5 Places To Put Your Money Now

Media / Blog

5 Places To Put Your Money Now

Prev

Are Diamonds as an investment an alternative to the stock market and gold?

August 29, 2011

The recent United States credit downgrade, unsteadiness in the stock market, and overall challenging economic times have had some people asking where might be a good place to put your money now. As always, you should consult a qualified financial advisor, CPA, or other professional before making any final decisions. Your choices should also be based upon the time frame to your goal, tax management considerations, and your overall cash flow within the context of a comprehensive financial plan. The information below is just my opinion.

It should go without saying that if you have any outstanding debt with high interest rates including credit cards, personal loans, or automobile loans, pay those down first. It is best to get rid of consumer debt and no person today can find you a safe investment with the same rate of return as paying down your credit cards. Here are five areas that I think could be good for your money now.

  • Treasury Inflation Protected Securities - With treasuries in general, you loan the US government money and they give you a piece of paper in return TIPS are supposed to be investments that will provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a Treasury Inflation Protected Security matures, you are paid the adjusted principal or original principal, whichever is greater. If you believe there is going to be inflation, and you want the security of a US government investment, then TIPS could be for you. As with Treasuries, you can invest in funds (e.g., Vanguard Inflation-Protected Securities Fund (VIPSX), Fidelity Inflation-Protected Bond Fund (FINPX), etc.) or exchange traded funds (iShares Barclays Treasury Inflation Protected Bonds (TIP)) instead of buying directly from the government. I like having funds versus holding an individual bond do to the ease of liquidity. I think it is only a matter of time before we see inflation rear its ugly head.

  • Paying Down Your Home Mortgage - Most financial advisors believe they can do better with your money by having it in long term equity type investment that should do better than the net after tax cost of borrowing rate of your mortgage. In the past twelve years, we have seen how low of a return you would have earned if you deployed that strategy. Nobody knows exactly where the stock market will go over the next decade, but you do know what a good feeling both financially and emotionally it would be to pay off your home. You could have job changes coming up in the future or income changes that you will not be able to anticipate. I've done this personally, and I think you would be well advised to start taking chunks of income, bonus money, or triggered stock options and just pay down your note. Don't think about how fast your real estate is going to grow, but rather how it will affect your overall expenses and the real return on your cash by paying the home down. Not to mention what it will do for your stress level.

  • Foreign Currencies Of Aaa Rated Countries - There are still 18 countries who maintain the Aaa credit rating from Standard and Poor's agency. If you have traveled abroad the past couple of years, you have probably noticed that the U.S. Dollar has declined in value against other currencies. While some of these countries are plagued with the same corrosive mortgage backed securities and derivatives we have dealt with in the United States, other countries have by in large escaped a bunch of this mess. It used to be true that the only main was to buy currencies of foreign countries was through Forex, but today you can buy exchange traded funds through any regular brokerage house. For example, Currency Shares Swiss Franc Trust (FXF) and Currency Shares Australian Dollar Trust (FXA) are two that can be bought with relative ease. These currency plays would be a good idea if you believe the US Dollar is going to continue to decline over the next several years.

  • Hard Assets - If you believe paper around many parts of the world is going to be worth less, than the question is what is worth something? Hard assets are typically defined as assets with intrinsic value such as land, precious metals, diamonds, oil, gas, and certain types of real estate. Remember that these types of assets are long term assets and can have the ability to fluctuate up and down in value. They tend to be better assets to own during higher inflationary times, and can be bought direct or through stocks, exchange traded funds, or mutual funds. Some parts of this market have grown already while there are still some cheap opportunities to buy in the market place.

  • Dividend Paying Companies With More Than 50% Of Their Revenue Outside The United States - People often ask today, "so how do you think the stock market is going to do?" While I cannot comment in these articles about specific securities, I recommend you asking yourself the question on what does 'the stock market' actually mean. Many of the companies in the Dow Jones Industrial Average are large conglomerates that do business both inside and outside of the United States. As many emerging markets begin to industrialize and modernize, there is significant opportunity for large U.S. based companies to expand outside of the United States to grow their revenue base. I would look for companies like these that now have more than 50% of the revenue outside the U.S., and they are paying a regular dividend to their shareholders.

It's important with the ups and downs in the markets to review your investment portfolio and make sure you have a balanced approach of having a core and opportunity portfolio. We generally tell clients today we act like an investment personality of part Warren Buffett and part Jimmy Buffett. Some part of your portfolio has to be a long-term managed asset allocation of buy and hold and part of it is seizing on the opportunity of where it just turned 5 o'clock. Go to www.oxygenfinancial.net to request your FREE consultation and investment portfolio today!

Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder oXYGen Financial, Inc

What is a Private CFO - Find Out Now

Have Financial Questions? - We have the Answers!

oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice and Smart Money Moves to the X and Y Generation.

Phone 1.800.355.9318 or 770.777.0427

oXYGen Financial - Atlanta Georgia Financial Service Experts

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS. NFPAS does not provide tax or legal advice. This site is published for residents of the United States only. Registered Representatives and Investment Advisor Representatives of NFP Advisor Services, LLC (NFPAS) may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact NFPAS Compliance Department at 512-697-6000. PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. NFP Advisor Services, LLC makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is NFP Advisor Services, LLC liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

Next

The Lifestyles Of The Rich and Famous

Sign Up

Sign up for our exclusive Sunday Paper with a weekly market commentary, insightful personal finance blogs, and life changing education guides.

Email sign up

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. Kestra IS and Kestra AS makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is Kestra IS and Kestra AS liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.