Investing for Retirement (Moderates Only)

pasttense · Coal Joined: Jun 14, 2008 Posts: 10

I expect to be retiring in just a few years and am very
confused as to where I should have my savings.

Previously my policy was to be in a combination of:
1. Broad based ETFs (exchange traded funds) generally
designed to match the market as a whole.
2. TIPS (inflation protected bonds).

But I see the market in general just ratcheting lower and
lower as more and more bad news appear. And the inflation
adjustment for TIPS is just a small fraction of the inflation
I experience (my major purchases are in the areas of
health insurance, food, energy). I expect inflation to be
rapidly increasing.

So I am looking for advice. Anyone care to share their
philosophies/plans?

(Right now I am thinking of a combination of cash-CDs
/Commodities (gold, oil, natural gas, agricultural..)/
EnergyStocks/ Recession-proof stocks (areas like
alcohol, health, consumer staples...))

PS. I know a lot of people here are either doomers or
cornucopians. I would appreciate it not to receive advice
based on those two philosophies (things like stockpiling
physical goods or investing as usual).

Thanks.

threadbear · Expert Joined: Jan 22, 2005 Posts: 7266

BigTex

Permanent Portfolio mutual fund (PRPFX).

Best inflation adjusted returns in all economic environments with surprisingly low volatility.

25% precious metals
25% long term Treasuries
25% equities (with emphasis on energy)
25% cash or cash equivalents (including Swiss franc assets)

I might throw a little into an energy ETF as well.

Any other questions?
_________________
Smile

Cashmere · Light Sweet Crude Joined: Mar 27, 2008 Posts: 1499

FoxV

Here's my breakdown which goes a bit beyond the typical investment positions

25% PMs (physical, I am a doomer after all)
25% equities (typically direct online investing with ETFs, no Mutual funds)
25% Debt payment (only have the mortgage left)
and finally
25% efficiencies

This is the unusual one, and includes any purchase that can give me a return on investment greater than 5% (5% being a worst case scenario). This can include things such as a New high efficiency refrigerator or Blower for the furnace (best yet is a hot water blanket that yielded 300% return per year). The nice thing also about efficiencies is they have Inflation protection baked into them (and there's lots of grants for them these days in Canada).

For my equities allotment I'm also considering a "Managed fund". These are a step above mutual funds where you select your risk/time line, and they invest the money according to your needs and market conditions. The funds tend to perform as well as mutual funds in the same risk class, however the difference is that if you don't like where the market is heading you just call them up and tell them to move you into a different risk class.

So when the market is good (last 5 years) You go high risk/return. Then when the market goes bad (next 5 years) you go low risk/return. This can gain you maximum growth and minimum loss (which you typically can't do with any mutual fund)

This is what my bank offers:
For the BigWigs out there
RBC Managed Portfolios
and for us J6Ps
RBC Select Portfolios

btw, if anyone has a comments about Managed funds, I'd appreciate them as I have not looked into them completely yet

Another Note is that Precious Metals now qualify for RRSP tax breaks in Canada. Unfortunately its a pain in the butt to do this with physical metal, so its pretty much only for those who buy gold certificates (which I won't touch because after all, I'm a doomer)

FoxV

roccman

mattduke · Light Sweet Crude Joined: Oct 28, 2005 Posts: 1184

The most difficult thing to understand for people approaching retirement is that US treasuries are one of the riskiest investments you can make at this point in history. Owning cash or CD's in addition to your commodity-oriented holdings is not diversification. It is di-worse-ificiation. And yes, your bullion belongs in your possession.

roccman

sicophiliac

Try energy ETFs like FAN or OIH. OIH is an oil services ETF which should do very well as we suck out every last drop of crude oil we can from the earth, (FAN)wind energy ETF should do as well as anything else considering its one of the few cost competitive renewable energy sources out there right now and growth is very strong globally. I just bought some FAN that well diversified and should do well providing we aren't in for the most doomerish of futures. If that happens money (us dollars in particular) will likely be almost worthless so its not like any sort of financial investment would pay off. If your of that mentality I would say invest in arable land near a water source and away from civilization, learn to hunt, garden, build a greenhouse, invest in solar panels, lots of warm clothing, medicine, guns etc.

heroineworshipper

At current 500% inflation, would plan on still working part time & not accumulating any buying power unless you're a landlord.
_________________
People first, then things, then dollars.
There will be enslavement & cannibalism.

Revi · Fusion Joined: Apr 25, 2005 Posts: 3112 Location: Maine

I like FoxV's idea of spending on efficiency. You can't go wrong with that. Any kind of more efficient appliance or vehicle you can get will pay back in hard times. We have a car that gets 43 mpg, and appliances that are very efficient. It's the only way to go.

I like solar panels and things as investments as well. A solar hot water system will get you through hard times smelling like a rose!

I am not as crazy about equities as I was. I liked solar stocks, and energy companies, but mine haven't done anything in the past six months. It may make sense to buy when the market has hammered them down a bit, so they can pop back up again.

I am thinking of retiring in 10 years. I see it as a nice carrot on a stick which keeps me pulling in my traces for a while longer.

I'm only planning on 10 years of retirement. After that I'm going to die or something.

You can only live one day at a time. I used to worry about nonsense like retirement a lot.

Now I live each day like it may be my last.

Retirement may come. It would be a nice surprise!
_________________
Deep in the mud and slime of things, even there, something sings.

alfonso2501 · Coal Joined: Oct 10, 2007 Posts: 8

"Lifetime pensions to lifetime work"
If you've got the bandwidth & the time I'd like everyone to watch the PBS special at the link above. It's about how Americans are not being proactive enough in funding their retirement & depending upon their employer & government to help them out in their golden years.

BigTex

roccman