Hope you saw my qualification/retraction on that URL.
In all seriousness, as best I can judge, the stock market is a terrible place to be--as the title of this thread assumes. Only three times in my life have I said this with confidence: 1969, 1973, and 1987. I have the letters that I wrote to the trust department of the bank that was managing my mother's money in 1973 and 1987. Of course they wouldn't pay much attention. In that business it's more important to be fashionable than to be right, if you want to keep your job.
I think anyone in stocks should get out, pay the capital gains tax, and bank the money, or, if more adventurous, short SPY or buy BEARX. Anyone with stocks in an IRA should sell tomorrow ince there's not even a tax liability. (My one exception is some speculative small oil companies and oil and gas royalty trusts, held as a hedge against another oil crisis.)
Our family is positioned (approximately)as follows:
15% in family home, cars, etc., small mortgage remaining
45% in bond or bond-backed retirement accounts
5% cash, money-market, insurance cash value
10% in oil royalty trusts with generous cash flow
10% in short-against-the-book stock positions
5% US treasury strips
5% speculative oil companies
5% or less, gold and precious-metal mining stocks
Not included there is BEARX, since in a sense it is a negative bet against the market. The present value is maybe 8% of the total and would go up rapidly with a market decline.
But there in NOTHING there that is tied to the general stock market indexes. It may well be that 2-3 years from now we will be 60 % in stock mutual funds and buying on margin. All depends on what happens.
Lots of good companies, but almost all too pricey.
Anyway, those are my ideas of "Investing in [the start] of a Bear Market." |
