Here’s What Could Destroy Retirement Funds… And What You Can Do about It
The comments below are an edited and abridged synopsis of an article by Doug Casey
The stock market is overpriced, driven up by record amounts of new money being created, record low interest rates, and trillions of corporate dollars being used to buy back stock. None of these things are sound fundamentals. Stock buyers could easily lose 50% or more and not get it back within their lifetimes.
The Fed and other central banks will try to prevent such a crash by printing more money, but it could still happen.
It’s perhaps an even bigger risk for bonds. Bonds are a triple threat to capital: Interest rates are rising, the currency they’re payable in is going down, and the risk of default by many issuers is high and rising. It’s hard to imagine a more dangerous place for money.
But value is relative, and something has to be cheap compared with other things. Commodities, commodity stocks and mining stocks are at or near their lowest levels in history. That’s the good news from a buyer’s point of view.
The bad news is that they’re unpredictable in many ways: they’re not growth businesses; they’re not investment vehicles. They’re speculative vehicles, because they’re volatile. But they’re excellent investments if your timing is right.
However, if you’re talking about preserving wealth and saving, Casey thinks that you ought to be buying the monetary metals. As always, gold and silver are the only financial assets that are not simultaneously somebody else’s liability.
They’re no longer at the giveaway prices we saw in 2001. But they’re reasonably valued right now, and we’re in the early stage of what should be a long-lasting bull market. Gold last peaked in 2011 at $1,900, and it’s going way beyond that, in Casey’s opinion.
The world is full of risks, and there aren’t a lot of intelligent alternatives. But owning physical gold and silver is one of them.
Everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.