Popular Investment Decisions Designed to Avoid Financial Crisis Effects

[Editor's Note: Last week we asked readers to tell us if they were confident in their financial game plans. Check out the answers below, along with next week's Question of the Week, "With a Weak U.S. Housing Market, Is Home Ownership Still a Good Investment?"]

Almost all U.S. households make strategic investment decisions to best protect their hard-earned money.

Yet, as anyone who makes a financial game plan knows, even the most detailed, thorough outlines can fail when real life intervenes.

Just ask the thousands of Americans suffering while tornadoes and flooding continue hammering the U.S. South and Midwest regions, leaving whole towns of people homeless and jobless.

The rising Mississippi River has swept through an area that Missouri Gov. Jay Nixon described as "literally the most productive part of our continent," meaning farmers have watched their only sources of income wash away in floodwaters.

Farmer Bryan Feezor said so many submerged fields can make anyone "sick to your stomach."

"Farming is all I ever have done ... and it's under water," Feezor told CNN affiliate KPLR. "I really don't know (what I'm going to do)."

Many U.S. households rely on insurance payments, savings accounts and other financial assets to bail them out when times get tough. But not every household has its back-up plan available to them since tapping that source to survive the financial crisis.

Now Americans are struggling to get their financial game plan back on track amid a weak global economic recovery, volatile stock market and discouraging job market. Higher energy and food prices also have led to increased household spending, and rising costs have many U.S. workers concerned they won't have enough money to retire when they are eligible.

A recent nationwide public opinion research study by the National Institute of Retirement Security found that 54% of those polled are very concerned about the effect of economic conditions on their ability to have a secure retirement. About 78% felt the average worker was unable to save enough on his or her own to guarantee retirement.

So many Americans have created a new plan to prepare for retirement: never retire.

Another survey by the non-profit Transamerica Center for Retirement Studies found 39% of people said they'll work past age 70 or simply never retire. About 40% of workers said the recession will force them to work longer than planned - up from 28% who said that a year ago.

But these workers' new financial game plan of forever working is far from unassailable.

"Planning not to retire is not a retirement strategy," Catherine Collinson, president of the Transamerica Center, told MarketWatch. "Too often, life's unforeseen circumstances can dictate otherwise, be it through a job loss, health issues or life's other obligations."

This prompted last week's Money Morning "Question of the Week": Are you confident in your financial game plan? Do you feel you/your household is well prepared for a weak economy? What is your biggest concern about how your financial plan could fail? How have you adjusted it recently to account for changes in the economy?

Keep reading to see the kind of investment decisions Money Morning readers have made to protect against future financial crises.

Never Prepared Enough

Anyone who is confident in his or her financial game plan doesn't understand the situation. Oh sure, the very wealthy can be pretty sure that they will not go bankrupt, but for most of us the risks are varied and not fully quantifiable. I am trying very hard to protect myself against serious downside while still having potential for good upside, but lots of things could go wrong.

Although I am trying to invest wisely, I am focusing even more on reducing my cost of living and keeping a reserve to see me through dips and reverses. My wife and I have moved to Ecuador to take advantage of the low cost of living, not to mention the great climate and wonderful food. And I find that when I am less stressed, I am generally able to make better investment decisions.

-- Gordon F.

Ready For Anything

I sold my mutual funds so when the crash hits, it won't hit me! Then bought silver and a few other investments. Stocked up on some basics like water and canned food, refinanced my mortgage, got rid of my loans. I'm ready for anything now!

-- Kelly C.

U.S. Dollar Makes the Last Call

My personal opinion is this...if the dollar goes it won't matter how much planning you did for the future...if it collapses the game plan is over, even as prepared as you thought you were!

-- Jason R.

Tempted to Cash In

I'm a 55-year-old retired teacher that is very tempted to cash in a $46,000 teacher's savings account rather than waiting until I turn 59 (knowing I'll pay a huge penalty leaving me about $33,000 to invest). I'm just thinking and wondering if it makes more sense to go this route and invest the remaining $33,000 in the bullish silver and gold
markets, as well as new alternative energy markets.

-- Gary L.

Time for Metals

I now find myself bullish on precious metals, investing my CD and IRA money in physical silver and gold and, to some extent, in start-up mining companies. Reason? The faltering U.S. dollar and collapse as the world currency, overall global commodity pressure, and dangerous government policies/direction.

-- R.S.R.

Stung by the Market

As an 85-year-old military retiree, I got stung in the stock market several years ago. So, for the past 10 years or so, I have invested in munis. The least any of them are paying is 5% double-tax-free.

-- Ben H.

Silver All the Way

I got into silver at the beginning of September. My coin shop owner ran the numbers showing my husband and I that our plan to put a chunk of money into savings would not be as profitable... in six months, you know, our money doubled.

-- Michelle K.

[Editor's Note: Thanks to all who responded to last week's "Question of the Week" about their financial game plans.

Be sure to answer next week's question: With a weak U.S. housing market, is home ownership still a good investment? Or do you favor renting? How important is it to you to be homeowner one day? How has the U.S. housing market and home prices affected your home-owning decisions? Have you been helped or hurt by low prices? When do you see prices recovering?

Send your answers to [email protected].!

Is there a topic you want to see covered as a "Question of the Week" feature? Then let us know by e-mailing Money Morning at [email protected]. Make sure to reference "question of the week suggestion" in the subject line. We reserve the right to edit responses for length, grammar and clarity.

Thanks to everyone who took the time to participate - via e-mail or by posting their comments directly on the Money Morning Web site.]

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