The "Safest" Place For Your "Assets"

[MJ DeMarco]

I'm curious to the investor sentiment here at the forum with respect to the perceived "safest" place for your assets ... aside from my answer being "My Business", what else?

In which vehicle do you perceive the best place to have your assets tied?

If the market declines another 40%, where do you think would be safest? Least impacted?

Please vote and feel free to comment.

 

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[randallg99]

treasuries hands down... but not including FRE/FNM bonds even though they're GSE's their bonds are not gov't backed

 

[Sid23]

I was watching a piece on Warren Buffett last night who said that he thinks treasuries and gov't bonds are in a bubble.

 

[Rawr]

Going with an interesting opinion:

If everyone tries to 'devalue' the USD still remains on top. Why? The majority of debt is denominated in dollars - and therefore dollars are needed to repay the debt. Yes, just like Japan, this has very negative repercussions for our exports. At the end of the day, everyone will need U - actual zero-coupon Treasuries - and there aren't enough to go around relative to the debt created. Traditionally governments have four choices to wrest themselves out of the grip of a deflationary environment:

1) Nationalize sick banks & recapitalize (Sweden)
2) Amputate sick banks & recapitalize (1907 US)
3) Zombify sick banks & dither away 20 years (Japan)
4) Devalue their currency (1934 US)

Deflationary monetary phenomenon has never been experienced on a GLOBAL basis before. There isn't a corner of the world that is left out today. In GD1 there were plenty of places on the globe that did not participate in the economic depression. There were plenty of places that had yet to be exploited by lending and speculation. Not so now. It's not contained. It's the opposite. It's universal.

When people are defaulting on their debt (credit), that means essentially that that credit (money) is leaving circulation. That IS monetary deflation.

 

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[hakrjak]

I'm going with SFR's in my town, because even if we get this monster inflation they are predicting -- the value of our homes will rise, rents will increase, and what we owe on the mortgage will become inconsequential.

- Hakrjak

 

[randallg99]

I was watching a piece on Warren Buffett last night who said that he thinks treasuries and gov't bonds are in a bubble.

very true and betting against Buffett is probably not a bright move but what are the better options for cash at this time? and betting against Bill Gross isn't a bright move and he says the opposite of Buffett.... so who knows?

it's hard to justify real estate, metals or any other hard asset since we're in a deflationary mode... UST's are stable (to a degree)....

so reviewing the list-
Real Estate (all of the above) - you're creating a new biz and deploying cash - maybe that's a good option, but keep in mind hard assets are deflationary until the banking system stablizes.

stocks? this is actually my second choice behind USTs since we are approaching very reasonable P/Es but there is downside risk still. (This is where I am ready to deploy my money)

Other currencies? No way. US$ is still the currency du jour for the world in this global slowdown

taxable bonds? not until equity markets stablize and risk is just as high as stocks but rewards are not so might as well go stocks instead of corporate bonds

municpal bonds? not a bad idea. typically lower rates of interest than taxable bonds but there are a lot of states having budget issues and these fiscal problems trickle right into community backyards

MJ asked where the "SAFEST" place to put money? to me that's lowest risk and that would be UST.

JMHO

 

[MattThomas]

Treasuries are literally backed by the full faith and credit of the US government (assuming we are referring to US treasuries, of course), so these would be the safest bet for stability of principal. You might not get much (or any) of a return, but at least it is the safest place to put your money.

I hadn't read Buffet's quote on treasuries being in a bubble, but I find it hard to believe he is saying that treasuries are not safe. He is probably suggesting that the premiums for USTs are a little high because they are in higher demand. My guess is he is saying that these premiums will decline, decreasing the present value of the bond, resulting in a capital depreciation of the asset, ultimately ERODING the investor return, but not hurting the principal itself. But that is just my guess.

 

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[MJ DeMarco]

Added "Precious Metals" as an option, how could I forget that?

 

[kurtyordy]

what about oil futures or other commodities?

 

[RealOG]

I struggle with the aspect of "safety".

How many fastlaners are concerned about keeping their money?

As a fastlaner, we should be more concerned with growing it...

 

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[hakrjak]

Man, I'm not a huge Jim Cramer follower, but I have him on right now -- and he is on a rant. I know that the guy is generally regarded as a leftist, and he just called President Obama a Lenin-ist, and said if he doesn't put his agenda on hold -- The markets will never recover. He is begging Obama to put the brakes on "change"... haha Good stuff!

Cheers,

- Hakrjak

 

[jaytrader43]

You forgot to add "Mattress".

Seriously though, I would go with cd from a bank in Cayman/Panama/Insert Tax Haven here.

Reason being that these places may see an inflow of cash from the USA since The Saviour decided to hike taxes on the rich, so they'd be pretty stable.

 

[bflbob]

I'm still liking stocks. I'm up nearly 5% again today.

 

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[ramy98]

With the way things are going now; I think a safe bet would be ammunition.

Its only going up in price and is hard to find.

 

[CactusWren]

Real estate takes my vote in the US. Foreign currencies or foreign real estate sound even better.

 

[MrPink]

I voted for Government Securities (Treasuries, GNMA's) although am thinking of TIPS and not treasuries.

 

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[hakrjak]

With the way things are going now; I think a safe bet would be ammunition.

Its only going up in price and is hard to find.

If things continue to get worse man, you're going to need to be USING the ammunition, forget about selling it. haha

I'm surprised we haven't seen the rifle make an appearance on the nightly news yet.

- Hakrjak

 

[Kung Fu Steve]

Funny that you post this, I was just reading Tim Ferris' blog and he wrote about this:

How to Be Jason Bourne: Multiple Passports, Swiss Banking, and Crossing Borders

 

[biophase]

Have you tried to buy an AR15 lately?

Diversification - you should put half of your money in your mattress and bury the other half in the backyard - Colbert Report

 

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[Rawr]

Have you tried to buy an AR15 lately?

Diversification - you should put half of your money in your mattress and bury the other half in the backyard - Colbert Report

Were you serious about the safe with guns? How much are AK's going for now, if u can even buy em here?

What's glock going for?

 

[ramy98]

Have you tried to buy an AR15 lately?

Yup. We have lots of supply up north. We have a dealer with a nice selection of 10.5" LMT Carbines; they are going fast though....

Our STAG/LMT distributors are constantly running out of stock. That being said we got some new rifles from Norinco and Imperial Defence (UK)...

 

[hatterasguy]

Guns are way up! Have you seen the price of M14's lately? For 5.56, 7.62, and 30-06 rounds too???

I'm investing in real estate and guns, both are safe bets IMHO.

This year I'll probably add a Mauser 98 and pistol of some sort to my collection, maybe an M9 with a 5.9in shooters barrel.

 

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[Kontis]

Were you serious about the safe with guns? How much are AK's going for now, if u can even buy em here?

What's glock going for?

ak47's are on back order for 2 weeks. cousin is waiting for delivery $599 shipped

 

[CVentures1B12]

I had to go with Real Estate...

After that I went with Apartments. I feel like the rental market is going to go way up for a few reasons:
-More people going back to school (college, MBA, etc.) than ever. They will need a place to live during/after school to get on their feet.
-Ever growing population needs places to live. People are holding onto their cash and are less likely to put a 20% outlay on a house, which is what most banks are requiring these days.
-Mortgages are low, but people are also looking to start businesses. Realtors say that renting is "throwing away money"...I disagree...I pay 250 a month in rent, which allows me to devote about 1000 each month from my J.O.B. income into my business.

Please, please, please correct me if I am wrong!

Best,
Josh

 

[hakrjak]

I had to go with Real Estate...

After that I went with Apartments. I feel like the rental market is going to go way up for a few reasons:
-More people going back to school (college, MBA, etc.) than ever. They will need a place to live during/after school to get on their feet.
-Ever growing population needs places to live. People are holding onto their cash and are less likely to put a 20% outlay on a house, which is what most banks are requiring these days.
-Mortgages are low, but people are also looking to start businesses. Realtors say that renting is "throwing away money"...I disagree...I pay 250 a month in rent, which allows me to devote about 1000 each month from my J.O.B. income into my business.

Please, please, please correct me if I am wrong!

Best,
Josh

I agree with most of this. Also the biggy: It's become very difficult to qualify for a mortgage right now. You have to have a Fico score of 625+, which most buyers simply do not have. Credit scores are only going to get worse with all the layoffs occuring right now.

- Hakrjak

 

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[hakrjak]

Have you tried to buy an AR15 lately?

No, but it looks like we've still got plenty of everything here in Colorado. We don't have any state restrictions on firearms like some other places, so you can pretty much buy whatever you want.

I wouldn't load up on guns for an investment, if you're thinking that Obama is going to ban them... Because he'll probably make a law that you can't sell them or transfer them once you have them, or even worse -- he'll sieze them from your house, or he'll just make the ammo so damn expensive that people won't want to buy them.

I'd buy a couple of good weapons that you are comfortable handling & plenty of ammo in case the revolution breaks out, and you find yourself in an urban house-to-house street fighting situation. ...

- Hakrjak

 

[biophase]

ak47's are on back order for 2 weeks. cousin is waiting for delivery $599 shipped

I didn't mean to hijack this thread with gun talk but I know a few people who are betting on guns and ammo as investments. I know it sounds weird. I went to a gun shop about 2 weeks ago to look for an AR10 for my friend who lives in another state where AR10's are impossible to get (not cause they are illegal, just due to demand). I found a store in AZ which had 10. Then the Obama news came out and the store sold nine of them in a day. My friend bought the last one. He is positive that he can sell it for at least double the price he paid.

At Scottsdale gun club they are totally out of AR15's, they had 1 M4 type rifle left and about 5 AK47 type rifles. I put my name on the list for them to call me if any came in. There doesn't seem to be an ammo shortage here, but I am hearing that there is in many parts of the country.

I don't know much about assault rifles, but I do know that the ones I used to look at were priced around $800 and they seem to be around $1200 now.

Handgun prices are still the same, although I've noticed alot less handguns in the dealer displays and the stores are just jam packed now.

 

[biophase]

Just another thought about guns and ammo as investments. Obviously, to really believe that these are "real" investments, you must believe that there is a chance that our currency will collapse and the government will fail and that all hell breaks loose.

I personally don't believe that this will happen. I know people read this stuff and think that people who as doing this are just crazy and paranoid. But it doesn't take a currency or government collapsing to make wish you had prepared a little. In the event of another Katrina disaster, or a big wildfire that cuts off your access to town, you'd be glad that you have water and canned food for a week and some method to defend yourself.

For me, I want to get an assault rifle while I can. I really hope I never have to use it.

 

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[PokerRich]

I was just thinking about this topic the other day. I have money set asided for a 5 year goal and I currently have that money in a Capital One savings account that has dropped from 5% to 2%. I was looking at investing in a muni bond fund like Vanguard's long-term tax-exempt fund. It's returning 4.5% tax free and invests in high quality muni's. Is a fund like this safe? Is it possible to have a 20% loss?

 

[fanocks2003]

I'm curious to the investor sentiment here at the forum with respect to the perceived "safest" place for your assets ... aside from my answer being "My Business", what else?

In which vehicle do you perceive the best place to have your assets tied?

If the market declines another 40%, where do you think would be safest? Least impacted?

Please vote and feel free to comment.

In a high interest savings account. But I would think one should think more in terms of "where do I get the most interest on my money in the shortest amount of time?".

I used to think that "safe" was the way to go with investment funds, but I have come to realize that "safe" is just another way of thinking that money is real. Which it really is not. Money is a made up concept and money can be more than the cash in the bank. Know-how is my currency and the more I get to know, the more I will earn. So the money I have already is money I will invest in as high yielding assets as possible.