1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Anna Johansson
Anna Johansson
Articles (39) 

Invest in Metals to Protect Your Assets in a Crisis

Diversify your portfolio by investing in metals to ensure your assets will survive any economic collapse

June 13, 2017

Invest In Metals To Protect Your Assets In A Crisis

When you invest your cash in any market, there’s always the potential for loss. Smart investors know how to lessen potential risk and aren’t afraid to take small losses in the process of working toward big gains. They know small losses are part of the process.

It’s easy to plan for risk when you see it coming, but what can you do when you have absolutely no warning? Situations like natural disasters and terrorist attacks almost guarantee an abrupt hit to the market. How you manage your assets before, during and after such an incident will determine how well those assets survive.

Tragedy affects the value of your assets

After the World Trade Center attacks on Sept. 11, 2001, the markets tanked. NYSE and NASDAQ closed for seven days; when they reopened the Dow dropped 7%. Although nearly all asset classes struggled in this crisis period, gold still got the highest return.

Sometimes all it takes for the market to tank is the potential for a crisis, like what happened in 2015 when massive debt caused Greece to close its banks and the entire world feared it might be next.

Gold and silver are the best assets during a crisis

Nobody plans for a crisis, but it’s always a good idea to invest some of your cash in metals like gold and silver, just in case, because when the market crashes, you’ll have something with inherent value. It doesn’t matter if it’s not worth much in the moment of crisis – you can always wait awhile for the markets to stabilize before turning it into cash again.

Managing assets you may not think of as assets

Stocks, bonds, cash and tangible property aren’t the only assets on which your business relies. Running a business requires protecting all of your assets, including the platforms that power your business. Your financial assets depend on it.

In order to run a business in today’s world, you rely on software assets to do your taxes, run your POS, run your appointments and manage shipping and receiving. Depending on the kind of business you run, you might even depend on software to run your internal communication system and contact your customers through an email marketing system. If you don’t have a backup system in place for the data managed by these assets, when a crisis hits, you may not have any financial assets to protect.

The case for diversification

The whole point for diversifying your portfolio is to make sure that some of your assets appreciate when others decline in value. When you don’t put all your eggs in one basket, you won’t be as worried if a basket takes a fall.

Most people diversify between various stocks and bonds, but sometimes that’s not enough. Ron Carson, founder and CEO of Carson Wealth Management Group, says that stocks and bonds can decline at the same time. He recommends diversification like buying rental properties and creating other royalty streams of income.

Other financial experts suggest investing in foreign stocks since they’re a lot easier to invest in than they have been in the past.

All of these investment strategies are great, but there’s one crisis that would render them all useless: a total economic collapse. If the U.S. faces the crisis of a collapse, it doesn’t matter if your investments are in bonds, stocks or rental properties. If the dollar loses value like it did during the 10-year-long Great Depression, you could lose everything. From this perspective, even though you’ve diversified your investments, they’re still technically in the same basket.

Diversify the way you diversify assets

To avoid losing everything, you don’t need to wait for an adviser to tell you it’s a good idea to invest in silver and gold (or other valuable metals). Diversify your portfolio by investing in metals to ensure your assets will survive any economic collapse. You’ll have goods you can trade directly for food, clothing, supplies and even services.

It’s up to you to manage your assets, and smart investors know the value of investing in gold and silver as part of their overall investment plan. When crisis hits unexpectedly, you’ll have tangible assets when most people will have lost everything.

About the author:

Anna Johansson
Anna is a freelance writer, researcher, and business consultant. A columnist for Entrepreneur.com, HuffingtonPost.com and more, Anna specializes in entrepreneurship, technology, and social media trends. Follow her on Twitter and LinkedIn.

Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by Anna Johansson


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)