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During my trip to
France
to visit with associates this past weekend I heard many opinions on
investments. They centered on select investments in the emerging world,
deep value investments in the first world, very long term investments in the
first world and the preservation of wealth for later.
The first three
items required quite a bit of research and bit of common sense as well as a
little grey hair. The last item was easier for me to wrap my head
around.
When nothing
looks too appealing then the best advise is to do nothing. There is no
hard investing rule that states that you must be fully invested at all
times. As a matter of fact if you think that we are in a bear market
and there will be better opportunities to choose from at a later date then it
is paramount that you have available capital to take advantage of these
future opportunities when they do present themselves. Maybe the old
investing saying of, “sell in May and go away” makes sense right
now.
So where to park
your available investing funds while you wait? For many who feared the
US dollar last year the euro seemed like a good place. These days that
trade has become a disaster. The euro is just another fiat currency
like the dollar. The US dollar itself is looking better for now but
that is only temporary as inflation is baked into the cake with a trillion
dollar deficit and promises of more to come for many years into the future. US
bonds are at very low yields with very little chance of going lower (and some
chance of going higher which would depreciate your present low yield
bonds). This leaves precious metals, which for 5,000 years have been
trusted as money. Gold is simply THE superior form of cash.
Holding your cash in gold makes perfect sense in today’s
market. While gold also serves as a hedge against declining
currencies it also serves as cash itself.
There will be low
hanging fruit later in the future. At the conference, Rick Rule (www.gril.net)
compared cash to bullets. “If you want a close shot at one of
those fat, slow moving deer then you better have bullets. View cash as
bullets.”
So if you are searching
for a good investment and having trouble finding one right now, just
wait. Keep those funds in cash and gold for now. Don’t buy
something just because you feel you should be fully invested. If you
gut is telling you to be careful then perhaps you should listen. Gold
IS careful in this economic market. Physical gold that you hold
yourself will even improve your sleep. (They don’t sell anything
better at a pharmacy.)
Keep your powder
dry for now. You do not want to miss the easy bargains that will
present themselves in the future.
IN CONCLUSION
1. Nothing
says you have to be in the market.
2. Gold
is the superior form of cash.
3. You
must have available cash to shop for bargains when sale day arrives.
Even though times
may seem a bit down keep your chin up and remember what Auntie Mame said to
her secretary:
Live! Life's a
banquet and most poor suckers are starving to death!
Prepare your
portfolio for the bear. Then dive in and don’t let life pass you
by.
Larry Laborde
Silver
Trading Company
www.silvertrading.net
Larry lives in the occupied South with his wife Puddy
and sells precious metals at the Silver Trading Company. Larry can be
contacted at llabord@aol.com.
You can view his web site at www.silvertrading.net.
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