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Dear all,

So, I'm hoping some of you highly intelligent, information-addicted and interesting people can provide some advice. I see another big correction coming later this year in the August-October time frame. Some analysts have been predicting between 10 and 15%. I don't think it's too far fetched for a number of reasons. Given that is the case, here is the scenario:
-Inflation will be increasing throughout the year (maybe faster than the market expects)
-Government bonds will continue to go down in price (with the yield increasing), corporate bonds will probably lose business as people go to treasury bonds instead. That makes buying bonds from that period a big of a bad bet.
-Money market funds won't do as well because of inflation, but will provide a quick means of buying the dip
-Oh and this http://www.govexec.com/pay-benefits/201 ... =top-story.

So where does that leave me to place my tiny investment? I'm planning on following our seasonal (to be out of the market between August-October) with my brokerage account to avoid the correction.

Where is a good place to park for those months?

I have read that utilities and REITs are great places to park during higher inflation periods, yet they would be hit by the market correction just the same.

I would be interested to see what others are planning.

Best,

Me

For that relatively short period of time, I’ll be in the G Fund.

Trust me, if you think the market will tank it will soar to new highs. After years of dealing with the market, I am convinced that the best time to sell the risky funds is when everybody thinks it is a good time to invest. Don’t listen to the pundits. They will cause unnecessary fear resulting in you losing money. I love how they throw out 50 predictions, get 1 right out of luck, and go on CNBC telling everybody “I told you so”. The first 3 weeks of January being a prime example.

Exactly Octjan2, I couldn't agree more.

I don't know how much inflation is going to price the market. The predictions of 2% inflation have been baked into the current market. I don't see anyone credible saying inflation will be a surprise. The other think that's interesting is the value of the dollar. A weaker than usual dollar has been pushing the I fund higher.

January was a test for the market. It dipped and rose quickly. There's more volatility ahead, but (based on what is going on now) I don't see a sharp correction like we saw in August 2008.

If you're really concerned about a dip, I suggest that you look at parking an amount you're comfortable with in your G fund (25%?). That 'safe' money is your hedge; if there is a sudden dip, you can push that money out of the G fund and help speed your bounce.

bamablue wrote:I don't know how much inflation is going to price the market. The predictions of 2% inflation have been baked into the current market. I don't see anyone credible saying inflation will be a surprise. The other think that's interesting is the value of the dollar. A weaker than usual dollar has been pushing the I fund higher.

January was a test for the market. It dipped and rose quickly. There's more volatility ahead, but (based on what is going on now) I don't see a sharp correction like we saw in August 2008.

If you're really concerned about a dip, I suggest that you look at parking an amount you're comfortable with in your G fund (25%?). That 'safe' money is your hedge; if there is a sudden dip, you can push that money out of the G fund and help speed your bounce.

Hmmm, good point. Thanks.

I'm sticking to my 16517 plan and not budging.