Dear Mark,
How can we protect ourselves in case of a depression? Hoarding money, gold, or silver would only bring about security problems as I see it. I am not wealthy, but I would like to know how to prepare. I have no debt and have two years’ of income in investments. I have tried to find information on how to keep money during a depression, but there seems to be none. —D. K.

Dear D. K.—

In his book The Only Investment Guide You’ll Ever Need, Andrew Tobias offers ways to brace for financial upheaval, including stashing silver dimes. My review of his book appears on page 7 of the June 2008 Levitt Letter,

Perhaps no one can “survive” a depression financially unless he has: 1) assets to liquidate to pay for necessities during the depression, plus 2) assets that will retain their value or at least recover their value soon afterwards—such as real estate and marketable skills. Balancing our investment in these “treasures” reminds me of Mt. 6:19, which mentions the risks of moth, rust, and thievery and admonishes us to store our riches in Heaven. Keep the faith and “consider the lilies of the field.” Matt. 6:28

Half of this ministry’s modest reserves sits in a Vanguard treasury bill mutual fund. The other half is in a balanced fund called the Vanguard STAR Fund. Many investors gravitate toward one of Scott Burns’s nine “Couch Potato” portfolios. His variations hinge primarily on splitting investments between two to nine mutual funds, primarily from Vanguard.

According to the “Couch Potato Cookbook” article at, “Couch Potato investors tend to lose less in a down market and make more in an up market…almost always in the top 50 percent and frequently in the top 25 percent in portfolio categories called ‘Moderate Allocation.’” The article answers these questions: 1) Where do I belong? 2) Can you make substitutions? 3) But suppose I hate to cook? Then what do I do? and 4) Will I benefit from having an AssetBuilder portfolio?

Yes, the seven members of the team at AssetBuilder have a service to sell. But they give you enough specifics to deal directly with Vanguard, which offers optional flat-fee financial advice. Though I see merit in all that Burns has to say, I’m still investing only with Vanguard.

If you click on “Couch Potato Results,” you’ll see that nothing stock-market-related looks very pretty right now. However, once a prospective investor is out of debt and has six months’ worth of income in the bank, he may gravitate toward the Couch Potato’s basic goal of investing: quick, simple, cheap, and effective.