Economic recession, declining dollar, rising gas prices, growing budget deficit… In the times like these I wish I was a small child and didn’t have to worry about anything. But I am not and this is why I am spending this night trying to figure out what my investment strategy should be for the next 2-3 years.
This is a really tough decision for me. For my IRA account the investment vehicle of choice hasn’t changed, I stay loyal to stocks. For the shorter term savings however I consider these options:
Stocks and Mutual funds
You know the drill. Open an account with a brokerage and invest in the names you trust. The stocks that perform well in recession are staples, health care, energy, tobacco & beverages and gambling. VICEX is the mutual fund that tracks many of these companies. You might also want to consider some foreign stocks. The economies of China, India and Russia are booming. Also check out these recommendations from Seeking Alpha, a very popular blog among investors.
CD’s and Savings
The rates banks offer on savings accounts and CD’s keep going down and the last 75 points rate cut by Federal Reserve has brought more new announcements. I just received emails from ING, WaMu and I am sure there were many more that followed. However if you look just a little harder you can still find savings rates well above 4%. One of such bargains comes from Natinal City who currently offer a 48 months CD with 5% APR. A great resource for tracking these offers is the Bank Deals blog.
Precious Metals
This is a venue which I have avoided so far. Gold has always looked too expensive and I feel too uncomfortable with other alternatives. However I think I found a silver bullet and it came from nobody else but Robert Kiyosaki, the guy who wrote “Rich Dad Poor Dad”. His last article on Yahoo Finance is somewhat gloomy but if you skip the “inconvenient truth” of the first part, the last two paragraphs offers some sound investment advice.
Silver is consumed in many industries, and it’s reported that the world has less than a 10-year supply of it left. That’s why I believe silver is currently one of the best investment opportunities there is — even for people with limited financial training.
Conclusion
I don’t believe in fortune tellers. No one can predict where we are going to be in a few years from now. Therefore my strategy will probably be a mix of some of these investment vehicles. Have you given it a thought? Please share your own approach in the comments.
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