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When others zig, I zag.
Barron's put together a great article back in July highlighting the fact that emerging markets hit a fresh high in late July/Early August. At this point in time it makes sense to begin protecting your portfolio by thinking like a contrarian. In fact, one of the greatest investors of all time has said that zigging when other zag is a highly profitable idea. "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." - Warren Buffet I strongly believe that a solid financial education will always win out over the flashy, new thing. When you know why to invest your money, and where to look for value, you can pull back and look at the over all picture of the economy and make a sound financial decision. Overall, the economy is slow, but growing. However, with emerging markets at all time highs recently, and the US stock markets as well, it makes a lot of sense to begin taking a contrarian position right now. Whatever you do, do not invest large amounts of money in stocks right now. When the crash (read: depression, recession, pullback, or whatever other fancy name they want to call it) happens (and it will happen in the future), you will be able to protect your portfolio and maybe even make money on the sell off of stocks. Buying and holding at these levels is insane! Additionally, should the dollar weaken due to slower economic growth, it also makes sense to place part of your portfilio in hard assets like gold, silver, platinum, and palladium. I would not be a buyer of ETF's in these assets, I want to touch and hold it. Remember, hard money like gold and silver are one of the few things that the government does not tax capital gains on. In other words, you can buy all of it you want, and sell it for a profit later with 0.0% in taxes. It was also just April of 2011, when silver was almost $50 per ounce. It is now currently only $17 per ounce ALMOST 7 years later. Yes, the economy has recovered since 2011, but every cycle tends to last 8-12 years. 2019-2023 looks particularly troubling to me. Should we have any political turmoil, natural disaster, or physical attack on this country in the next 2-3 years, the economy will devalue quickly. Also, let's not forget that the first wave of baby boomers will be forced to start making mandatory withdrawals from their retirement accounts soon. I am geniunely concerned for your financial future. Be prepared. Donnie Masters |
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May 2019
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