Pelican Parts Forums - Just got $120,000...how do I invest it safely for 1 year?

Quote:

Originally Posted by MRM (Post 3984687)

Gold is at historic highs. So of course you want to buy now, when the market is at its highest, right?

Seriously, gold could go up more, but if oil has hit its peaks it's probably not going to. It could just as easily drop 20% in a year. That's twenty grand. Ouch!

You can buy Treasury bills or bonds through the Treasury Direct program. Specifically look into the inflation indexed savings bonds.

I'm very bullish on gold since I'm expecting price inflation to really pick up over the next year. That said, if your goal is "capital preservation" over the shorter term, I'd look into the inflation-indexed bonds mentioned above. You never know how the markets will react, nor how the largest holders of gold, the world's central banks, might try to manipulate the price of gold. You don't want to be holding it if there were such an attempt at manipulation -- the central banks could force the dollar-price of gold down substantially over the short-term, as they are holding literally tons of gold originally confiscated from the citizens when the gold-backing was removed from currencies.

The government is lying about the inflation rate, but they will be able to carry that lie for only so long and only so far, so you will still have some protection if you buy the indexed bonds.

If you go the CD route, I would stick to very short-term CDs. Again, I expect we will be seeing some massive jumps in the reported inflation rate over the next few months, you don't want to be locked in to a low interest rate if the inflation rate really starts to jump.

Edit: On a side note, gold is not at historic highs when measured on an inflation-adjusted basis. It would have to exceed about $2200/oz before it breaks the highs set in 1980.