what to do with mutuals?

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Well as a new person here I am sure this issue has been addressed in the past but missed it.We have money invested in mutuals for our someday retiremant they are in equity funds, as a lot of Y2k literature seems to point to a crash in the market we are considering cashing them out any suggestions for a more secure place to put money(yes we are considering under the floor boards). We don't have much and as this is our life savings I would appreciate any advice. I realize worst case scenario this would be probaly the least of my worries but am trying to prepare on all fronts.

-- lbanks (mlbanks@hotmail.com), January 17, 1999


This is a link to Westergaard's Investment page. http://www.wbn.com:8080/Extra/Y2KWatch/index.htm

This is pulled from an old Y2K Weather man email... visit his site at: http://y2kwatch.com/

In preparing one's financial assets for Y2k, I have placed the most important weightings on US Treasury bills, precious metals and short positions in equities. How will these stand up to deflation? In a nutshell, US Treasury bills will be a pillar of strength, precious metals will decline but can be expected to maintain relative purchasing power and short positions in equities should do extremely well if deflation ushers in a prolonged bear market.

Therefore, in order to sidestep the deflation ambush, it is necessary to get out of stocks (unless you are one of those deer frozen in the oncoming headlights of the recent market meltdown) and begin to build the US Treasury and short positions of your portfolio. Precious metals can wait a bit since deflation will bring their prices down. Ironically, falling precious metals prices is a confirmation that deflation is for real. Of course, Y2k panic buying of precious metals could mitigate these price drops, but this is not likely to occur until early or mid 1999. The short positions in equities can be assembled in a variety of ways. One of the easiest approaches is to buy shares in one or both of the following mutual funds: Prudent Bear (BEARX) and Rydex Ursa (RYURX). Both funds can be purchased into retirement accounts. Prudent Bear has lower published investment minimums than Rydex Ursa and is configured to outperform Rydex Ursa in a protracted bear market.

I hope that this helps. There are numorous sites devoted to the financial aspect of the Y2K mess. I just started my first job out of school in December, so I have a totally different set of problems. I'm going to keep as much cash around, in small bills, as I can afford. I'm also looking into buying some gold and silver.

Good Luck

-- d (d@dgi.com), January 17, 1999.

Thank you for your analysis, d. I'll be looking into the above probably this coming week sometime.

This reminds me of a story my dad tells me about my grandmother during WWII. My grandfather was a ham radio operator and spoke many languages fluently, so he was contracted by the government to work as a translator and ham radio operator (I don't think he was a spy, but you never know ... ). Anyway, he also worked at Westinghouse and was receiving lots of overtime, so Grandma stashed away all his overtime and gov't work $ in different places around the house. She had accumulated quite a bit of money, but the union at Westinghouse decided to strike, so Grandpa was out of work for 3 months. That was it for all the money Grandma had stashed. It's pretty sad, because they raised six kids and really could have used that savings.


-- jhollander (hollander@ij.net), January 18, 1999.

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