Investment planning for the coming apocalypse 💸

[Nightflyer]

Branching off the following comments:

Trump and Biden face off in first Presidential debate

The problem is now that the markets are open, they are behaving just the opposite. It’s dog eat dog right now. I advise being verrrrrry careful with playing the stock market right now. The jobs reports and other things happening this next month may be doctored and pump things up, …for a while. But when reality catches up and the profits simply aren’t there, we are in for another rude surprise. My bet is that we are looking at the weakest holiday sales season on record since WW2. Because o…

Trump and Biden face off in first Presidential debate

My financial planner echoes that advice.

[navarro]

right now my plays are holding a position in a growth and income mutual fund from american funds and a monthly buy of an index fund based on the s&p 500. both of these are 403(b) retirement accounts. i’m hoping to hold onto the g and i fund until biden clearly wins and cash it in to roll over into my annuity after the market sighs with relief. i’m also ready to cash out and rollover at a day’s notice if things go bad after the election. the index fund has held pretty steady despite the past year. strangely, it’s done better than the market it indexes.

edited to add–

@Brainspore

I’m not sure I’d say anyone “won” that shitshow but Biden lost less badly which is close enough.

i’d go even further and say that biden won because he didn’t lose.

[Wally]

@navarro

right now my plays are holding a position in a growth and income mutual fund from american funds and a monthly buy of an index fund based on the s&p 500. both of these are 403(b) retirement accounts. i’m hoping to hold onto the g and i fund until biden clearly wins and cash it in to roll over into my annuity after the market sighs with relief. i’m also ready to cash out and rollover at a day’s notice if things go bad after the election. the index fund has held pretty steady despite the past year. strangely, it’s done better than the market it indexes.

edited to add–

I like your plan. I am holding half of everything in cash right now, and it is churning my stomach every day to see the markets soar higher and higher - I am not reaping any of that reward right now. But I’m hedging against a fall that could come at any moment… Some would say I am being overcautious… but I figure if the market drops and I can buy in again, then on the v-shape, I will make back that loss effortlessly over a few months. So, it’s a hard game, this one.

[navarro]

my portfolio has seen the internet bust and the great recession. my mantra has long been “dollar-cost-averaging” but it’s a lot harder to maintain calm thoughts now that retirement is less than five years away compared to 30 years away.

our cash holdings take the form of our emergency fund and our new car fund, which are currently both fully funded, one in our credit union and the other in a money market account. everything is paid for-- house, cars. it’s taken 20 years to get here but we’re not so worried about our future as we are about our kids and grandkids. the fact that the grandsons are biracial and look much more like trayvon martin than kyle rittenhouse only adds to our concerns at the present moment.

[docosc]

We are in the process of rolling our 401(k) over to my new employer and the advisor looked at my current positions and said “wow, you are in a really aggressive posture!” I replied that these accounts were set up in 1990 and have not been touched since. Might need to readjust now that I am about 10 years away, eh?

[navarro]

mayhap we should ask someone to move these posts into a new thread like investment planning for the coming apocalypse?

[Nightflyer]

Done!

(And thank you for the ready-made thread title! )

[PsiPhiGrrrl]

I’m curious about investments for those who are not planning to stay put. There have been questions raised elsewhere about the ability to access funds from another country, safely move money (without running into problems like the one below), and using cash alternatives. Hopefully, folks here will have some input on that.

The DEA seized a retired railroad engineer's life savings

This has more details on how the DHS, CBP, TSA, and ICE target people traveling with large sums of cash. To cut off a big source of revenue to those agencies, we need more stories that raise awareness among travelers that they must fill out the proper forms: What jumped out at me was that proper reporting of the money would’ve kept 50% of it out of their grubby hands.

[Wally]

@navarro

but we’re not so worried about our future as we are about our kids and grandkids. the fact that the grandsons are biracial and look much more like trayvon martin than kyle rittenhouse only adds to our concerns at the present moment.

After “stand back and stand by” I am wondering about the best ways to prepare for the next few months, especially if Trump engineers a win. Personal protection is one thing, but also the economic uncertainty that whole scenario will usher in.

It’s a giant:
???

@docosc

Might need to readjust now that I am about 10 years away, eh?

If you’re going to stay in mutuals/ETFs, then think about what composition of those funds seem best suited to long term growth. Biopharma? Tech? Industry? But all of those have shown a lot of volatility in the last 6 months. Or don’t do that and throw it into money market and wait it out. I am 50/50 growth/money market right now. So, if the market tanks, only half of my retirement tanks. But the other half is just sitting there idle, not doing anything really except a few dollars now and then. It’s massively frustrating and there are no sure things.

[anon21100188]

I hear ya re: the split on growth and cash. It was nice to have a chunk in cash back in May to go bargain shopping, and it might be quite nice to be able to do the same in a couple months if/when the holiday numbers look as grim as they may look.

But it sure seems to me that the behemoths that prospered in the last six months are probably going to be in a pretty good position prosper next year as well.

[navarro]

@Wally

If you’re going to stay in mutuals/ETFs, then think about what composition of those funds seem best suited to long term growth.

those are my italics. i would think of 10 years or so as more of medium-term. the growth and income fund i’ve been holding is the only residue of my earlier days of retirement planning. it was the most “conservative” fund of a cluster of funds i put money into for 20 years. i rolled two of them over into the annuity 3 years ago and stopped buying new shares of this one. because of it’s composition and management it has really been a great performer turning $20k of investment into just under $200k of current value. it could lose 50% of its value and i’d still feel like it was worth the risk i’ve taken holding it. and as i implied, i have things arranged with my annuity folks so i could get out of that fund and roll it into my annuity in 24 hours.

at the point in things the good doctor is at, the balance likely needs to start shifting from growth and into protection of principal and liquidity. there’s probably time enough to hold onto some risk but the other issues need to be considered.

[Wally]

@navarro

@Wally

long term growth .

those are my italics. i would think of 10 years or so as more of medium-term

Hah! good catch. Considering how volatile and uncertain things are right now, I was using long term growth to literally mean anything beyond a year or two from now. Seriously. Things are that freaky.

[Wally]

ADP report today and unemployment numbers tomorrow and Friday. Today’s rise is probably just in anticipation (trying to eke out profit today).

U.S. Economic Calendar - MarketWatch

But again, is the unemployment report going to be doctored? I bet it is being altered somewhat because it’s right before the election.

[Akimbo_NOT]

‘Mistakes’ will be made.

From June…

There’s A Glaring, Misleading Error In The May Jobs Report: U.S. May Be At...

[docosc]

They (TIAA) are suggesting a stepwise shift to a money market account at ~3%. That seems very conservative, but still, a predictable yield in what I suspect will be a very volatile period is not a bad idea. My biggest concern is having a big chunk evaporate, as I saw that happen to one of my partners in 2008, and him having to put off retiring for 8 years to make it up.

[knoxblox]

@PsiPhiGrrrl

I’m curious about investments for those who are not planning to stay put. There have been questions raised elsewhere about the ability to access funds from another country, safely move money (without running into problems like the one below), and using cash alternatives. Hopefully, folks here will have some input on that.

I can throw in my own personal anecdotal experiences, if it helps.

For the first time in my life, I’ve been in the right place at the right time (living/quarantining in Tijuana, operating out of a business address in San Ysidro — immigration has no issue with this since I showed them I’m helping out the family I’m staying with). The federal extension to self-employed individuals and other at-risk workers like restaurant servers has given me over $10k that I’m utilizing in currency exchanges across the border, with an average maximum gain of $300-$350 with each trip.
Physically, I admit it’s a risky trip (theft), but I have been sure to use cargo shorts with very secure pockets that I can run in.

On past experience in Moldova and Ukraine, it’s not difficult to access money with a debit or credit card, but although banks will hit you with a smaller withdrawal and exchange rate than ATMs, it’s still a percentage. If I can travel next year, I’m considering looking for an international bank to use this time around.
I get past CPB fine at the Mexico border due to my white & nerdy appearance, but I definitely wouldn’t want to chance it at an airport. An international bank would be my choice.

ETA: I just want to add that the Department of Education is taking its extensions to the end of the year, so I’m putting everything I earn above that $10k into my school loan payments. I think I will come very close to paying all of it off without penalty. After that, I’ll work on a retirement fund and likely spend my last days outside the US.

[PsiPhiGrrrl]

@knoxblox

it’s not difficult to access money with a debit or credit card, but although banks will hit you with a smaller withdrawal and exchange rate than ATMs, it’s still a percentage. If I can travel next year, I’m considering looking for an international bank to use this time around.

Thanks for this. I am considering Canada or Mexico, and there’s a big advantage in a warmer climate. However, border crossings seem easier to the north (not sure if that’s different via ports). Using ATMs sounds good, as long as nothing unusual happens with the banks. Will have to check out international banks, too, and hope they don’t give me sticker shock after decades with a credit union.

The possibility of regular income during my “gap” years is important, because I’m too young to retire (according to TPTB). Would like to leave my investments (a mix of rollover index and industry sector growth funds) in place, though. After Enron, I made sure my retirement plans weren’t full of company stock. When Lehman Brothers went down, I split up my accounts to avoid having all my eggs in one institutional basket.

Downsizing and agressive paying down for 15 years wiped out my major debts. So, in theory I could get a house sitter (and maybe become one wherever I’m going). Would also have to navigate whatever red tape comes with keeping up Social Security, taxes, passport, etc. from a distance.

[navarro]

as i mentioned in another thread, argentina has some very favorable banking and residency features if you are retired or approaching retirement. even citizenship is fairly convenient if you have some sort of a guaranteed pension income. infrastructure and corruption levels compare favorably to mexico, not so much to canada.

less welcoming if you want to find a working residency, otoh.

[PsiPhiGrrrl]

@navarro

argentina has some very favorable banking and residency features if you are retired or approaching retirement.

The main problem for me is getting there. I don’t fly anymore. I’ve read accounts from people who have made trips to South America from the US by land and sea. Definitely slow travel, and maybe higher risk in times of unrest.

From here (northeast), Canada is closer than Mexico by car. However, if things really get worse either one might be more accessible by boat. I’ve considered the Bahamas, but coronavirus and healthcare concerns reduce the available options:

https://www.cnn.com/travel/article/us-international-travel-covid-19/index.html

[prooftheory]

Will Prime Day give a hint of what will happen on black Friday, or will it be basically irrelevant for figuring out consumer confidence etc?