We're up to our eyebrows in debt--consumer, corporate, government. The nation's debt problems are so large that the sky will fall on the majority of people. To survive, boomers will have to save--lots.
How to invest for your retirement?
Divide your investments into three parts. The first assumes you want to be able to live through a Great Depression. Choices here could include money markets, CDs, savings bonds, Treasuries, and debt-free real estate--investments you can get your money out of no matter what.
The second assumes the American people will wake up to our problems, so it comprises a very conventional mix of stock and bond funds.
The third part assumes we'll have hyperinflation from all the debt we'll be trying to sell. The choices for that scenario include leveraged real estate--real estate investment trusts and even rental homes--stocks, inflation-protected Treasury bonds, and inflation-adjusted immediate annuities.
The largest part of your investments can be in conventional, but what you keep in the hyperinflation and depression portions is sufficient to get you by, especially if the conventional part isn't wiped out. To determine the fixed-income percentage for all three will depend on your age and how far away you are from retiring.
Source: Henry "Bud" Hebeler's free website (www.analyzenow.com) as reported in BUSINESSWEEK, February 2, 2009
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