I agree that the next 12 months will be an education in itself. I wasn't old enough to remember the 91-92 recession so this will be my first. Things don't look good.
But, I'm curious, why would you not recommend investing in stocks/bonds/funds, even if the economy was going down? I mean, where else would you put your money besides 3% savings accounts? Sure, if your investments return 5% and inflation is 7% you are technically losing money, but it's better than the full -7% you would earn if you stayed out of the market.
Maybe I have to read the book, but I'm curious what you have to say.
Don't get me wrong, for a sophisticated investor this is an excellent time to make money in the market. The thing is, I believe that many 'sophisticated investors' who come along for the ride in a bull market are unprepared for bear markets.
In bear markets the bias is down, up, and sideways at times - but mostly down. Most investors do not participate on the downside and so are biased against the trend.
There are exceptions though and there are more options available to individual investors than ever before. One simple way to play both sides of the market is synthetic ETF index funds such as those available through ProShares and others. (no formal affiliation, but I do have ProShares funds in my portfolio)
With that disclaimer, here's a link: http://www.proshares.com/funds
These funds let you participate in either the short or long side of specific market indices, market sectors, or geographic regions. In some cases they even offer 2:1 leverage allowing you to say, gain 2% for every 1% drop in the DOW. This sort of investment timing generally is not recommended for an average investor. It is very risky stuff.
For the average investor, my advice is to buy gold (gld,xau), silver (slv,slw), and other scarce commodities. Over the past 5 years alone, the US dollar has already lost 65% of it's purchasing power as measured in gold (http://www.kitco.com/LFgif/au1825nyb.gif)
commodity index, alternative energy index. stick to indexes, just not mutual fund or stock indexes.
commodities go up when the stock market goes down and vice-versa. if the recession gets worse, commodities will soar. wait until stock prices are bottoming out (timing is luck) and then switcharoo, get out of commodities and into stocks. this is what the smart money did in the 70's and 80's and this time around it is our turn.
But, I'm curious, why would you not recommend investing in stocks/bonds/funds, even if the economy was going down? I mean, where else would you put your money besides 3% savings accounts? Sure, if your investments return 5% and inflation is 7% you are technically losing money, but it's better than the full -7% you would earn if you stayed out of the market.
Maybe I have to read the book, but I'm curious what you have to say.