Viking

2008 was the year of the financial crisis. 2009 will be the year the recession hits. - The bad news has not yet hit mainstreet. Unemployment will likely hit double digits. - Company earnings will likely get worse going forward (not just financials). Talking to my friends and financial advisor it appears to me that most people are very fearful but still 'invested for the long term'. Most research pieces I read bank on a 2H 2009 recovery (as all the stimulus takes hold). The scenario most think unlikely is another 30% drop in the markets. I was reading somewhere that investors in the Great Depression did not get wiped out with the '29 crash in the markets as they bounced back somewhat in '30. It was the 30 to 32 fall that really cleaned people out. My read is the risk of a further material drop is quite high. I do not see enough upside opportunity in the next 12 months to want to risk my capital. I will invest a small part of my portfolio to take advantage of some opportunities. However, capital preservation is my new mantra.

I'm not sure what this has to do with W Buffett??? Peter married her mother. Peter has lots of cash. If anyone should be discussed in this article is it not him? Perhaps we have not heard the whole story...

My strategy today is simply to keep what I have = capital preservation. I think people are wayyy to optomistic about how cheap the market is, how cheap companies are etc etc. Yes, in 12 months we will look back and there will have been certain sectors and companies that will have done extremely well. Individuals who invested in said companies will have performed very well and may attribute it to skill. I think we are in a very dangerous time. Paradigms are shifting. What was 'common sense' will no longer be so. This is not a regular recession. Cash is king. We are no where near then end of the pain... how can one 'invest' right now and not have a better understanding of whether we are in the 2nd inning or the 7th inning of this mess?

Packer, I see the amount they have fallen and also am tempted. But I wonder if asset prices continue to fall (i.e. stocks and corporate bonds continue to fall in value) and with treasuries at such low yields are life insurers still too speculative to consider as a sound long term investment. Sorry for not answering your question!

I agree with what CM proposes... However, US politics appear to be so divided (kind of like BC politics) and so interest group driven I do not have much confidence that his advice will be taken seriously.