Firstly I'll start out by saying I'm an absolute novice concerning mining equities. I have about half the money I want invested in mining equities. I'm thinking no matter how undervalued the shares are at the moment, there's a monumental Earth shattering general stock market crash imminent that will at least temporarily smash all markets. Basically convinced this will happen, I'm finding it hard to keep the money on the side waiting for this event while some quality stocks are so undervalued. Do you people think it best to have a toe in but also be ready to take advantage of the crash when it comes?
Watching that doco on the 1929 wall street crash and the great depression just reiterated that during a crash there's only one thing people want...and its not gold or silver...it's cash. Leveraged investors whom had 10% down recieved margin calls once their stocks had devalued below the initial 10%. Rather than giving up and cutting their losses, they did what they could to hold onto their stocks... selling whatever they could, cheap...anything to bring in some cash And it was those holding the cash could set their own price and call the shots.
Why would the market crash????????? The money would have to run somewhere.... European bonds......not likely. U.S. muni bonds........no freakin way. The Euro or Yen.........only if your crazy U.S. bonds.........not with interest rates about to turn only 2 games in town now.....the mighty U.S. dollar and the stockmarket.....this is where a lot of money is heading to escape the above mentioned as they are the less risky. ( Not to be confused with the best investment ) You will be waiting a long time for the crash you are concerned about....remember 20% corrections are normal.....but for the mega collapse, there must be something better which can return a dividend.....
yep thats what I believe it will be quite a few years yet before the music stops playing. PM's will stay flat and shares will perform well in that time that QE is in place. THe good thing about shares vs PM's in this climate shares also pay dividends, so you dont need to rely just on the investement to increase to make some money.
I like the idea of Harry Browne's Permanent Portfolio http://en.wikipedia.org/wiki/Fail-Safe_Investing
The long dated U.S. bonds are going to get mega smashed as the interest rates turn and rise faster than most will be expecting.....you can forget about that 25%.....we are just seeing a precursor to this if you look over the last few months what happened to the 10 and 30 year notes....not pretty.....best give that 25% to me.....
I'm hearing what you are saying, but my parents were British, Greek speaking Cypriots and I shared a few hours last week with the Cypriot community and heard actual stories of lost savings and superannuation from many of the Cypriots visiting. So yes, cash will be king when the SHTF but if it is held in the institutions, the bail-ins will get a lot of it and what you need to leverage quickly will only be available in dribs and drabs. So my question and quandary is, do we stack cash as well as PMs or only enough cash to sustain us for a couple of months and the rest in PMs and other assets of choice?
As for this SHTF scenario, I am skeptical.....there will always be a market and as such there will always be opportunity. Once the world runs out of oil and gas then we might be in a touch of strife.... Cash is always good during a deflationary episode but it depends on how much you have. In the U.S. home prices plummeted but food prices rose. If you are a multi millionaire, cash is good but if you are the man in the street where do you put your money when you are actually experiencing inflation of at least 5% ( food etc ) and banks only offer 1/2 percent on savings. Not many people today would have traded goods and services for gold and silver so it would be very difficult to determine exactly what it is going to buy. I think that it would make more sense to invest in the gold stock because you have removed your money from the banking system, you are invested in a private company ( unlike sovereign and muni bonds ). If you are really worried about the SHTF scenario you should be buying good quality land.....just like those who panicked in the 70's and bought land and guns. Similar scenario.....
Sounds pretty much the same as what Marc Faber keeps bringing up in interviews 25% stocks 25% property 25% cash 25% gold Only he stresses the cash and gold not all be in the US You just have to remember to count things like super (which is probably invested in bonds and shares) when looking at percentages
Well, I shouldn't imagine securing long dated government bonds in the current "record low" interest rate would be sensible. Harry Browne did write that quite a while ago and lets be honest here, If you'd bought in at $25oz for Silver then that would have been re-weighted (sold to bring back in the 25% range) and many people would have realised gains at $40 odd. Just saying Noite - I do not follow this, nor am I one to be giving financial advice. I'm just saying I like the idea of this portfolio style and it might be worth some peoples time to research into it. There are other's out there of a similar vein.
http://forums.silverstackers.com/topic-27754-how-much-cash.html It might seem like a lot but trust me, I recently needed mine and was worth more than gold (particularly as I didn't have to liquidate my PM's). Once you've got what you feel is a comfortable stack, start hoarding cash (both physical and digital).
