Foreseeing and preparing for the next fiscal meltdown.

[BIRMANBOY]

Speaking seriously, yes it is possible, I actually do respect investors with an eye to the future and whatever it holds. If I was of that mind my list of positioning strategies would be as follows. (i'm in brackets at the end)
(a) keep a couple of thousand cash mixed denomination bills in a jar in the back yard. (yes but you'll never find it)
(b) make sure our mortgage was paid off (yes)
(c) Make sure you keep an "earthquake" emergency storage full with all the usual things (yes)
(d) Keep a functioning bicycle available (no not yet)
(e) try and stay in shape (yes)
(f) try and get to know the neighbours (no not really)
(g) Diversify investments as much as possible even if one sector is not particularly productive (yes)
(h) Don't put/keep all of you money in banks (no way)
(I) always have a cushion fund of 3 months accessible if problems occur suddenly (yes)
(j) if you rely/need medications...try and maintain 2-3 month cushion (need to do)
(k) if you are a "worrier" or thinking impending doom is just around the corner position yourself with that in mind so you wont be stressing yourself out. (not applicable)
(l) if you are one of the above think seriously about trying to mitigate some of that with some counselling/mentoring.....while its great to be aware of future problem areas, I don't think its productive to be overly concentrating on protection ...too much protection means the investing cycle is probably going to stagnate...maybe for the rest of your life. (not applicable)
(m) more specifically regards investments...nothing wrong with investing in your hobbies, trade, skills, educational qualifications and other ways or methods of making money..for example..learning how to fix/service your own car (or others). Get a skill so you can do your own plumbing/painting/electrics/. Learn how to make and sell wooden do dads on trade me.... the list goes on. As KW mentioned somewhere turn a hobby into a money making opportunity. Becoming diversified means above all not having to rely on one method of getting income. Income from shares and bonds is just one way. I'm retired but still making more working couple of days a week , than I'm getting from my investments.
(l) lastly recognise that investing is not really about making a killing..its about compounding growth and its much easier to make 6 or 7% per annum and then let it work for you.
Obviously everyone will be in a different position both mentally and financially. Good luck to those finding the way that works for them.

[winner69]

Birman me old mate

Hope j) means crates and crates of whiskey and champagne or whatever

[BIRMANBOY]

W69 I'm one of the few that don't smoke or drink so have saved tens of thousands over the years. However am very fond of cashmere sweaters so have stocked up on those..have about a five year supply of new ones on hand. Hong Kong in Sept so will be stocking up again. I can always sell them on trade me for a tidy profit in emergencies. One could probably even make money on booze...buying the good vintages by the cases.. holding for a few years and putting them in auction....well whatever was left anyway

Birman me old mate

Hope j) means crates and crates of whiskey and champagne or whatever

[dingoNZ]

The S&P 500 has nearly tripled since plunging to a 12-year low during the financial crisis in March 2009. The Nasdaq closed at a record two weeks ago, when it erased its losses since the dot-com bubble in 2000.
The Standard & Poor’s 500 Index trades at 17.6 times forecast earnings of its members, above the five-year average multiple of 14.5 times. The benchmark equity gauge has climbed 1 percent this year, closing at a record April 24, even amid a slowdown in U.S. economic growth during the first quarter.
Yellen, speaking at a forum on finance in Washington on Wednesday, said that after holding rates near zero since December 2008, the Fed must be on the lookout for threats to financial stability.
‘Quite High’

“I would highlight that equity-market valuations at this point generally are quite high,” Yellen said in response to a question. “Now, they’re not so high when you compare the returns on equities to the returns on safe assets like bonds, which are also very low, but there are potential dangers there.”
Using a valuation technique sometimes referred to as the Fed model, U.S. equities remain cheap compared with government bonds. The S&P 500’s earnings yield, or profit as a percentage of price, stands at about 5.5 percent, more than twice the 2.2 percent rate on 10-year Treasuries.
While stocks have been cheaper on this basis at various points during the bull market that began in 2009, they’re still less expensive relative to bonds than any time in the three decades that preceded it, data compiled by Bloomberg show.
On July 15, the Fed said in its semi-annual Monetary Policy Report that valuations of social media and biotechnology shares might be “stretched.” After a temporary pullback, both have rallied as the Nasdaq Composite Index advanced 11 percent.

Interesting comments form Yellen

[winner69]

BaaBaa, probably rain and wind where you are today so have a read of this. Might need a coffee

http://affluentinvestor.com/2015/05/...rket-meltdown/

[Baa_Baa]

Morning winner. Rain, wind .. you mean living in NZ then.

Thanks for the thought re that article, I tend to go straight to the end first and this one was an easy read "I'm afraid that we're going to have to keep doing the hard work of financial and economic analysis to make investment decisions, instead of relying on blood moons. Sorry it didn't work. It was a cool idea."

Personally I'm more interested that we've explored some of the macro views and have largely avoided the wackos and conspiracy theorists - too much doom and gloom will do your head in. If someone spots a trigger going off though - feel free to share!

As comments are shifting to immunities and treatments, there are many good thoughts being shared here, I hope it's helping people as it's helping me broaden my views on investing ahead of potentially troubled times. I'm particularly interested in some of the observations that aren't entirely defensive, like the Puts and shorts.

BaaBaa, probably rain and wind where you are today so have a read of this. Might need a coffee

http://affluentinvestor.com/2015/05/...rket-meltdown/

[winner69]

BaaBaa - my modus operandi is outlined on the Investing Strategies and Secular Bear Markets thread. Essentially applies to all types of markets.

Maybe the times of impending total wipe out are different. In 2008 I was essentially cashed up (was a slow decline in markets pre crash) I bought some silver and gold because that's what you do in times of crisis. I lust after them every now and again but remind myself that in NZD terms they are only worth what I paid for them. Some mates say should have sod them at the top but that would have been trading and forgetting the reason for buying in the first place.

Other friendly advisors said I should get into hedge funds, esp absolute return ones, as protection in dire times. Never really understood the ins and outs of the secret society so didn't go down that path. Don't think I have missed out.

If the world ever falls apart suppose one has to make do with ones lot on life. Just be debt free and have a roof over your head and lead the good life with what's left. What would I do with my silver and gold anyway.

[Aaron]

Funny Janet Yellen saying that US shares might be over valued and a threat to financial stability. It seems moronic as she is suppressing one of the major inputs to share valuation, "interest rates".
I only hope she is just softening up financial markets for a rates rise otherwise she sounds like a bit of a plonker.

[RGR367]

Here's another view of a meltdown from Peter Thiel. Sharing it here and on XRO thread http://www.businessinsider.com.au/pe...ls-like-2015-2

[Aaron]

Apparently Martin Hawes was on TV this morning saying the property market could bring down the banks. I had someone who doesn't usually take an interest in things financial ask about how to buy physical gold. If this current financial system is a confidence game then that to me is the first sign of confidence reducing.
By the way how do you buy physical gold in NZ? I guess I need to search the site as this is the most likely place to find info on that sort of thing.