[xayide]

Gold worries me these days. It's gone up so much lately that I think it's overvalued. Of course, I discouraged my husband from buying up gold when it was much cheaper a year ago for this same reason and he still hasn't forgiven me. For a civilization collapsing catastrophe, I still think we're better off with the bags of rice and bottles of bourbon we hoarded instead.

I'm not a fan of index funds. At the risk of going against popular wisdom, I think it's better to put your money in a fund that is actually managed by a financial professional. Index funds follow the general market hell or high water, and even though their fees are generally lower since it doesn't take any brains to manage one, you'll never maximize your returns (or these days minimize your losses) with one. The key phrase to look for is 'no load mutual fund'. These funds will generally minimize fees at the time of your deposit and withdrawl. I've been happy with the Muhlenkamp Fund overall, of course they're in the gutter like everyone else at the moment.

The thing to remember is that the price of both gold and funds will fluctuate, and in either case you wouldn't be able to get at your money right away. I keep an HSBC high interest rate savings account for emergencies. There's enough money in there to pay my insurance deductibles if I crash my car into my house and both burn down. I contribute monthly to pay my semi-annual insurance premiums plus a little extra to give me that deductible buffer. It's probably around 2 months living expenses, which is within my risk tolerance, but you might want to sock away at least 3 months worth before investing the rest.

[Tichy]

I haven't bought gold last year for the same reasons, but now I am sorry that I don't have any. The thing is, I wouldn't buy it so much as an investment, but rather as a kind of insurance. So ideally I would never have to sell it, and pass it on to my children instead. It would still be annoying if it would lose it's value (as it probably would occasionally), but I don't know any good alternatives.

[mattmcknight]

Agree on index funds being bad in general. They distort the market. CRM at over 300 Future P/E...who wants that? You watch the whole market over swing...

I think gold is a better move than anything denominated in dollars. Inflation is coming.

A good amount of cash and physical assets makes sense for emergencies- if power goes out for a couple of weeks, the atm won't work.