Deflation: Who Would Have Thought?

by FI Fighter on July 22, 2015

in Real Estate Thoughts, Stock Investing Thoughts, Thoughts

freedom - 1

The more I invest, the more I realize that I do not know much about ANYTHING. For the longest time, my mind was fixated on the thought of early FI, so I did what many on the journey are taught to do…

I kept on investing… rain or shine.

They say you can’t time the market, but it also doesn’t take a genius to figure out if we are closer to a top or the bottom of a cycle. In the current state of affairs, our own bull market has now reached Year 7 and I’m guessing I’m NOT the only one who feels like this massive run is getting a little long in the tooth…

Ultimately, I don’t believe there is a single universal “right” or “wrong” answer as it pertains to investing. In other words, you just have to keep on doing what is best for your own unique situation.

With that said, it’s no secret to readers of this blog that I’ve had a change of heart as of late — I’ve liquidated out of most of my stock positions and I’m sitting mostly on cash these days…

Deflation… Say What?

Ask most investors what they worry most about, and a majority will answer with “inflation”, or something of the sort. Naturally, we all worry about inflation whether it’s when we go out grocery shopping, or when we are filling up the tank at the gas station.

When you look around you, it seems like inflation is just about everywhere! Real estate is up. Stocks are still soaring. The bond markets are at an all-time high. The amount of derivatives the big banks are playing with is a staggering 1 quadrillion dollars… Yes, that’s $1,000 trillion… an unfathomable amount that I’m not sure anyone is capable of really processing.

So, it’s all about: Inflation, Inflation, Inflation…

Since the very beginning of my own early FI journey, I’ve aggressively tried to hedge against inflation with both stocks and real estate.

Check!

But what about deflation?

Hmm, I never thought about deflation… Just what in the world is that?

History shows that Americans haven’t experienced true prolonged “deflation” since the Great Depression… So why should I care now?

Deflation, as it turns out, is the biggest thing on my mind these days. When you look at the following chart, it’s clear that the current velocity of money is at an historic low (you can find money velocity charts anywhere but I like the following because it also plots the Nasdaq):

From Thorsten Consulting:

moneyvelocityvsnasdaq

M2 includes M1 (cash and checking deposits) along with “near money” (savings accounts, money market funds, CDs, time deposits, etc.).

According to the Federal Reserve Bank of St. Louis:

The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. The frequency of currency exchange can be used to determine the velocity of a given component of the money supply, providing some insight into whether consumers and businesses are saving or spending their money.

The classical Equation of Exchange most commonly expressed:

MV = Py

Where M = Money Supply; V = Velocity; P = Price Level; y = Real GDP

Where the product Py = Nominal GDP

In other words:

MV = Nominal GDP

So, you can print all the money that you want… but if no one is spending it, you aren’t “stimulating” the economy. It might as well be buried in the ground… or just sitting in the digital accounts of the big banks (which is where most of it probably lies)…

They say that money velocity is the “joker of the deck” because it’s something that no one can control; velocity is more behavioral, so if the consumer doesn’t have confidence in the system (economy), they aren’t going to be spending their hard earned dollars…

Although the government has gone through great lengths to prop up the markets over these last 7 years (real estate, stocks, bonds, etc.), those gains are all “paper wealth”, and it doesn’t look like anyone is really convinced that they are any “wealthier”… This time around, no one is taking the bait and “making it rain” everyday and night at the clubs, restaurants, gadget stores, etc..

I know I sure don’t feel like I’m “rich”! And I’m guessing the great majority of the public doesn’t either because the reality of the situation is that stocks, real estate, bonds, etc. are investments that the bulk of the middle class doesn’t have access to. Most folks are living paycheck to paycheck and just barely scraping by… In Silicon Valley, I see some displays of ostentatious “wealth”, but even then, most of the $200,000/year income folks I know are even more frugal than me…

My own vibe is that a decent amount of everyday folks have indeed become much bigger savers than spenders… And that’s no way to grow GDP, or to stimulate one’s economy.

As An Investor…

As an investor, I’m in the interest of making money (obviously). But to do so, I’ve realized that I have to pay more attention to the news and what’s going on in the world.

And as I started to probe deeper, I’ve come to the conclusion that it’s deflation that is actually my biggest concern right now, not inflation.

For an investor to have strong confidence in the marketplace, one must have conviction that the economy is robust and healthy… For all the Quantitate Easing (QE) programs that have been launched, and after 7 years of Zero Interest-Rate Policy (ZIRP), is there really a legitimate recovery?

Why then, have wages been stagnant, if not dropping throughout the course of this recovery?

real-median-income

The topic of unemployment is a sensitive one; the government officially says ~5.5%, whereas many pundits feel like it’s substantially higher.

I have no clue, but if you look around, it’s easy to find charts that suggest the following:

194214_5_

Let’s shift gears to industrials, which typically provide a good insight into trending economic conditions.

From Zero Hedge:

CAT LT sales

That can’t be good…

Further, when President Obama took office in 2009, the national debt was about $10 trillion. Today, that debt now sits at about $18 trillion. Is that sustainable? Or are we on the precipice of disaster?

The debt problem isn’t exclusive to the U.S., of course, but it’s a serious problem that all countries are battling with. Just look at Greece.

Japan has a debt-to-GDP of over 200%. And we all know about Japan and their lost decades of stagflation that they have been battling… Could the same thing happen here as well?

I’m no economist, politician, or even remotely that bright, but all the above has forced me to look at things from a different angle.

A deflationary one.

King Dollar

But money velocity, stagnant wages, faulty recoveries, deficit spending, etc. alone aren’t enough reasons to cause me to defect to the deflationary camp; it’s just steering me away from thinking about inflation all the time.

The U.S. Dollar Index (DXY), however, is currently very robust and doing extremely well and rising:

As of July 22, 2015:

Screen Shot 2015-07-22 at 2.49.05 PM

With all the problems in Europe and China, the de facto safe haven for most investors is the U.S. Dollar. The euro has been weak. Ditto for the yen and most other foreign currencies.

The same applies to commodities as well — gold, silver, platinum, copper are breaching 4 year bear market lows relative to the dollar… WTI crude is down below $50/barrel again…

We are witnessing an epic deflationary chapter unfolding right before our eyes here!!!

A few months ago, I’m guessing that most investors never would have thought they would have another chance of snatching up blue-chips like Exxon Mobil (XOM) for under $82/share, or Chevron (CVX) for under $94/share

Not to mention, the very likely possibility that you will be able to soon purchase physical gold bullion for under $1,000/oz… Or, gold mining stocks like Barrick Gold (ABX) that are now trading at 24 year lows!

All hail the world’s reserve currency. King Dollar is the place to be right now!

Being Prepared

Although I’m sitting on a lot of cash right now, I’ll admit that it’s not my preferred place to be long-term. Back in May, I began aggressively selling out of my stock positions because I had a certain unease about the market. To date, those fears have not abated, and if anything, I’m even more reluctant to get back into investing now than I was then…

As always, I think it’s important for investors to proceed with caution when it comes to investing. Recently, I surpassed my childhood goal of becoming a net worth millionaire. Obviously, this is an accomplishment that I would like to preserve… Unlike in 2008, this time around, I will have a lot more to lose if a market crash happens!

As it pertains to deflation, I do feel that if there is another collapse (yes, I’ve got to play devil’s advocate from time to time… I can’t always be a permabull) that we will first witness a massive deflationary environment with all the debt deleveraging that will take place. At least until the government can intervene and inject some “medicine” to save the markets.

In other words, perhaps another “opportunity of a lifetime” for investors to snatch up more high quality assets will present itself!

Future Moves

Markets are dynamic and things change. Quickly.

All along, I’ve been fixated on inflation and all the assets that I’ve acquired to date have been strong inflationary hedges. When it comes to that other side of the coin, I’ve mostly remained ignorant and ignored deflation.

Completely.

Until now.

With gold and oil crashing, you can be certain that I’m paying close attention to the commodities markets. Although this mantra is often overstated, I will ALWAYS believe it to be true:

Buy low and sell high.

I believe in market cycles. I got into real estate at a very opportune time and made a fortune. I’ve watched my retirement portfolio increase by 200% since the stock market bottomed out in 2009 (like most investors have).

It was all luck.

Right place at the right time.

So, I’ve cashed out of stocks… I’m not that greedy and don’t mind taking profits off the table. If real estate weren’t so illiquid, perhaps I would do the same as well… Cash flowing real estate isn’t immune to a market downturn, but it’s perhaps the best place you can be as a real estate investor.

From my experience, it’s all waves and cycles. That’s all investing is!

Right now, there’s a lot of pain in commodities… But I’m going to try and remain patient as long as I can… My intentions are to snatch up some bargains when there is full capitulation and blood in the streets.

You can make money in an upmarket but you can make a ton more in a downmarket!

It’s my preferred method of investing…

Yes, I’m sitting on a lot of cash now… But that’s only a temporary position. Right now, I’ve got my eyes and ears alerted to deflation.

In the meanwhile, I hope that inflation is somewhat tame as it relates to groceries. I’ve got to stopby the market later today and pickup some popcorn.

Things are about to get REAL INTERESTING over the next few months! 😉

 

Happy Investing!

{ 20 comments… read them below or add one }

1 Midwestern LandlordNo Gravatar July 22, 2015 at 5:57 pm

If we have learned anything over the last 15 years, markets tend to go up and down in vicious cycles. Greed then fear. Greed then fear. Obviously impossible to perfectly time, however I agree with you that it does not take a rocket scientist to see at what end of the spectrum we are currently at. I tend to avoid the stock market all-together because I believe in solid, income producing real estate much more. I am not looking for appreciation in real estate, I am looking for cash flow. So if values go down, it is not an issue for me. If rents go down, it hurts a little, but at the end of the day people need a place to live. It’s not as if I am trying to sell ice to an eskimo. Combine that with low interest 30 year fixed rates (which I have in place) and I believe that to be a winning formula.

Couple more thoughts on your article:
“If real estate weren’t so illiquid, perhaps I would do the same as well… Cash flowing real estate isn’t immune to a market downturn, but it’s perhaps the best place you can be as a real estate investor.”

I understand the premise, however, I would not underestimate the power of holding class A properties with low rate 30 year fixed rate financing (which you have some of). I would never sell these assets given the financing structure.

Low Current Velocity of Money – My main thought on that is you are correct, a majority of people are paycheck to paycheck. They are just trying to get by. The way the system is today, a small percentage of the population holds a large portion of the wealth. Kind of hard to get high velocity of money in that environment.

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2 FI FighterNo Gravatar July 23, 2015 at 12:14 pm

Midwestern Landlord,

Thanks for stopping by and sharing your thoughts!

When it comes to cash flowing real estate, we are on the same page and there might not be an investment I love more than cash flowing real estate. With that said, real estate has and always will be a local phenomenon. If I lived out in the Midwest, I would probably be just like you and less sensitive to price declines as the premise out there is to indeed invest for cash flow. Out in the Bay Area, it’s a totally different story and an investor out here ALWAYS has to be cognizant of price… I know folks who are still trying to pile on the momentum train right now and when I look at their “cash flow” numbers, it’s ONLY made possible by sinking $150,000+ into the downpayment… When a “typical” home with a conventional 30 year fixed mortgage at 20% downpayment shows me cash flow numbers of -$500+/month, I know it’s time to stop investing!

Of course, everyone has their own investment rational and thinking, but to me, it would be a very tough pill to swallow to pour that much capital into an “investment” just to make the numbers work out…

I definitely agree that the financing structure of 30 year fixed, low interest rate is something to hold long-term, especially with the right properties… Most likely, I won’t be selling any of my Class A assets… However, I won’t deny that the run-up in appreciation has tempted me to take some profits off the table. Since I own a few on my own and some side hustles, selling 1 “golden goose” wouldn’t be an impossible scenario, even if this rally were to keep on trending upwards.

All the best!

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3 Midwestern LandlordNo Gravatar July 23, 2015 at 12:34 pm

Good points. The different markets that we are in is definitely a consideration. The side hustle deals sound like obvious sells at some point due to more than 1 owner. The properties you own individually in the Bay area I probably would hold onto long term. Either way, you are doing well for yourself my friend.

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4 FI FighterNo Gravatar July 23, 2015 at 12:42 pm

As always, we are on the same wavelength there — Yup, the side hustles would make prime candidates for a sale to lock in appreciation gains.

Unfortunately, those properties are also located in the best locations of all my properties… They really do make for tremendous long-term rentals, especially since we are cash flow positive and priced below market rate (just one short year later). Good problem to have!

Thanks for the support!

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5 Alexander @ CashFlowDiariesNo Gravatar July 23, 2015 at 1:18 pm

I dont blame you one bit Jay for doing what you are doing. It actually makes sense after reading this article. It really is just a matter of time before it comes crashing down again but how hard will it fall is what bothers me.

As MidWestern indicated as well, I have a few class A properties here in Austin as well as some good class C properties in the Mid West and luckily, because I bought them all cheap I am not concerned so much with what happens with the appreciation. It really is that cash flow that I will concentrate on and as long as I can lower rents a few hundred dollars and still break even at worse, I would consider that a huge win and just ride that out.

We’ll see what happens like you say. Should be very interesting but I like the way you think on this and it sounds like when the time comes, you will be aggressive in picking up some bargains. Smart!

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6 FI FighterNo Gravatar July 23, 2015 at 3:37 pm

Alex,

Thanks for stopping by. Similar to you guys, I have the same plan as it pertains to my properties in the Midwest — Keep holding, and reduce rents if necessary should things get rough. With these type of cash flow properties, it’s important to buy with ample margin in place, which is exactly what you’ve done.

With my local properties, a market collapse would wipe away hundreds of thousands of dollars in paper gains. That’ll be brutal, regardless if the property still cash flows on a monthly basis.

To protect my overall portfolio, I’ve decided to take a hedged position. That way, if the market keeps soaring, my real estate holdings continue to do well. However, on the flipside of a market crash, I need to be ready to pick up high quality investments for pennies on the dollar to make up for any hits I take along the way.

Yup, things should get interesting. I’m just going to try and get best prepared as I possibly can.

All the best!

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7 Alexander @ CashFlowDiariesNo Gravatar July 24, 2015 at 3:26 pm

Just keep us informed when you start buying stocks for pennies on the dollar because I want to jump on that train with you 😉

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8 FI FighterNo Gravatar July 25, 2015 at 7:41 am

Alex,

I don’t have a crystal ball but I’ll be sure to update any purchases on this blog!

Take care!

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9 Retire29No Gravatar July 23, 2015 at 1:34 pm

I have a really hard time believing deflation is in the cards with such an accommodating Fed. If Yellen defers in September, the dollar will probably lose 1% overnight. Defers in December? Maybe lose another .5%. I know we’re seeing some high-profile deflation (commodities, energy) and very low wage inflation, but the dollar can’t strengthen forever, can it?

Eric

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10 FI FighterNo Gravatar July 23, 2015 at 2:00 pm

Retire29,

No, nothing lasts forever. It’s just waves and cycles and right now the data shows that the dollar is strong and commodities are especially weak.

I’m feeling quite fortunate that I was able to exit out of UNP earlier this week on Monday as the downward descent across transports continued again today.

The Fed wants inflation, of course, and they may well get it down the road… For now, it’s clear that we’ve got deflation, which isn’t a bad thing for us investors. If you’ve got a lot of dry powder, I don’t think anyone is complaining now about all these buying opportunities popping up.

We’ll see what happens in Sept-Dec timeframe. For now, it looks like the worst is yet to come. If you’re a buyer, you’ve gotta love that!

Cheers!

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11 FI FighterNo Gravatar July 23, 2015 at 2:12 pm

When it comes to a rate hike, that’s the million dollar question being asked everyday…

What are the odds the Fed raises rates this year? Even if it’s just a token one… The IMF is already openly telling them, “NO!” There are even those who think the odds of Yellen launching QE 4 are greater than the odds of us seeing a rate hike anytime soon…

I’m just doing my best to be prepared either way… Would love to hear anyone’s thoughts on this! I have no clue what’s going to happen…

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12 The DudeNo Gravatar July 23, 2015 at 2:36 pm

Great post FI. I love your thinking here. Very well done.

I tend to agree with Retire29. I don’t think we’ll see much deflation in the U.S. I think we’ll see some deleveraging internationally, particularly China. Perhaps we’ll see a tad bit domestically, but I think something major would need to happen like energy taking a big hit. I don’t know what effect the Iranian sanctions being lifted will have on energy prices or whether or not this could precipitate another drop in energy prices. What I do know is the world is awash in oil right now and it’s unlikely to change anytime soon. Arguably the more important question is what the lower oil prices say about international economies and ultimately what effect that will have on the U.S. economy. If international economies are slowing down and the U.S. Dollar is strengthening, then exports will also be impacted.

There are a lot of people who make a really big deal about our national debt. I personally am not worried about it as long as we can continue to grow our economy. We are certainly not at risk anytime soon of becoming Greece. Greece is in a very unique situation since they have virtually no control over monetary policy. They are at 25% unemployment and have basically no way to kick start their economy and grow their way out of their debt. This signals another problem with the Euro economy. They are making very questionable decisions that will impact their growth. Bernake wrote a great piece about this recently. A slow Eurozone will impact US growth.

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13 FI FighterNo Gravatar July 23, 2015 at 3:49 pm

The Dude,

Thanks! Glad you enjoyed the article.

Always good to be discussing these type of macro events with you. I’m glad you brought up China as the the world’s 2nd largest economy (or 1st depending on your source) I’ve got to say that what’s going on there has definitely got my attention. With their most recent 30% stock crash (and heavy government intervention), I can’t say I have full confidence that they will be able to keep their economy propped up for much longer. China has got to be the most speculative market out there… I think I read somewhere that 80% of stock investors out there are retail without a high school diploma. Further, the real estate bubble is even more spectacular and it takes somewhere along the lines of 45x annual income to purchase property there… In many instances, 3 generations of Chinese families are needed to buy these speculative investment properties.

China is too big and too much of the world’s economy depends on their continual “7%” annual growth. I’m not so much worried about Greece’s impact on the world economy, as I am China’s. Commodities have already been getting smashed and word is that demand from China for iron, for example, is slowing greatly. BBL stock is one I’m watching and it’s been a painful ride for investors this year, no doubt.

You’re right about the glut of oil and this event will most likely take a few years to play out. It will be interesting to see what happens with Iran, but for now it appears that their impact will be minimal in the grand scheme of things. I’m going to be patient and wait for a bottom to form before I go chasing energy investments.

Good point on the Greece comparison. Not only can we print our own money, but the dollar is the world’s reserve currency as well. And we have the world’s strongest military forces… The dollar won’t just vanish overnight. But agreed, a strong dollar is hard on exports so we’ll see how long this relative strength lasts before we engage in another round of currency wars to devalue the dollar…

In regards to economic growth, that’s what I’m going to pay most attention to. Of course we all want and welcome a real recovery but if the data suggests otherwise, then I want to be prepared for recession, depression, stagflation, deflation, etc…

Those aren’t happy topics, but that’s what the other side of the coin looks like, unfortunately…

Cheers!

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14 The DudeNo Gravatar July 23, 2015 at 5:05 pm

Yeah exactly. China is the big concern for the reasons you mention.

Greece isn’t an immediate concern. Their economy is the size of Connecticut’s and if I recall correctly, it’s like 2% of the EU’s GDP. The two risks I see are: 1) possible contagion, although the risk here is likely low and 2) Greece’s economy continues to get pummeled the until their only viable option is to leave the EU, which would have broader implications, but even this could take a long while to play out and I think it’s in everyone’s interest to make sure this doesn’t happen.

So if this is the case, then we’ll likely just see a domestic slowdown as the global economy slows down a bit.

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15 No Nonsense LandlordNo Gravatar July 23, 2015 at 4:09 pm

Once the baby boomers retire, you will start to see average wages get pummeled. The baby boomers did not grow up with the entitlements that there are today. Many served in the military. Many have had, or still have, solid jobs.

The next generation grew up with more entitlements. Having more kids than they could afford. Skipping high school and college to live a minimal life on welfare.

And forget the rest of the generations…

Of course it’s not everyone that does not achieve what the baby boomers have, but a larger percentage of the newer generations have not achieved what the greatest generation to ever have lived in the USA has.

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16 FI FighterNo Gravatar July 23, 2015 at 4:16 pm

Eric,

Great point on bringing up the baby boomer generation. The clock has struck midnight and that generation is just starting to or on the cusp of checking out of the workforce.

They were promised social security, medicare, and other things that may or may not be there in the near future. We are already in deficit spending trying to support those programs so I’m pretty certain my generation won’t have access to them at all when our time comes to retire.

Demographics, like we’ve seen in Japan,are a good indicator of what we can expect to see in the future. And the outlook here isn’t good. Peak spending occurred in the 90’s and with the largest generation of Americans retiring, who will fill the void and spend spend spend to stimulate the economy?

Demographics point to an even more deflationary future…

But you’ll be retired soon, financially independent, and out enjoying the sun 🙂

And yes, you’re probably right about my generation feeling more “entitled” to free gifts that we did not earn… But there are spoiled people across all generations…

Cheers!

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17 george puckNo Gravatar July 24, 2015 at 8:53 pm

I think we have to be careful about proclaiming a deflationary environment.

Many of the commodities being based in US dollars are being forced down in price because the dollar getting stronger. I dont know that we are seeing deflation if you measure it in say Can$, or Euros.

Plus as others have mentioned I think the fed just dumps money into the economy if we actually see inflation.

One thing of note, there was deflation in Weimar Republic right before hyperinflation hit.

I am not suggesting we will see the return of hyperinflation, but I am saying that deflation doesnt necessarily continue.

I expect that sooner or later we will see a devaluing of the dollar, I think some of the strength in the dollar has been due to a lot of the odd things going on in other parts of the world. Ie a flight to safety from countries like Russia, China, the middle east and Europe who are trying to shelter their assets during some uncertainty in the different places in the world.

I suspect that we will see that reverse. Either our economy will slow of the fed will print money or both.

The CEO of Core Labs is suggesting Us crude production peaked in April, and that guys like Boon Pickens, Harold Haim and Rich Kinder all have said that the price of oil is in equilibrium closer to $70 than $40.

I could see a pullback in the US stock markets, I have sold some stocks that made large runs and increased my cash. I think we might get a 10-20% pull back. But i dont see a full fledged panic. And I am looking right now for potential stocks that have already corrected. It looks to me as though pipeline MLP’s have oversold. ( I added to my position in KMI today, pipeline even though its not technically an MLP) If I had some taxable accounts available I would look at ETP or perhaps Williams as well.

I wouldnt get into too much of a defensive mode in terms of selling everything. If anything I would look at my assets that have moved up the most, and think about selling a few. Having read most of your posts, holy cow I would look to sell a couple of the side hustles, and might consider selling some of your out of state properties whose cash flows are volatile and whose property values have gone up.

I suspect if you really looked at your portfolio, you could sell some assets and pay off a couple of your class A bay area properties. Hold those for 30 years, they will always cash flows and I guarantee over 30 years+ you will have done incredibly well in terms of total return.

The only way you get hurt on a roller coaster is to jump out while it is moving.

Have you ever read “Random Walk on Wall Street”, if not I would highly encourage you to check it out. The book is fairly old, but it is an excellent work that describes the importance of being invested in the market and riding out the downturns in the market.

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18 FI FighterNo Gravatar July 25, 2015 at 7:37 am

George,

You’re right when it comes to deflation and currencies — deflation is pretty evident when we look at the picture in respect to the USD, but that’s definitely a different story from the perspective of euro, yen, Canadian dollars, etc…

For instance, gold is in the dog house in terms of USD, but it’s actually holding up reasonably well when priced in a different currency, such as yen.

Over the long-term, I don’t think deflation will ever be a “real” problem. As you mentioned, the Fed or any other central bank will just keep dumping in more money into the system. In the short-term, however, I do believe that deflation is very real and we are already experiencing it to a large degree now.

I’ve loving the discounted prices on oil and energy. I haven’t added any positions just yet, but have been following very closely. KMI is one that I am getting tempted to add at these levels, especially with the 5.6% yield!

Thanks for the tips and discussion. The US dollar is very strong right now. For those who hold it, that can be a good thing as many assets are on sale right now.

Cheers!

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19 JohnNo Gravatar July 24, 2015 at 8:56 pm

When you say you are in cash it is bonds, CDs, TIPS or just plain cash lying in the bank account?
As a fellow Bay area resident I can attest that the prices of houses in SF and Silicon Valley makes me very worried. How large is your cash position (% or $$ numbers)?

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20 FI FighterNo Gravatar July 25, 2015 at 7:40 am

John,

I like to diversify (like always) and hold “cash” in many accounts. Checking, savings, money markets, brokerage, Target Redcard, short-term retirement trust, etc.

Precious metals stored safely or even offshore is another option that is tempting right now (especially with all the turmoil in the world).

Agreed, the Bay Area real estate market looks extra frothy these days. I’m taking the hint and getting prepared for a correction.

All the best!

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