What the smart money is buying as the market tanks

[IronLionZion]

https://www.cnn.com/2018/12/06/investing/investing-turmoil-smart-money/index.html

New York (CNN Business)The Dow and S&P 500 are now both in the red for 2018, and investors have few places to hide as the stock market tanks. But savvy people are finding some pockets of safety.

Gold, an investment that often shines during times of financial stress, is up nearly 4% so far in the fourth quarter while the S&P 500 and Dow have both plunged nearly 10% and the Nasdaq has plummeted almost 13%. The rise in gold prices has been good news for miners too. Newmont (NEM), which is in the S&P 500, is up nearly 10% since the end of September. The VanEck Vectors Gold Miners ETF (GDX) has gained about 7%.

Utility stocks and real estate investment trusts, which both pay hefty dividends, have held up well too. The Dow Jones Utilities Average has gained more than 3.5%. The SPDR Dow Jones REIT ETF is up more than 1%. "Owning exciting things was more fun and profitable than owning good things," said Jon Cheigh, portfolio manager of global real estate with Cohen & Steers. "But high momentum stocks have started to come under pressure and real estate valuations are finally starting to look more attractive."
Yield plays in focus

Another clear sign investors are craving anything that can guarantee them a bit of a return: Investors keep rushing into bonds, despite the yield on the 10-Year Treasury falling to just 2.85%. The iShares 20+ Year Treasury Bond ETF (TLT) has gained nearly 2.5% this year.

Neil Dwane, managing director of Allianz Global Investors, said these more conservative investments might be coming into favor now because investors are realizing that growth in the US this year might be as good as it gets for awhile.

Personally, I don't trust gold but the rest of the advice is good: dividends, bonds, utilities, food, conservative investments are the way to go as we watch Trump destroy our economy. Don't worry, Trump's buddies are getting rich off this volatility but the rest of us don't have to get eaten for lunch.

[Achilleaze]

1. republicans are trashing America's economy

at the same time they are trashing America's environment, and the truth.

[KentuckyWoman]

2. The day Dumpster got elected I took everything out of stocks.

I'll ride this presidency out with my principal protected but a mere 2.5% interest tops. I know it's a bit silly and I'm costing myself money, but I'm over 70 and never made a lot of money. I can't afford to lose any of it and everything Dumpster has touched all his life has turned to shit.

[Merlot]

3. At your age it's not silly at all, it's smart and the right thing to do.

[nolabear]

4. We mostly got out too. And BOY am I glad we did!

We’re in the middle-not wealthy but hoping to make it. Mr.bear isn’t retired for a couple of years yet. But we’re just short of Medicare and life is fragile. Keeping that little egg safe is paramount in these insane days.

[PoindexterOglethorpe]

5. By getting out then you missed

a significant rise in stocks. Even with this recent drop, the Dow is still about 7,000 points above what it was when Trump was inaugurated. Shifting to different kinds of investments, such as dividend paying ones, would be a better strategy.

As someone else has posted, the Dow will post new highs, but it never posts new lows. Yeah, it goes up, it goes down and in the long run it goes up, averaging out at 10% per year.

[KentuckyWoman]

7. I've been in the market for 40+ years

I'm an accountant by trade. I really do understand the opportunity cost. It isn't a move I'd suggest to a younger group. I would not even suggest it for my own age group. But for me, in my life, at this time, with what I have going on in my household, it was the right move. It wasn't easy to decide and I have no regrets.

[PoindexterOglethorpe]

8. I likewise have been in the market some 40 years,

and I'm 70. It is good that you have no regrets about getting out.

Several years ago my financial guy got me to buy two different annuities, and I have just last week filled out the paperwork to start collecting from them. That is giving me vast peace of mind right now. Meanwhile, I still have money in the market that I don't really have to touch if I don't want to.

[IronLionZion]

6. The FED is raising rates so a savings account is a great place to keep your money

[marybourg]

9. We too got mostly out and glad of it.

I saw tRump as an asteroid heading for Earth.

[cbdo2007]

10. Uh...when stocks go down is the perfect time to buy them.

Why would stop buying them when the prices go on sale??? This is when dollar cost averaging kicks in.

[IronLionZion]

11. Older people would have a shorter timeline for that

younger people have time to wait patiently for it to go back up in a few years after Trump is gone and Dems can repair some of the damage.

Many are suspecting this is a high as it's going to get for Trump's presidency.

[cbdo2007]

12. True, if you need ALL of your retirement money in the next 2 years...

probably a good idea to just take it out and sit on the cash.

Most people though will still just take out a certain amount each month to live on and should leave the rest in to recover. This is still higher than it's been any other time over the past 100 years but spending too much time trying to time the market or predict what it will do is futile. For all we know the market has been held down by Trump and the start of impeachment hearings will show that the U.S. isn't as bad as we all thought and the market will skyrocket. Or it could tank. All that we know is that we don't know, but that in most cases it is a better plan to stay in the market at all times.