Wisdom from The Action Wisdom In Action

This Just In: Save Like the Rich and Famous

From MSN Money.

"In a down economy, how are the wealthy protecting their money? Let the same advice they are receiving guide you through these hazardous financial times."

They didn't buy gold--instead, they're going to cash and cash equivalents (bank CDs, laddered bonds, etc.). There's really no other place to go with your money--gold is too high, stocks and bonds are either too high or too low, depending on your objective, commodities are going sideways, and bonds will suffer from future inflation (all except for TIPS, which won't pay very much), so it's either cash/cash equivalents, or antiques/art/wines/houses/other stuff that will appreciate with time.

Another option is to invest for dividends--when the price of a stock is low, the dividend is usually high, so you get paid to hold. As the stock price appreciates, the dividend lowers, and you make money on the price appreciation rather than the dividend. In this case, now would be the time to load up on cheap, high-quality, high-dividend stocks (for the long-term investment).

Posted by Cute at 8:10 PM

Labels: economy, financial (non-tax)