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When I retired about 4 years ago I bought 5 year CDs at credit unions, getting about 2% interest. This has been enough to live on so far.
However, now the same CDs get about 1%. And next year when they have matured it could be even lower.
I also have a retirement account that I was planning to convert to a lifetime monthly income. But now I think that income would be eroded by high inflation.
Low interest plus high inflation is the worst scenario for someone like me.
I am searching for ways to prevent my savings from evaporating.
So far all I could think of is physical gold, platinum, palladium. Silver would be too big and heavy.
I was hoping silver ETFs would be safe, but from what I read so far they are not any safer than stocks. I don't understand why, but if they aren't safe I definitely don't want to take a chance.
I am not thinking about an end of civilization scenario. I don't think I could survive that anyway because I don't want to buy a gun and don't know how to shoot.
Instead, the scenario I want to plan for is long-lasting low or negative interest rates, plus inflation and possibly hyper-inflation. I could burn through my life savings really fast if that happens.
Thank you Fed for all you have done to destroy the future of the middle class. I know you will continue trying your best to annihilate us.
Seek a professional financial advisor would good reviews before you mess up your life dumping your money into silver, go some useless metal or buying physical gold from some amway scheme gold brokerage...
Or you could research the Permanent Fund, research online, there are many books about it, you can talk to a financial advisor about it... whatever you want, but don't dump your money into crap.
Ok well, I am certainly researching this carefully before doing anything. I have about a year to think about it.
I have been reading all kinds of things on the subject.
I read all the posts here about investing in gold, etc. I figured posting here would be part of my research.
Ok well, I am certainly researching this carefully before doing anything. I have about a year to think about it.
I have been reading all kinds of things on the subject.
I read all the posts here about investing in gold, etc. I figured posting here would be part of my research.
Is that ok with you?
? kind of a rude response considering I gave you a pretty well thought out answer with specifics as well as a website to backtest any investments you are considering... time to delete my post because helping ungrateful people just isn't my thing, best of luck though.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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We built an income pyramid and a overlaid risk pyramid. Both have components that are somewhat flexible.
Another analogy is the structural joints in an ancient Chinese temple. The supports are free to move against the support foundation, the roof is floating on the supports.
Another is our retirement sits on cushions-springs, and counter balanced.
Just diversify into a few tickers and call it a day. You should make at least double your stated goal of 2% with this, and have some upside which you'll never get from a CD.
Let's go with:
25% AOK (this is a conservative ETF that gets you some yield and has marched upward along with the market this year)
25% GLDI (this is an ETF that writes covered calls against gold).
25% XLU (ETF that tracks utiliites, yielding 3.5%)
25% (pick a conservative stock) - I'm going with PPL, which is yielding 6%, trades at a PE of 12, and is going nowhere. PPL will be around in 100 years (unless they are bought out).
You can sleep soundly at night with this one. And I just saved you the cost of a financial advisor.
Just diversify into a few tickers and call it a day. You should make at least double your stated goal of 2% with this, and have some upside which you'll never get from a CD.
Let's go with:
25% AOK (this is a conservative ETF that gets you some yield and has marched upward along with the market this year)
25% GLDI (this is an ETF that writes covered calls against gold).
25% XLU (ETF that tracks utiliites, yielding 3.5%)
25% (pick a conservative stock) - I'm going with PPL, which is yielding 6%, trades at a PE of 12, and is going nowhere. PPL will be around in 100 years (unless they are bought out).
You can sleep soundly at night with this one. And I just saved you the cost of a financial advisor.
i would hardly call ppl conservative with those losses and swings in volatility. i also think xlu and ppl is overly concentrated.
i would hardly call ppl conservative with those losses and swings in volatility. i also think xlu and ppl is overly concentrated.
i certainly would not sleep well with that combo
Mathjak I was going to say to use AT&T instead of PPL for that very reason but I knew you would go ballistic..... And PPL below $30 is almost always a good buy.
Bottom line is that there is no riskless portfolio for what he is trying to do. If he goes 100% cash he loses his income stream, so he has to take some risk to get some return.
He could just go 100% AOK but even that one, he will lose if the market tanks.
Go 50% total stock market mutual fund 50% total bond fund and rebalance periodically. Right now my portfolio like that is up about 20% for the last year, but has averaged greater than 9% for its lifetime including a couple of recessions. Ignore inflation. The Bond market is telling us that they don't see any inflation anywhere on the horizon for a long, long time. In any case, inflation doesn't just soar overnight--it is stupid to plan for say 10% inflation at some point 10 years from now. You will have ten years to see it coming--it will inch up year after year, and you will have time to adjust your investments if needed.
Go 50% total stock market mutual fund 50% total bond fund and rebalance periodically. Right now my portfolio like that is up about 20% for the last year, but has averaged greater than 9% for its lifetime including a couple of recessions. Ignore inflation. The Bond market is telling us that they don't see any inflation anywhere on the horizon for a long, long time. In any case, inflation doesn't just soar overnight--it is stupid to plan for say 10% inflation at some point 10 years from now. You will have ten years to see it coming--it will inch up year after year, and you will have time to adjust your investments if needed.
rates on bonds are actually trending higher going out longer ... the long term bond fund tlt hit a high of 179.90 and fell back to 162.74 as inflation fears are heating up looking out longer . that is a drop of almost 10% in value .
so bond funds reflect future inflation perception today , not when it happens ..
bridgewater , the worlds largest hedge fund thinks the bond markets got it wrong ...
with rates almost at zero , reflation is the only way out of a slow down and that could mean rising rates and inflation. they think we will see drops in the value of intermediate term bonds and long term happen very quickly .
the feds only recourse is spending and programs that do spending .
they dumped 297 million in TLT and are no longer recommending buying intermediate term treasury bonds or long term bond funds.
are they correct ? don't know but their logic for stagflation happening is far stronger than any deflation happening .
inflation has come upon us before almost over might .
in in 1965/1966 inflation was 2.50% -3.50% . who would have guessed in 3 years time it would have doubled and by 1974 it would be 11%. it was crushing to a retiree. but with inflation so low who ever expected a 4x increase coming .
we are in uncharted waters now so i would never make the claim anything is a safe bet ...some things may be a bit less volatile than other things but there is risk of loss everywhere today .
even cd's adjusted for inflation have been a guaranteed loss of about 2% a year most years over the last 40 years with only a few exceptions
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