in a depressed/shocked market. It's not an asset until its sold- no mortgage, no problem.
    - toomuchtodo 8y ago
      Not paying for my mother's prescriptions and medical care she needed to survive wasn't an option. I had to pick between the house and her care, and the house went. No regrets about the decision.
      - AnimalMuppet 8y ago
        Right perspective. You did the right thing even when it was financially painful. Props to you.
        toomuchtodo 8y ago
        Thanks, I really appreciate that.
      - badloginagain 8y ago
        Ah, I'm Canadian so having to sacrifice everything for loved ones health-care didn't occur to me. That'd be a horrible position to be put in.
paulpauper 8y ago
no, but you should avoid foreign stocks and emerging markets. I think the S&P 500 has a lot of juice left
- anonymous5133 8y ago
  S&p 500 still have significant exposure to emerging markets.
  - somebodythere 8y ago
    Couldn't you short EM to hedge this?
    - sahaj 8y ago
      Don't short if can't afford to. Remember shorting has unlimited risk. What you should do is buy a put option, if possible.
joering2 8y ago
Not cash in form of paper money or coins, but rather silver coins, preferrably 80% pure. These are sold by bags by main silver sellers such as Monex. The point being if economy goes to shit that beautiful $100 bill you can spend to feed your family with lobsters will be worth as much and only as much as the paper it was printed on (hint - close to zero). In such times we will revert back to hard currency - gold and coins. But don’t buy gold bullion - it will be hard to buy bread with a 15gr gold bullion bar and noone will care to give you change. Hence best are 80% silver bags as a form of daily purchasing power.
- germinalphrase 8y ago
  The only scenario in which I can see my local grocery store accepting silver coins is in such a situation that my local grocery won’t continue to exist. I’m sure there are some $100 bills to be made by speculating on precious metals, but my local Kroger is never going to be cutting silver coins in half to make change.
- paulie_a 8y ago
  Silver is just as valuable as that piece of paper. It really has very little inherit value. Just because it's shiny doesn't make it truly valuable. gold is the same thing. Both have some limited manufacturering usages but at the end of the day they are shiny, similar to that very pretty piece of paper.
  - turtlecloud 8y ago
    sounds like the answer is bitcoin :) whatever we put our faith in has value, and I envision our future generation putting their faith behind BTC. Of course, the normies will prob use something else - prob another crypto backed by BTC.
    - joering2 8y ago
      Please no. I am talking about the times in which we go back to basics. You can't be able to freely travel, not to mention communicate, etc (this is the scenario OP draws as when the currency collapse); how can you think there will be sustainable high speed internet connecting miners to sustain a bitcoin blockchain.
pjc50 8y ago
As a Brit I feel somewhat fuckup-proofed by being long US equity funds. Both EM collapse and Brexit £ collapse would benefit them. I still have a couple of gold sovereigns from the last financial crisis, at roughly the same value I bought them. Mostly as a reminder to ignore the goldbugs.

My opinions are not of financial advice :) You can make money on a downturn as well as an upturn

Don't try to time the market unless you dont have any cash savings. Have enough cash to last 6-12 months without a job and invest the rest. You'll do better that way than trying to time the market.

toomuchtodo 8y ago
12 months. 6 months is not enough in an extended recession. Disclaimer: 2008 GFC experience (company folded, had to walk away from primary residence, etc, took 8+ months to find another job while burning through mortgage payments, medical/living expenses). Experience described in this comment and those below are so others can make more informed decisions than I did.
- cm2187 8y ago
  If the assets are liquid enough, 6 months may be enough to sell them.
  - toomuchtodo 8y ago
    My money market fund withdrawals were halted temporarily when the NAV broke the buck. I have 1 month cash on hand in a safe, the rest of it is in an FDIC high yield savings account I have access to immediately with a debit card. Liquidity is a sliding scale when the economy is melting down. Fool me once.
- badloginagain 8y ago
  Biggest thing is to reduce spending. The closer to zero you can get on spending, the longer you can survive. I dont live in a place where I can afford a home, and Im actually seeing that as an advantage at this point- my investments are relatively liquid compared to a house, especially in a depressed/shocked market. It's not an asset until its sold- no mortgage, no problem.
  - toomuchtodo 8y ago
    Not paying for my mother's prescriptions and medical care she needed to survive wasn't an option. I had to pick between the house and her care, and the house went. No regrets about the decision.
    - AnimalMuppet 8y ago
      Right perspective. You did the right thing even when it was financially painful. Props to you.
      - toomuchtodo 8y ago
        Thanks, I really appreciate that.
    - badloginagain 8y ago
      Ah, I'm Canadian so having to sacrifice everything for loved ones health-care didn't occur to me. That'd be a horrible position to be put in.

paulpauper 8y ago

no, but you should avoid foreign stocks and emerging markets. I think the S&P 500 has a lot of juice left

anonymous5133 8y ago
S&p 500 still have significant exposure to emerging markets.
- somebodythere 8y ago
  Couldn't you short EM to hedge this?
  - sahaj 8y ago
    Don't short if can't afford to. Remember shorting has unlimited risk. What you should do is buy a put option, if possible.

joering2 8y ago

Not cash in form of paper money or coins, but rather silver coins, preferrably 80% pure. These are sold by bags by main silver sellers such as Monex. The point being if economy goes to shit that beautiful $100 bill you can spend to feed your family with lobsters will be worth as much and only as much as the paper it was printed on (hint - close to zero). In such times we will revert back to hard currency - gold and coins. But don’t buy gold bullion - it will be hard to buy bread with a 15gr gold bullion bar and noone will care to give you change. Hence best are 80% silver bags as a form of daily purchasing power.

germinalphrase 8y ago
The only scenario in which I can see my local grocery store accepting silver coins is in such a situation that my local grocery won’t continue to exist. I’m sure there are some $100 bills to be made by speculating on precious metals, but my local Kroger is never going to be cutting silver coins in half to make change.
paulie_a 8y ago
Silver is just as valuable as that piece of paper. It really has very little inherit value. Just because it's shiny doesn't make it truly valuable. gold is the same thing. Both have some limited manufacturering usages but at the end of the day they are shiny, similar to that very pretty piece of paper.
- turtlecloud 8y ago
  sounds like the answer is bitcoin :) whatever we put our faith in has value, and I envision our future generation putting their faith behind BTC. Of course, the normies will prob use something else - prob another crypto backed by BTC.
  - joering2 8y ago
    Please no. I am talking about the times in which we go back to basics. You can't be able to freely travel, not to mention communicate, etc (this is the scenario OP draws as when the currency collapse); how can you think there will be sustainable high speed internet connecting miners to sustain a bitcoin blockchain.

pjc50 8y ago

As a Brit I feel somewhat fuckup-proofed by being long US equity funds. Both EM collapse and Brexit £ collapse would benefit them. I still have a couple of gold sovereigns from the last financial crisis, at roughly the same value I bought them. Mostly as a reminder to ignore the goldbugs.