Personal Finance on Sidechat | I just moved 75% of my savings out of an HYSA into precious metal and high yield bond ETFs. Already have a fully funded emergency fund in another HYSA, so hopefully this hedges inflation well on a 5-10 year time horizon.

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Personal Finance 4w

I just moved 75% of my savings out of an HYSA into precious metal and high yield bond ETFs. Already have a fully funded emergency fund in another HYSA, so hopefully this hedges inflation well on a 5-10 year time horizon.

Anonymous 3w

Unsure of long term strategy, but for the next 4 years the game is on. America is planning to print the debt away! Gold is a fantastic hedge against this.

Anonymous 3w

(#1) A lot going on that supports the underlying market conditions and I won’t bore you with a 7 hour economics lecture, but basically, for the past few years we’ve been tightening. Higher interest rates mean, less people lend money for stupid ideas, raising interest rates slows biz growth, because it’s the bottom line. However; when the system has too much money in it, everybody wants to buy shit, and prices go wayyy up (inflation) because when your rich nobody complains about the $14 alvocado

Anonymous 3w

(#4) Prices on everything go up exponentially. Nobody is looking for bonds and fixed earning assets because interest rates are low, and inflation is high. Stocks, will do well, because they will suck up some of the liquidity (extra money) in the system, but they’re risky and based on company performance. (A rising tide raises all ships). Gold & precious metals will do well because it’s directly related to inflation and people wanting to protect their money from risks.

Anonymous

#1 3w

as someone who is currently very stressed about their investment accounts, can you explain what you said?

Anonymous

#1 3w

(#2) Toast. However, we’ve done the opposite. Pandemic injected too much money into the common people’s hands and now we have $10 deli cheese. So we tightened, and it’s killed business growth. Add to that tariffs and we’re sucking money out of the economy like it’s nobody’s business. Things are economically rough for a lot of companies right now. Why they’re laying off employees by the thousands and new grads can’t get jobs. However, the money printer started in December.

Anonymous

#1 3w

(#3) The fed as basically two levers to control the economy. Money printing, and interest rates. We just swapped into money printing again in December, and interest rates have been slowly falling over the past year. Trump wants them LOW, because it means we have less interest to pay on the national debt. He also wants money printing high, because it means more money flowing means more taxes & tariff profits. However as we showed before what happens when too many people have too much money?

Anonymous

#1 3w

(#1) I agree with your whole assessment of the situation and it's why I made the decision I did. Also, a rapid increase in m2 usually causes a significant melt up followed by a brutal correction, before inflation catches up and reduces the liquidity and market volume supporting the melt up. My retirement portfolio and taxable accounts have no bonds. They are terrible for long term investments, but because I want to insulate myself from any significant drawdown before I need to access the money

Anonymous

OP 3w

(#2) That I may not make up over the given time horizon before I withdraw. This is entirely meant to be a safe store of value to battle inflation that I will pull out of the market to pay for things like a home or wedding. Therefore the goal is to keep beta as low as possible and only shoot for an alpha of ~1-2% over CPI.

Anonymous

#2 3w

Gold traditionally underperforms the market, but retains it's value better in a significant market correction, and may even peak during a correction. Not a long term hold to generate real alpha, but a low beta asset class.

Anonymous

#2 3w

If your worried about a correction just pull out of anything that's heavily weighted in mag 7. Explore commidity/small cap/energy/utility ETFs etc or holdings like Berkshire. I rebalanced my investment portfolios to get as minimal mag 7 exposure as possible. The drawdown risk will make a bigger impact on my long term growth. Basically my move here is to agressively rebalance when the correction happens but still have capital to do so.