Invest In The Economy Going Down
By: John Fisher
One of my clients recently shared this perspective with me. It was very insightful on his part.
Think for a moment. Almost every financial decision we make, we do in the hopes of appreciation or profit. This is true of stocks, bonds, real estate, money markets, CD’s, small business ownership (closely held businesses), our salary or compensation, retirement plans, etc. With the exception of casualty insurance, term life insurance, automobiles and general living expenses – virtually all other financial transactions are made in the hopes of appreciation.
Well, what happens if they don’t appreciate? Consider the impact of an increasingly tenuous stock market, a myriad of bond market challenges, possible further real estate declines , world geopolitical events spiraling out of control, loose monetary policy ensuring further liquidity injections, no stomach by policy makers and Congress to reign in fiscal policy – the list goes on and on.
What to do? Again, virtually all of our investments are made in the hope of a healthy economy. My friend went on to say, “I am investing a significant portion of my assets in physical gold and silver in the event of our economy worsening. I see the tangible evidence of a worsening economy on the horizon.”
Invest in the economy going down. Isn’t that the classic definition of a ‘hedge’? Hedging one’s investment is a technique used by the world’s most successful investors and traders every day. It is only prudent to protect your core position.
If gold and silver serves as one of the best hedges against economic uncertainty, then the question becomes how much? In today’s environment, one should have a minimum of 10% to as much as 30% of your investable assets in metals depending on your risk tolerance.
All Things Considered – John’s Commentary
There is a reason why the phrase, “I had better hedge my bet” has become so popular in today’s current economic climate. Have you hedged your bet?
What to buy: Silver is still cheap at $33 after having declined from almost $50. We have a variety of silver coins available at low premiums.
Quote of the day: “Even when Rome had lost much of her prestige, trade all over the world was operated with Roman gold coins which were accepted and admired everywhere.” – Paul Einzig
