About 20 years ago I discovered that my maintenance foreman was going to retire in a year. \u00a0He had a fixed pension and social security, but he also had about $500,000 in a 401(k) or IRA. \u00a0While talking to him I found out he was 100% invested in company stock. \u00a0I told him he needed to sell since he could not afford the risk. \u00a0He kept saying, “James, I don’t want to miss out. \u00a0This stock is doing a lot better than the markets.”. \u00a0Finally I hit on something. \u00a0I told him to sell half. \u00a0If something bad happened, he wouldn’t be wiped out, and if the stock continued to be a high flyer, he wouldn’t kick himself for selling out. \u00a0He did it, and sure enough a few months before retirement the stock crashed. \u00a0He still got to buy his dream retirement home and I think he would have named his first grandbaby after me. \u00a0He was very thankful.<\/p>\n

I’ve been looking at the economy and I’m not liking what I’m seeing. \u00a0First the Fed has been tightening. \u00a0Don’t fight the Fed, I really don’t need to write anything else. \u00a0Sure enough, quarterly GDP just printed 0.7% growth, which is anemic. \u00a0Car sales have rolled over and farm land prices are down. \u00a0People hopeful that oil would hit $60 are now praying it holds $50,\u00a0 and the yield curve is flattening. \u00a0The economy is looking recessionary.<\/p>\n

I don’t give investment advise, but I’ll tell you what I would do. \u00a0Sell half. \u00a0I’ve given that advise in the past, and been wrong. \u00a0But guess what? \u00a0The remaining half participated in the stock market mania and still made you money while the other half suffered no loss. \u00a0If I was up at night worrying about my investments, I’d sell half. \u00a0Move it to safe money.<\/p>\n

In a 401(k) or IRA, that would be FDIC insured money markets. \u00a0If you want a little more return, then use short term Federal government bond funds; and make sure that excludes FNMA and any other housing entity. \u00a0For the half you leave invested in stocks, I’d move some of that to Fed long bonds in the hope that bond prices are heading higher (lower interest on the long end).<\/p>\n

For money outside of retirement, I’d use Treasury Direct and be looking at 26 week T Bills. \u00a0No commission and safer than a bank. \u00a0The interest rate is around 1% right now, which is better than a CD.<\/p>\n

Now if you want to speculate, as in, you can lose every penny, then start dusting off Elliot Wave theory. \u00a0I was short during the 2008 and 2009 blood bath and made a pile. \u00a0I have to tell you that Elliot Wave tracked excellently and I was actively trading triple short ETFs. \u00a0It worked great. \u00a0And that is how you would speculate. \u00a0Once you recognize the Wave 1 sell off, you do the counts and use short ETFs. \u00a0I actually covered my shorts at around S&P 750.<\/p>\n

Elliot Wave appears to suck during a bull market. \u00a0I speculate that Wave Theory captures emotional investing, which means a Bear Market. \u00a0It kind of works for Bull Markets, but it’s not good enough to trade with. \u00a0I believe this is because the Bull Markets are driven by the 13 members of the Distributist Federal Reserve Banking Soviet so emotions are not as important. \u00a0 You might be following a perfect A-B-C correction only to have it short circuit on B and miss out on a rally initiated by Fed action. \u00a0Note you have to watch out for Fed Acton during the Bear Market also, but you usually have time to trade the Bear. \u00a0In a Bull Market you are better off buying a low cost broad market index fund\/ETF like the Vanguard S&P fund.<\/p>\n

So at a minimum, at this time I’d sell half and move it to safety.<\/p>\n","protected":false},"excerpt":{"rendered":"

About 20 years ago I discovered that my maintenance foreman was going to retire in a year. \u00a0He had a fixed pension and social security, but he also had about $500,000 in a 401(k) or IRA. \u00a0While talking to him I found out he was 100% invested in company stock. \u00a0I told him he needed…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"libsyn-item-id":0,"libsyn-show-id":0,"libsyn-post-error":"","libsyn-post-error_post-type":"","libsyn-post-error_post-permissions":"","libsyn-post-error_api":"","playlist-podcast-url":"","libsyn-episode-thumbnail":"","libsyn-episode-widescreen_image":"","libsyn-episode-blog_image":"","libsyn-episode-background_image":"","libsyn-post-episode-category-selection":"","libsyn-post-episode-player_use_thumbnail":"none","libsyn-post-episode-player_use_theme":"mini","libsyn-post-episode-player_height":"50","libsyn-post-episode-player_width":"200","libsyn-post-episode-player_placement":"top","libsyn-post-episode-player_use_download_link":"","libsyn-post-episode-player_use_download_link_text":"","libsyn-post-episode-player_custom_color":"","libsyn-post-episode-itunes-explicit":"","libsyn-post-episode":"","libsyn-post-episode-update-id3":"","libsyn-post-episode-release-date":"","libsyn-post-episode-simple-download":"","libsyn-release-date":"","libsyn-post-update-release-date":"","libsyn-is_draft":"","libsyn-new-media-media":"","libsyn-post-episode-subtitle":"","libsyn-new-media-image":"","libsyn-post-episode-keywords":"","libsyn-post-itunes":"","libsyn-post-episode-itunes-episode-number":"","libsyn-post-episode-itunes-season-number":"","libsyn-post-episode-itunes-episode-type":"","libsyn-post-episode-itunes-episode-title":"","libsyn-post-episode-itunes-episode-author":"","libsyn-destination-releases":"","libsyn-post-episode-advanced-destination-form-data":"[]","libsyn-post-episode-advanced-destination-form-data-enabled":"","libsyn-post-episode-advanced-destination-form-data-input-enabled":false,"libsyn-post-episode-premium_state":"","libsyn-episode-shortcode":"","libsyn-episode-embedurl":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/posts\/113"}],"collection":[{"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/comments?post=113"}],"version-history":[{"count":3,"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/posts\/113\/revisions"}],"predecessor-version":[{"id":116,"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/posts\/113\/revisions\/116"}],"wp:attachment":[{"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/media?parent=113"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/categories?post=113"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jamesdeprisco.com\/wp-json\/wp\/v2\/tags?post=113"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}