Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Mastering the Art of Financial Backtalk

Stock-Markets / Financial Markets 2014 Dec 12, 2014 - 03:09 PM GMT

By: Dennis_Miller

Stock-Markets

Alan Greenspan has popped back into the limelight and confirmed some of my worst fears (not that they needed much confirming). Here’s a recap of statements Greenspan made at the New Orleans Investment Conference:


  • The Federal Reserve’s primary mission is to support out-of-control government spending. To do so, it’s “created” trillions of dollars. Regardless of who is in office, politicians can’t help themselves.
  • Spending will continue. If the Fed tries to reverse the trend, there will be a significant market event. If it keeps doing what it’s doing, significant inflation is inevitable.
  • A lot of people will be hurt.

Frankly, Greenspan’s candor surprised me, but my colleagues who attended the conference confirmed a series of reports I’d read. All this means that seniors and retirement investors, particularly those holding the majority of their wealth in US dollars, are holding one foot off a cliff. There is a better way.

Should you buy gold? That depends. A solid portfolio has 10-20% (depending on your comfort level) in core holdings for catastrophe protection. What are core holdings? Precious metals certainly fit that bill, as does farmland, certain foreign currencies, fine art, and various other tangible assets. Now is a good time to review your core holdings. If you’re adequately protected from the big, bad event, then you don’t need more.

If, on the other hand, you need to up your catastrophe protection, precious metal prices are making it an attractive time to do so. Remember, these investments are there to protect you and your family. They are the ultimate safety net, and it’s worthwhile to consider where you own these assets. Keep some of your insurance where it cannot be easily confiscated.

We live in dangerous economic times. At Miller’s Money, we’ve cautioned our readers about the possibility of a “significant market event” and the possibility of high inflation, and we’ve shared step-by-step guidance for those who are do-it-yourself money managers.

And while I encourage all investors to do a year-end portfolio audit with these concerns in mind, many financial advisors disagree over what a well-protected portfolio looks like. I often hear from income investors who’ve spoken to their advisors about high inflation concerns, only to be brushed off. Many report firing their advisors because they thought their nest egg was at great risk and the advisor refused to listen.

Don’t accept the brush-off. Whether your go-to guy is a fee-based CFP, a stockbroker, or a well-intentioned adult child, sit down and review your portfolio in depth with the worst-case scenario mindset. Ask yourself:

  • What happens if there are five-plus years of double-digit inflation?
  • What happens if the market drops 50% or more and doesn’t rebound?

This is not a drill, folks. These are distinct possibilities.

It’s unfortunate when a trusted advisor brushes off your concerns as unrealistic or insignificant. Here are some typical responses you might hear:

  • No need to worry about inflation. It’s less than 2% and under control.
  • Not to worry. You have a little money invested in TIPS.
  • You are well diversified within our family of mutual funds. You are protected.

Don’t let this sort of arrogance keep you from protecting yourself. Here’s what I’d say to those three comments respectively:

  • I know what the current inflation rate is, but it might go much higher. How can I protect against high inflation destroying the value of my life savings?
  • TIPS do not hedge against inflation. They don’t even keep up with inflation. They’re a terrible investment.
  • How does a family of funds in all US dollars and US companies protect me if the dollar rapidly declines?

Act like a Boy Scout. There is no downside to preparing. It’s much, much easier to prepare and be wrong than to try to recover after a disaster hits—especially if you’re over age 60. There’s good reason the Boy Scout motto is, “Be prepared!”

Alan Greenspan is an insider if there ever was one. Hearing his concerns clearly expressed is cause for a complete portfolio review—sooner, not later. There’s nothing to lose and much to be gained. When Greenspan talks about high inflation and a significant market event, how much more warning do you need?

When you boil it down, it’s pretty simple. You might have to make some adjustments to protect against inflation and market exposure. The right adjustments will reduce risk and have minimal effects on your investment income. On the flip side, doing nothing may have negative, life-altering consequences.

If you’ve never done a full audit of your portfolio, the right financial advisor can pay dividends (pun intended). That’s why the Miller’s Money Forever team published The Financial Advisor Guide, a timely, independent special report that shows you how to pick the best advisor for your unique needs. Click here to learn more about The Financial Advisor Guide and how to access your copy today.

The article Mastering the Art of Financial Backtalk was originally published at millersmoney.com.

Casey Research Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in