Many times just using logic an investor can steer away from problems. It seemed forever municipal bonds were considered one of the safest investments. One did not get rich by investing in municipal bonds however they were consistent and the default possibility was almost not a possibility. Fast forward to 2009 municipal bonds have to be one of the scariest investment choices. All one has to do is to look at State by State finances to be aware.

California faces a $60 billion deficit, New York faces a $3.2 billion deficit and another example New Jersey faces an $8 billion structural deficit next year. If States run deficits like this why would one want to lend them money? I surely would not. One could argue if a State defaulted…then the FED would bail them out. Really who needs that aggravation and worry. We are in some extremely uncertain times. What I hear day in and day out..

What do I do with my money?
Where is a safe place to put my money?

The answer is to diversify. Do not have more than 5% of your assets in any idea. Even leaving money in the bank is risky due to potential inflation. Now more than ever one should consider at at least a 5% allocation to trend following a basket of commodities. Trend following strategies are liquid and transparent.When one trades commodities they are dealing in real assets. At the end of the day if the crisis worsens ( unemployment now at 10.2% in the US) trend following shines during crisis times. People still need to eat. People still need heat in their homes. People still need to put gas in their cars. The world will not end but it stands the chance of changing very much from what we have taken for granted.

Andrew Abraham
www.myinvestorsplace.com

Andrew Abraham has been in the financial arena since 1990. He is a commodity trading ddvisor and co manager of a Commodity Pool. Since 1993 Andrew has been a proponent of quantitative mechanical trading programs. Andrew's major concern is not only total return on investment but rather the amount of risk that one would have to tolerate in order to achieve returns He focuses on developing quant models that encompass strict risk adherence and correlation. He has been a speaker at conferences as well as an author of numerous articles. Andrew has spent years researching ideas that have the potential to outperform indices as well as maintain fewer draw downs.

Visit Angus Jackson Partners (http://www.angusjacksonpartners.com) Contact: A.Abraham@AngusJackson.com (mailto:A.Abraham@AngusJackson.com)

© 2009 Copyright Andrew Abraham - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.