My father-in-law is 90 and has about 150K in a managed account. He is not using any of this but he is very worried about the Y2K thing and wants to protect his capital. He doesn't know much about financial matters(neither do I, but with TMF's help I am learning!). We need suggestions about what to do. We are thinking about just parking the money in a Schwab money market fund until after the first of the year and getting back into the market after everything settles down. I hope this isn't too vague. Thanks for the help.
If you truely believe Y2K is going to meltdown the economy on a large scale, the only safe investment is gold (or other such investments--diamonds, antiques) that you can hold in your hand and use in the future barter economy.However, if you go that direction and it fails to occur, you will definitely take on some expenses that will give you reduced return.Government bonds of some type are probably a second choice (but will paper money have any value?) Money market funds come close to this. Your risk is that computers will fail at Schwab, or the money fund provider.Personally, I think all of this is over reaction. Most key Y2K problems have been addressed. The remaining ones can probably be fixed with minimal damage. I think Y2K will be no more than a blip on the economy--unless investors panic.
Greetings, FredCrist, and welcome. You wrote:<<My father-in-law is 90 and has about 150K in a managed account. He is not using any of this but he is very worried about the Y2K thing and wants to protect his capital. He doesn't know much about financial matters (neither do I, but with TMF's help I am learning!). We need suggestions about what to do. We are thinking about just parking the money in a Schwab money market fund until after the first of the year and getting back into the market after everything settles down.>>What you are trying to do is predict the direction of the market and time your exit and entry to preserve your capital. That approach might work, but not with any degree of consistency. Too often fear drives many folks out of the market when prices are at a low, and they reenter when prices are at a high. The market moves rapidly, literally in hours. If you get out now, will you know when the bottom has been reached so you can return before prices get out of hand? Timing by and large is an ineffective strategy.That said, your father is age 90 and realistically has but a few years of investing ahead of him. Therefore, especially since he doesn't need the income or inflation protection anyway, because he doesn't want to take a risk on what might occur (however immenent or remote that may be), then by all means he should park it in a stable money market fund until he is comfortable once again with reentering the market.Regards..Pixy
he is very worried about the Y2K thing and wants to protect his capital.Why? Is he worried that he will lose his money permanently or that there will be a temporary dip. Since he is not using any of it, the simple thing to do would be to leave it alone.You have not said what the money is invested in, and what there is to worry about.Zev
I don't think I would question someone who has lived through the great depression. Yeah, take the $ out of stocks, park it in either a MMF or CDs (you can buy CDs through Schwab) and then relax. Your only loss will be opportunity cost, assuming we don't go into TOTAL meltdown.-Mark
I found this humerous diversion for those who worry about bank failures for Y2K. It is a parody ad for the "First Mattress Bank - the ONLY truly Y2K complient Bank". You need Adobe Acrobat to view it.http://www.dumbentia.com/pdflib/mattress.pdfSorry if this seems a bit off topic. I always find humor helps when trying to cope with serious subjects.
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