October Surprise – Financial Alert!

¡Financial Investors Alert!

Thunderstorm building
“Gathering Storm”, by (© 2013) me.
I believe we are at a point in the political and economic environment where one should carefully examine the current asset allocation and risk level in one’s investment portfolio and re-balance now if necessary.  Particularly if you are in or very near to retirement!  I have sold most of each of the bond funds that I own because I believe that once the Fed. starts tapering, they will continue to do so for some time, say one to three years and that this will cause a severe bear market for bonds of nearly all stripes, particularly treasuries.  I do not see any upside and nearly all downside to owning bonds at this point, except to maintain a token diversification.  I’m not recommending a general selling of stocks at this point but simply that if you have been investing on autopilot of late, that you double-check your asset allocation now!  I believe that with the government shutdown, the very real possibility of a “default” or reduced credit rating for U.S. treasuries, the rising drag that Obamacare is putting on employment and the general U.S. economy, that we could be in for a significant correction and the small possibility of a bear market if the debt ceiling is not raised or the shutdown is prolonged.  Due to the large rise in stock prices over the first nine months of this year, it is also very easy to have stocks now representing a higher percentage of your portfolio than you realize thus requiring re-balancing to maintain a proper asset allocation and risk level.  I have sold one of my 401k accounts (stocks to money-market) to accomplish this and position myself in a bit more neutral position during this turbulence and because I’m willing to sacrifice some potential gains because I’m simply NOT going to allow my 401k plans to become “201k”s again, like in 2008.  I’m too close to retirement and don’t got time for that!  I’m not selling any taxable accounts (that could trigger capitol-gains taxes) yet, but am on alert for the possibility of selling a lot more if this debt ceiling thing really goes South this month and will post back here if I do!  For more good info and investment tips, check out Ken Moraif’s “Money Matters” and “The Motley Fool!

One Comment

  1. Posted October 9, 2013 at 11:06 pm | Permalink | Reply

    Oh the turbulent times we live in. Just remember that this world is not your home and that no matter what, be right with God so you can get to heaven with no debt (except love), no borrowing beyond our means and no Obamacare. I’m really not a worrier. Just ask Darryl. Nothing here compares with up there! Blessing to ya, Jim

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