Mercy! Mercy! That Dang Nabed PERCY!

Percy on Managing Money (What a Joke)

Percy Goodfellow on Managing your Money

I was amazed to see during the recent panic money being invested in “Treasuries.” If must be coming from foreigners. With all that is going on with our politicians and financial woes, parking money in Treasuries made me scratch my head. Actually there are not a whole lot of options right now but Treasuries?

We have a simple investment strategy for our meager portfolio. One half is in conservative mutual funds and the other half is in precious metals. When the stock marked goes down the metals go up. When the metals go down the stock market goes up. That’s the idea anyway. I had to do something with those rotten CD rates. This seems to be working after a fashion but it will probably go sour like some of our other financial efforts in the past. Then again there have been some successes. Still we have this philosophy that if we are not plagued by a continuous stream of minor setbacks then the tsunami is about to come crashing down about our heads. Linda and I are resourceful and always seem to come up with a way to cope… with a “little” help from the “Big Guy”.


Certificates of Deposit. (Savings Accounts/CD’s) This option is dead on arrival even though I see some banks trying to revive these ailing instruments.

Stock Market: In a panic downturn there are many stocks that fall below their value. Most little guys probably should not be speculating and the wiser choice is a conservative mutual fund run by a reputable financial house. Even though the return might not be great people have to eat and provided themselves with the necessities in life. Investments based upon real value are probably not a bad idea despite the fact they might fluctuate up and down around the locus of their actual value.

Precious Metals (Gold/Silver): I would not speculate in coins as I see many of the advertisements on TV trying to advocate. Invest in production capability or the actual bullion. If you don’t know anything about coins don’t speculate on them. Depending on the coin, the precious metal content is far below what the asking price is.

Treasury Notes: The way money is being printed these days I hesitate to recommend heading too far down that road. Maybe a little ways but not too far. Certainly not more than ten percent of your net worth. It does give an investor liquidity but the returns are not great and we have yet to feel the full effect of the run-away, and hidden long term effects of printing huge amounts of paper. We know the more that is printed the more our currency is being devalued. What seems to be propping the Dollar up is foreign money. Bad as we see the way the dollar is being managed it is even worse in other countries and the smart money overseas sees the United States as a long term player in the world financial game. In parts of the world where the Socialist mentality has been entrenched longer there has been more opportunity for these failed political ideologies to eat away at the financial health of the governing institutions and their markets.

Bonds: Offer a guaranteed rate of return and are attractive to many. Institutions that sell bonds to raise capital (Corporations, Municipalities, schools, etc) know that if they default they will never sell another one and to safeguard this potential revenue source they will fight to maintain their fiscal reputation to the bitter end. It is a source of capital they prize and depend heavily upon. If they have a tax wire or a means of raising public monies, such loans are seen by financial institutions as reasonably secure. If there is a general collapse they will be among the first to default as the numbers of taxpaying citizens diminishes. (A significant percentage of citizens under the present tax code already pay little in property or income taxes.) Eventually there will be no more blood in the proverbial turnip.

Stuff your Paper in the Mattress: If there is a crash this might not be such a bad option. The government will endure and make some effort to sustain its currency despite the inevitable inflation that will follow. Having some money buried in the back yard is better than having no money at all. Keep in mind if the banks fail the government is going to have to buy some even larger and higher capacity printing presses. They will need to back the insured savings that will still be out there, albeit ,in diminished amounts and seriously devalued. Still having a little cash is better than having no cash at all.

So what does the little guy do. I am probably the last person to give advice but the options look to me to be. Invest in conservative stocks that produce things that are required to sustain life and health. That is where you need to place half your current value. For what’s left consider precious metals… not coins but production and bullion. I am seeing that when the stocks go down the precious metals go up and vice versa. It isn’t a great strategy but one that might be viable in the troubled times that lie ahead.

This means you have to look at your mutual fund portfolio and see how these management clowns are actually investing your 401-K money. Get involved in investment clubs or organizations and get some informed help that will show if your money is intelligently positioned in commodities that have an enduring value even in the worst of economic times. Consider the reputations of the Financial Houses you elect to deal with. Some are a heck of a lot more trust-worthy than others. Even if you have to sacrifice a little on the return, such investments can keep you treading water and provide a modicum of security in the future.