I had an interesting conversation with my broker this morning about my IRA and bird flu. His take is that a pandemic will be only another “risk event” like WWII, the Cuban Missile Crisis or 9/11, and that the markets will recover fairly quickly once it’s all over. I took some time to fill him in on the probable disruptions of infrastructure and the toll on the labor pool, and what that will do to the economy. My stand is that once we get the clear signal that BF is H2H with the acknowledged infection of health care workers and larger clusters, I would like to pull my retirement money out of the stock market and put it into “safer” investments. He remains unconvinced, said that he would “strongly advise” against moving my money, but that my comfort level was the most important thing and he’d do whatever I wished (as he must do - it’s my money!).
Anyone else out there having the same thoughts/conversations with their brokers?
I recently transferred a portion of my monies from a stock fund over to a more conservative teasury with a guaranteed interest rate. I am leaving monies that I won’t need during the pandemic in the regular mutual funds. I do agree that the stock market will come back but that is not going to do you any good if you will need the money. I would rather have money that I know is there, I know what the interest rate and I know it will stay the same no matter what. I do not want to add “stock market jitters” to the stress that we will all be suffering with.
Some people are advising investing in companies that make a much needed product in a pandemic. I think this is foolish. Some of these companies are very small and we don’t know if their infrastructure will hold up (absentee employees, non-shipments, etc). If you have extra money that you want to literally “play the market” this is fine, but the thought of making money in a pandemic is really risky.
International fund managers are beginning to shift their investments due to what is happening to the Hong Kong Market. I am keeping my eye on what they are doing. I work with financial people all day long - most are making sure they have some secure investments. They are staying diversified, but bumping up the amount that they have “on hand”.
P.S. Your broker is not going to make any money if you don’t have your money in stocks. I would be very worried about “the source” here. Make sure you do your own homework. Only you know your risk tolerance and only you know what you want for your family; will your employer keep you on; will there be a regular paycheck; what is your mortgage and bills, etc. The stock broker is only sure of one thing … his own commission. I am not dumping on stock brokers (some of my best friends are), but we all need to do our homework and know what works for us. If you want to invest in stocks, then a broker is the way to go. I don’t think they are the best source and how to take care of yourself financially in a pandemic.
Janet — me too. I had to take the reports by Sherri Cooper of Bank of Montreal/Nesbitt Burns to him, accessible through FluWiki, to sort of educate him a little bit. I sometimes wonder if investment people ever give any but rosy-coloured outlooks. But I took Sherri Cooper’s advice and put it into real blue-chip and pretty safe portfolio. He was reasonable about it. Maybe he will learn something.
I just don’t think they are paying enough attention; not getting educated, “believing their own spin” as someone on the radio put danger from another context.
The Congressional Budget Office macroeconomic report on the expected influenza pandemic expected (even with their unrealistically low mortality expectations, btw,) an “average post-war recession”. What’s that??
(Also, if we all took our money and went home, brokers, financial advisers, ect, would be out of a livelihood… Every time they hear the public “panic”, uh, start to ask difficult questions, they have to make “don’t worry; business as usual” noises…)
Janet - My retirement fund is diversified in a variety of investments through TIAA-CREF. About 55% is in stock equities. This is something that is long term, I have at least 8 years until I will be ready to retire. If you were me, would you move some of the funds in stock equities into money market funds? I can also move it into the guaranteed annuity fund, but onc I do that I can never move it back out. My feeling is to just leave evrything as is. If the pandemic holds off, and as I get closer to retirement, I will be moving funds from equities to the annuity fund to guarantee a stable base for retirement.
Hillbilly Bill: In my opinion, if you don’t need the money to live off of during a pandemic (maybe a year in length), then I would leave it. TIAA-CREF is a wonderful organization with a great reputation. They would not gamble with your money. I just think if we might need some of our retirement money to “make it through”, that this particular amount of money should be in something that we know is safe. This is especially true if we have the option of moving it back should this thing blow over. The stock market has, historically, been the way to go but I do think it will take a big hit in the interim. Just too scary for my risk tolerance.
Janet - Understood, thanks for your advice. I can’t take any of this money out until I retire so I will just leave it as is and ride it out. Actually, if I’m still employed during the dark times, I will more than likely be buying equity shares because they will eventually go back up. Thanks again.
Bird flu or not, the U.S. economy’s in a funk anyway and getting worse. From the reading I have done I would say that gold is a very wise thing to consider moving into, at least partially. Every day somewhere between 3–4 billion U.S. dollars are required to keep the U.S. economy afloat, and that all comes from foreign investors.
There are easier ways to buy gold, now, too, with the internet. If the economy hyperinflates (as a minority of experts think could happen) or even continues to inflate as the real value of the U.S. dollar diminishes, gold will keep its value.
Another good option may be to diversify into other currencies; get money out of strictly U.S. dollars.
Gold is now at a 25 year high. If I were considering a move into gold, I would not do it now.
But market timing isn’t ever really a good idea. Gold will keep going higher. One of the CEO’s of the biggest gold producers (I think it was Newmont) estimated he’ll see it at $1000/oz in the near future (I forget the exact timeline; something like 1–2 years).
There are always corrections though, so it is possible to buy it on a correction, for a bit cheaper.
But the other reason it’s going to keep going higher is just that the U.S. dollar is inevitably sinking lower.
As of this past fall, they’ve stopped publishing M3 (compare this with CDC hoarding sequences or governments not sharing their birdflu data); M3 was the clearest sign of how much money is in circulation. (and the more $ in circulation, the less value it has…)
Gold is a very emotional investment. It has been historically used as a hedge against uncertainty. For the average investor, gold is very risky. The price can respond dramatically to news items or profit-taking in a single trading session.
Ok, reading about the investment issues, what would be the best way to handle my husband’s retirement savings given the uncertainty’s of the pandemic.
Watching and Learning,
You’ll have to ultimately consult with yourself and a financial worker to sort that out, since your situation is complex unto itself and it wouldn’t be right to suggest something that may not be right for you.
I am no investment expert, I don’t work in the financial industry, and I’ve just done reading on my own for my own interests and situation. So just to get this disclaimer out of the way, don’t be afraid to do reading on your own if you haven’t. You’re the expert!
Having said that, some financial “experts” right now suggest the best thing to do (in lieu of the teetery U.S. economy, that is) would be to focus on preserving wealth, rather than trying to build it.
Some ideas (people from different backgrounds, knowledge-bases will disagree, of course):
Some ideas that have been warned against:
Just some ideas…. but you should do the reading on your own to properly situate yourself… follow some of the financial commentary using the google news aggregator, etc.
Seems to me that any advice re: the faltering U.S. economy would be even more sage now re: possible pandemic.
Oh - and, depending on what you think may ultimately happen, it may be a good idea once again to keep a store of “cash under the mattress” —
Thank you for the astute response!
No problem!
I would suggest hanging out in the financial section in the local Barnes and Noble, if you’re near one… you’ll see all sorts of books for all ranges of readers and situations. I say it’s a good idea to invest in a couple if you haven’t and just beginning reading on what you need to know on your own (I’m not sure how much/what you’ve already read or not). Then you can go from there.
I would really advise against just putting blind faith into a financial advisor who ultimately has committments to other things, not YOUR MONEY.
Watching and Learning: Are these funds “locked” into a 401K or similar vehicle?
Florida1: They are not “locked” but for now in a holding pattern in a portfolio being managed.
Interesting thread. I have posted before that I am pretty much a heads down trader in the market to keep me amused as I move into my dotage. I belong to a paid for message board and some of us keep the other members apprised on the movement of bird flu. We are teased as the black helicopter California wackos, but I also get private messages asking for links and advice on preparations.
Here is what I am doing with my money. I am 61 and use my IRA to supplement my pension. I have set up an automatic withdrawal money link from the IRA to my checking account monthly. I am also planning to move some cash funds to a savings account for easier local access (in addition to whatever cash I chose to keep on hand). I have also set up auto payments for almost every utility bill. If chaos rains, its pretty much likely that the lights will be on (if there is power to drive them) and I will have funds show up in the checking account.
As I enjoy messing with the market, I am involved several hours a day watching and trading. A lot of my money is invested in Canadian based companies in oil and gas and metals based commodities. If the stuff hits the fan here, I will dump any US based investments I have and go to cash, and initially watch the oil and gas carefully. I will keep an eye on how the metals will fare, but I would rather sell and buy back in later than crash and burn in the market.
Like you all, I give credibility to Sherry Cooper and Don Coxe of BMO Harris Nesbitt Burns.
No offense to anyone here who may be brokers, but im skeptical of everything im told when I speak to my 401k broker. Im certainly not a guru but those whom are close to me are investors and during the decline in 2001 I pulled my 401k investments out and put them in the bond/ money market plan during that time and it saved my butt by doing so. All brokers should have this option available to you when you open an account, thats what the bonds / money market is there for (stability). You should be able to freely move them from one into the other through your same broker.
Some brokers will try and talk you out of it and it is usually because of the commisions they make fromn you whether you make or lose money.JM2C
For the pandemic I believe that FDIC insured or U.S. treasury investments are the safest. Also, most brokers are paid on a commission basis. So decide for yourself what incentive this might be.
The most important investment in a potential pandemic is your health and safety. Spend your resources securing these first. The next most important investment is your income. Determine your income status in a potential pandemic. Evaluate whether you should pay off credit cards or mortgages if you might lose your job and, hence, any cash flow.
Invest in some skill that will be of value in a stripped-down economy. Make it a hobby that could become a vocation. Woodworking, gunsmithing, “truck” gardening, animal husbandry, sewing, etc. are some options that come to mind. If we get hit really hard, it could be a while before your old talents have any takers.
Otherwise, as I have said before-Physical Gold, Physical Silver, Cash (in the mattress), Treasury “I” Bonds, and some Certificates of Deposit in rock-solid, FDIC insured institutions. Expect to give up something in order to secure the best possibility of security, if the worst happens. You can not fine-tune this adjustment of your portfolio so that it is a no-lose proposition for you.
Sometime in the next ten years there is a very high likelihood that a pandemic or some other worldwide calamity will make these moves seem very smart in retrospect. Are you willing to give up some of your free-spending ways, the baubles of consumerism, in order to better secure your future and your family’s future?
If the worst happens, you will have to be lucky, smart, skilled, and flush with viable assets in order to have a chance of landing on your feet.
“You can not fine-tune this adjustment of your portfolio so that it is a no-lose proposition for you.” - Medical Maven
Totally correct. Every portfolio, pension, and income will be scared by a potential pandemic.
“Invest in some skill that will be of value in a stripped-down economy. Make it a hobby that could become a vocation. Woodworking, gunsmithing, “truck” gardening, animal husbandry, sewing, etc. are some options that come to mind. If we get hit really hard, it could be a while before your old talents have any takers.” - Medical Maven
Very insightful. Also workers in the following fields: delivery, medical, mortuary, repair, education, security, resale, legal services (bankruptcies), pawnshops, auction firms, etc.
Older thread, closing for speed purposes.
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