It's 1972. Where do you put your savings?

By all indications, we are in for a rerun of the 1970's economy over the next decade. So, let us imagine that we have in fact been transported back to 1972; then as now, the bill for a large war is coming due, and entitlement spending is also increasing significantly. I expect the consequences of this to play out over several years, as they did then.

Where would the best place have been to invest your savings? (Besides gold; let's assume for now that ship has sailed.) The best start would be to look at the historical performance of various asset classes through the 1970's, but I don't have the first clue where to find that sort of thing.

I already know what to do if and when the next Paul Volcker shows up and ratchets up interest rates to put a stop to it; it's the interim I'm wondering about.

Well you can look forward to CD rates topping 20%, along with other things like, say, inflation.

Would be a good time to buy in.

Real property..... lot of good deals hitting the block.

If I recall real estate, comic books, and antiques were good investments back in the 70's.

I'd wait for about three years, then invest in either Microsoft or Apple.

PhotonBoy said:

I'd wait for about three years, then invest in either Microsoft or Apple.

Click to expand...

Yeah, I've heard that these new-fangled computers are gonna be a big hit so use your savings to buy as many of them as you can.

Even at the current price of $926 an oz. I still think gold is a good place to store your money. Also lots of people think it has still got a fair way to go before it's time to sell up.

Coffee can buried next to the dogwood tree in the backyard.

Where do I put my savings? I don't know...hopefully someone secure enough that when I discover CPF I can't spend them all

More seriously, I think technology would be the way to go. Microsoft, Apple, Google/Yahoo and the like.

Regards,
Tempest

Stock, Stock, Stock.

You could just be SO big today. Makes gold, real estate, ect look like peanuts.

Go to bill gates, tell him you pay half of his buying of QDOS for a 25% share of the company.
Or even a decade ago: go to stanford, offer a few people developing a search engine a couple k$ for a percentage in future company worth.
YOU would KNOW that winamp would end up selling for 200 million. Or youtube for billions.
All stuff that started REALLY small, and would have given opportunities for people even with that amount of money you can just scrape together.

HECK, i personally got _one_ share of a shipping company when as a present as a small child, which had numerous splits and ended up increasing in worth by a factor of over 210. That was over a range of 20 years. What if my parents had decided not to buy a car, and instead bought 100 of those instead of one?

Resorts International, Class "B"


Rumor has it, they're gonna' Legalize Gambling in Atlantic City.


Don't tell anyone i told ya'.


Otherwise, i'll be sleepin' wit' da' fishes.


:sleepy:

Stock market. Maybe the porn industry.

into paying off all of your debts. the only debt I have now is the house and that can be paid off in two years if we really buckled down. I have 12 years left on a 15 year note. Our last outstanding debt was the Federal Direct Loans for school.

Now we have the surplus cash to buy something outright or have a significant down payment on property it it craters

Buy stock in a gold mine that's been around for awhile. It may be the best of both worlds. If gold continues to rise -- your stock goes up. If the unforseen happens and causes stocks in general to fall -- the uncertainty will also cause gold to climb and your gold mine stock will rise. Win win.

Peter Lynch said "invest in what you know".

Guess I'm in big trouble

Well, it wasn't long after that that my friend who was helping me learn WordStar on my CPM/86 machine told me this guy named Bill Gates was starting a company with a funny name -- "Microsoft" -- and that he'd taken CP/M, reversed the order of the drives in the disk copy command, and made a few other changes, and was going to be selling it as "DOS" -- Disk Operating System -- for this new desktop computer, the "IBM PC" -- two floppy drives, although it also had the old reliable cassette drive port.

Hmmm. your choice of green or amber monochrome monitors, capable of using my 300-baud acoustic coupler modem.

He thought it might be worth investing in. I figured, hey, how can ripping off CP/M be good?
So I didn't.

I'd recommend not taking my advice.

Books by Al Gore! Not! Good luck!

I'd still go with gold.

Gasoline ! ! !

:devil:

_

hank said:

He thought it might be worth investing in. I figured, hey, how can ripping off CP/M be good?
So I didn't.

I'd recommend not taking my advice.

Click to expand...

Major ow! :sick2:

Regards,
Tempest

In 1972 I was in mortgage backed GICs (CDs in the US). Nowadays it is also known as Asset Backed Paper which is unfortunately now sometimes not worth the paper it is printed on.

I think the current situation is more like 1990 Japan except it is world wide. The bursting of the housing bubble affects every thing else. For those thinking stocks the Nikkei Index dropped to 10,000 in 1990 and is only 13,000 today - a rise of 30% over 18 years! (I think it will be worse this time - baby boomers have been saving for retirement for the last 20 years and putting a lot of that money in the stock market. In 2012 most of them will retire and start pulling money out to live on, and there are not enough of the next generation to buy enough stock to fill the gap so stock prices will fall. Add to the fact the housing crisis has put the squeeze on a lot of people, I do not see good times for stocks for quite a while.)

As I have retired this is not a theoritical question for me. I have about 20 years worth of provincial government bonds maturing in my RRSP (401K in the US). My investment account generates about the same amount of money from dividends. I was lowly paid and have not worked long so my Canada Pension Plan is only $300 a month.
Being retired means needing a steady source of income. Converting my portfolio into bars of gold means I have to shave off a few onces a month to pay the rent and buy food and ahem other things. A real PITA. Similarly my 'investment advisor' would love to charge me $300 a month to sell a small block of stock.

What I have been doing is buying high yielding dividend paying stocks preferrably those that have consistantly increased their dividends over the years. Then reinvest the dividends to grow the portfolio. It's called getting rich slowly. When the yearly dividends is greater than my yearly expenditures retire!

Even now when I am spending the dividends, I still try to save some money from my 'income' and reinvest to stay ahead of inflation.