The problem with most people is not making money, but keeping it. Even those that save their incomes diligently find that capital preservation, let alone capital appreciation, is getting much harder these days.
The old mantra of money management, namely investing in a diversified portfolio of stocks for the long run, simply hasn’t worked the past decade. What financial advisors won’t tell you is that there are downward cycles in stocks that last decades. If you take the advice of financial advisors and invest for the long run during one of these downward cyles, your retirement hopes will disappear.
That being said, my current investing plan consists of investing in commodities, including gold and silver. While most assets are deflating in value, commodities have appreciated quite considerably in the past decade. With strong and growing demand globally for raw materials, this trend seems to be firmly intact.
I am still avoiding real estate like the plague, although I do think opportunities will open up in the next few years. In order to capture the coming opportunities in real estate, I am trying to build up a considerable cash reserve. Cash is certainly king when there is a high level of distressed selling, which is what I foresee in the years ahead.
I strongly believe that those who follow conventional investing wisdom will suffer dearly in the next decade or two. It is time for intelligent individuals to take control of their financial futures, since Social Security certainly won’t be there for many of us to retire on. I continue to add to my education daily so that I can make prudent decisions in the turbulent times that are ahead.
