Personal Finance & Money Asked by Ronald on February 8, 2021
Where should a conservative investor put his money when:
My fears are higher inflation, interest rates will increase due to increased borrowing and there will be a major correction to the stock market some time in the near future.
For "truly big" questions such as this, you have to formulate an opinion on issues such as:
https://en.wikipedia.org/wiki/American_decline
You predict:
there will be a major correction to the stock market some time in the near future
If one really thinks that,
You could go long, but, keep tight stops (not a perfect strategy, but it will "probably stop catastrophic loss"
Depending on what you mean by "near" future ...... short it.
However,
Hence,
say the basis is 100 today
it runs up to 200
as you wisely and correctly predict, there's a disastrous pullback to 70
then in merely 10 or 20 years, it is up to 500 or 1000
If those four things happen, what's the best thing anyone can do? Indeed, buy today at 100 and forget about it. If you try and guess where the "dip to 70" is, you'll miss it all.
(I don't advocate or anti-advocate that view, I'm just outlining it. Thus, if you believe in "American Decline" {perhaps blame wikipedia?!} you would think that view is stupid. ie, in the next 30 years America will become as crap as other failed empires ... British, Russian, Roman etc. In that view, it would be throwing your money away to put you "100" in today.)
Answered by Fattie on February 8, 2021
debt is and will increase with this new administration
Faster than during the current administration?
My fears are ... there will be a major correction to the stock market some time in the near future.
Thus, the question is: how conservative are you?
My money is about 50/50 bond/equity funds consisting of:
The goal is asset protection (won't fall as far during a correction) with growth potential (but won't grow as fast during a bull market) as I stare at retirement. Of course, I well understand that my strategy might utterly and completely fail, especially if the economy really tanks, and I accept that risk.
Answered by RonJohn on February 8, 2021
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