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Author: PosFCF Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 454800  
Subject: Re: Cyprus bailout/bank run Date: 3/18/2013 4:31 PM
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I have a few equities, and am looking for more in a small way, but I can't see putting my life savings at risk right now.

Then it becomes of paramount importance to do some serious thinking about what defines "risk" in your environment. Is there more risk to having one's wealth (or a portion of it) confiscated (a la Cyprus) or more risk to having one's interest rates on debt service start rising?

Is there more risk to one ability to increase (or even maintain) one's income or to one's ability to pay increasing household bills?

Is there a better rate of return on paying down credit balances or a better rate of return on invested assets?

It seems to me as though we are all living in a world represented by a spinning top and that the spin is becoming more eccentric (more serious wobbles). The answers for one may not be applicable to many or even any others.

When I talk with friends and have conversations about how to plan and respond to current times the issues I like to address have not changed much, even with the increasing wobble: If you must carry debt, get as much of it at a fixed rate as possible. If you are carrying a lot of debt, it might be best to pay it down to a level where it will be sustainable in a crisis. Make sure you keep your larder full and to rotate the food so that you don't end up wasting some. But most of all, plan as if tomorrow will be much like today, because if it is, then you'll be OK then because you're OK now.

Taking some conservative preventative measures in uncertain times is not unhealthy unless one lets themselves get carried away.

Poz
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