Do you think we're in for a really down hill spiral with our economy... standard of life?

Question

Do you think that things are really going to get worse before they get better? I have to roll over $7000... what do I do with it?

Thanks!

Answer 1

I am sorry to say it, but the ingredients to some really bad things in the future are ripe and ready. To borrow a phrase from Tolkien (of Lord of the Rings fame), our future is like a thread on the edge of a knife.

Two easy things are in order for you. First, you might be better served keeping your money parked in a bank that is insured by the FDIC. Second, watch DIA and SPY closely. These are exchange traded funds (or ETFs) that holds some shares in the Dow Jones Industrials companies (DIA) and the 500 companies in the Standard & Poors 500 list (SPY).

Traders will tell you that I'm all wet on this one, but consider that these are some of the strongest and most profitable companies out there. With these you have the advantages of diversification. You don't, however, have any advantages to great and sudden advances (and usually not in the common free fall when lesser company stocks go swirling down the toilet) -- they are too strong and profitable to stay lumped with lesser companies for very long. You can easily, all too easily, do far, far worse. A strategy to consider is keep the cash safely earning interest in the bank until you see some substantial rises in these two benchmarks, then jump into them, but not with everything, just a part.

Answer 2

dollar is at all time low... stock market is killing our futures,

put your money in a savings account.

Answer 3

I say invest half in commodities - wheat, grain, oil, salt, copper, metals.  Other half in financials. They will surely fall further in the next few months or two years. But, long term, should return and return strong.

The best time to invest in long term is during a down turn, otherwise you will miss the recovery.

Answer 4

for sure the future does not look all that rosy.  What to do with $7000?  That is a really difficult question to answer.  If you put it in a safe place, ie CDs for example it will for sure loose about 4 to 6% annually as inflation and give away interest rates take their toll on it.  Bonds will be potentially even worse.  The future of equities is very uncertain at this point, but it is really the only option that will potentially allow you to gain on inflation.  I assume it is a 401k account that you want to role over into an IRA account??  

Although the short term pain might be severe,  I believe that a good long term option is to invest it is a mutual fund that invests in top tier companies with a foreign market.  Several mutual funds come to mind.  

Top on the list would be Vanguard Global Equity Fund.  The fund holds a wide variety of world stocks that are mostly top tier companies.

Also perhaps T Rowe Price Global Stock Fund.  Similar to the Vanguard fund.  

If you think you might prefer a somewhat less volitile fund,  T Rowe Price Capital Appreciation has an eviable track record.

Answer 5

If you an American, then you blame yourself and all Americans elected George Bush as President who is the cause for your economic is downhill. Why you all gave him the mandate to spend trillions to feed all the American army men over there? Bush is suppose to catch Osama Bin Laden but for the damage Osama has done to America. Why Bush went after Saddam Hussain and the terrorist killed so many thousands American soildiers on whoes expences?

Answer 6

We are witnessing the start of an inevitable financial crisis. I think it will take some time to fully manifest itself. What I mean is we will have years of stagflation. This means that the market will stay relatively in the same trading range and be very unstable. It will go up or down 1-2% regularly. At the same time inflation will be much higher than the 3-4% it has been over the last 20 years. The Government will think of more creative ways to not publish the true inflation numbers. People will see their real incomes go down steadily and the middle class will take a hit.

Reasons why this is inevitable:

We are indebt as a country like crazy, and continue deficit spending like there is no tomorrow. A classic example is we borrow money from foreign investors and then give money to their countries by the billions every year. The equivalent to this is that every year you take a huge loan from your bank and then you give your bank a gift of about half of the money you just loaned. You then pay interest on the loan and never pay the principle down. You continue to do this every year.

China will attempt to do things to destabilize our markets with all of the debts they have purchased. The more they begin to compete with us for superpower status the more this will happen.

Our general population is financially ignorant and believes that raising taxes on the wealthy is smart. This is basic class warfare tactics used by Democrats to get votes. It has never worked because the vast majority of the wealthy are business owners. They simply raise the price of their goods to make up for any increase in taxes and pass the cost to the consumer who is the middle class. The middle class will always pay for any tax increase either directly or indirectly.

We have a huge baby-boomer population that just started retiring. They will begin to move money out of stocks to safer investments and thus bring the market down.

The U.S. Government continues to print more money with no backing other than their word it is worth something. They then use this money to purchase goods like oil. That is the main reason that both oil has went up and the dollar has fallen against foreign currency. The world is getting smarter to the fact the dollar is worth nothing. The more money we print the more worthless the dollar begins.