Paranoia portfolios.

IN times of war and financial stress, Dark Ages I investing looks to be making a comeback.

When's the last time you heard anybody chattering about day-trading or the next hot dot-com stock? Now the buzz is more likely to focus on what to stash in the cellar as a Doomsday insurance policy -- gold or silver coins? A six-month supply of freeze-dried foods?

This kind of thinking was big in the 1950s, when fears of atomic warfare touched off a mini-boom in fallout-shelter construction. It flared up again in the 1970s, induced by inflation, the energy crisis, and Watergate.

Much less of it was heard in the '80s and '90s, thanks to a healthier economy and a runaway rise in stock prices. Now Internet discussion groups are reviving the subject of "disaster preparedness."

Every money-management plan needs a good defensive strategy. But an ill-considered venture into paranoia portfolios can expose you to as many hazards as it might protect against.

Disaster investing is prime territory for scams and hype. "I have a little satchel of over-graded coins I can't sell for anything like what I paid 30 years ago,"' said one participant in a Morningstar.com discussion group.

It's also easy to underestimate what a preparedness package can cost you -- not only in outlays such as commissions and dealer markups but in opportunity lost If you put, say, 5 percent of your nest egg into a disaster reserve, chances are you reduce the yield of your portfolio by at least 5 percent as well.

The drain can be greater than that if the "asset" you pick declines in value. The price of gold is now barely more than one-third its high 22 years ago. A precious-metals mutual fund selected at random, the Van Eck International Investors Gold Fund, has 2 averaged a 4.5 percent annual loss over the last 10 years, according to. Bloomberg data -- and that's after a 37 percent jump in the past year through Jan. 31.

When the Internet discussion turned to which metals to buy, one party proposed "some Smith & Wesson steel. Protects against losses and could be used in the acquisition of goods."

Others bridled at that suggestion. A lively discussion ensued about how well gold coins would function as a medium of exchange.

At length one participant in the discussion group dismissed the whole topic as "a waste of time." I'm obliged to agree. The collapse of civilization is probably one risk for which meaningful insurance cannot be obtained.