Commentary – March 7, 2009 – The Worst is Yet to Come!
Previous commentaries in 2007
& 2008 have cautioned investors that the market would be a shaky
environment for the individual investor. Such predictions have come true.
At this time, no mutual funds are
recommended and we have removed the list from this site.
Move all money into insured money
markets or certificates of deposit.
Preferred bank stocks will cease
dividends, and unless they are cumulative preferred there is no guarantee that
they will ever Ôcatch upÕ. Liquidate these as well.
Possible Income Safe Havens: Pharmaceuticals, Oil & Oil
Equipment, Utilities, Natural & Propane Gas suppliers. FNMA Bonds, Freddie Mac bonds,
Utilities.
Bond Funds: only Investment grade
bonds may hold up or those backed by the US Treasury. Junk bond funds will
continue to decline as the underlying corporate bonds that make up the funds
default. Treasury Strips may perform
and are secure. Savings Bonds are backed by the Federal government and are a
safe haven. My brother bought gold a few years ago – donÕt I wish I had
as well!
Bank stocks: well, Citigroup is
now below 1.00 per share. Does it make any sense to sell, rather than hold. Assuming the Fed will NOT let any bank go under, these
may come back in 2-5 years.
I remember reading a book by Harry
S. Dent about 5 years ago. He predicted to a ÒTÓ the 2009 crash and subsequent depression, which he said
to be worldwide. His website and book link are at: http://www.hsdent.com/
For most investors 50+ in age, the
days of stock market investing is OVER! Secure what little you have left in
insured instruments and CDs. ItÕs gone back to the days of they way our parents
and grandparents invested only in Bank CDÕs. I remember when my Mom passed away
and I went to banks to cash in the CDs that she had put money in. Wisely, she
spread it over a number of banks, never investing more that $ 30,000 in any one
bank. She never lost any of her principal, and had monthly income to supplement
her Social Security. Sadly, we
have gone back to those days.
HereÕs an interesting commentary
on the CNBC investing channel: http://www.thedailyshow.com/video/index.jhtml?videoId=220252&title=cnbc-gives-financial-advice
Good luck!
KPM