Comments on: Jonathan Clements’ Recession Advice: Cash is King

By: Joe

Joe — Fri, 04 Jan 2008 15:17:16 +0000

To “Swim Upstream to Wealth” … WOW … putting money into the market IS gambling … pure & simple … you must be a broker .

By: Sandra Booth

Sandra Booth — Tue, 27 Nov 2007 11:09:29 +0000

We are fearless about holding assets already in the market, but where should one put new retirement account deposits in light of the continuing recession talk.

We are self employed, plan to retire in 10 years, and expect to deposit about $25,000 to a SEP-IRA for 2007. We came late to significant retirement saving and a misstep would have a bit impact at the stage. Do we:

1) continue with usual deposits to a balanced portfolio of stocks and bonds through a mutual fund company?

2) Park the 2007 deposit in a IRA/cd temporarily and later transfer to the usual stock/bond portfolio assuming recession arrives with lower share prices?

By: Swim Upstream to Wealth

Swim Upstream to Wealth — Thu, 27 Sep 2007 13:59:40 +0000

I think it is important for folks not to sell assets or positions in their portfolio and move to cash in anticipation of a recession. You need to build an all weather portfolio. No one can predict what will happen in the future. If you move to cash, and we don’t enter a recession, you will hinder your portfolio returns. I tend to agree that recession is on the horizon, but changing your portfolio based on a chance is gambling, not investing.

I certainly agree with Clements’ ideas, but I fear folks will read his article and assume they need to sell their equity positions. Actions like this are the reason most folks fail to match their benchmark.