It seems we all share some things in common.. wanting a sense of purpose, having little or no debt, having some resources but not enough to stop worrying about income levels, and most of all, not being comfy with choices out there for investment.
I've sat mostly in cash this last year having received a small inheritance and not wanting to make any rash judgments. In addition, I think this "recovery" has been bought and paid for by federal stimulus in the form of borrowing, tax cuts, and military spending. All of that coupled with balooning home values pushed by low interest rates has given people a sense of affluence that stimulated spending, but in my opinion has been built on a house of cards. For this reason, I've been unwilling to own either bonds or stocks this last year. I've been strictly day-swing trading.
I'm very concerned about a meltdown of the US currency due to its abuse by excessive trade imbalances and deficit spending. One-half of our monthly debt refinancings are bought by foreigners. Imagine what would happen if Japan and China boycotted an auction. If we keep printing money, investors will want higher rates to offset the drop in US$ value. Somehow, the US$ has defied gravity; I just don't understand how. I guess I should hold some gold/gold-stocks as a hedge to currency meltdown, but I really don't know that sector to be able to invest wisely.
So here I sit with cash in bank, playing silly trades when I need to get my nest egg producing $60-80k/yr. I hope by discussing all this stuff here and sharing our experiences, we can all get some direction.
Dale Baker has a thread where he invests in value stocks and has done well. Perhaps we should pay attention more. Many of his selections are very low volume issues that I've felt uncomfortable with. Perhaps Dale would be willing to elaborate some on this thread about the criteria he looks for in stocks and his strategies for entry, holding period and exit. |
