As you probably know by now I’m very worried about the growing American Government bubble and I believe that investing in dividend paying companies in countries with a trade surplus is the safest way to put money in the stock market.
But the stock market isn’t the only place to invest. If you want to ensure your money retains it value or grows, there are a few other investments mentioned in The Real Crash that should do the trick.
The experts say that a good diversified portfolio includes 10% precious metals. I tend to agree, although I’m willing to go up to 20% of my assets and I want to hold at least half of it physically.
I’ve already written about junk silver which is my favorite form of precious metals. It’s easy to identify real junk silver (any dime, quarter or half dollar made before 1964) and they could very well become the default barter currency in the event of a true collapse of the dollar.
While silver has the inherent value of being a “precious metal”, it also has applications nano technology and super computing because it conducts electricity better than any other metal. I highly recommend having some junk silver stored safely in your home.
If you prefer gold, that’s another good way to invest in precious metals. Some people think the price of gold is inflated, but I contend that the reason the price keeps going up is because the Federal Reserve keeps printing money. I think the Fed will keep printing money, so I think gold will keep going up against the dollar.
Precious metals are a great way to diversify your portfolio and protect against an American Government bubble.
Another way to prevent your money from losing value is to get out of the dollar and into a more stable currency. Even when we aren’t in a great recession I don’t trust the Federal Reserve to maintain the value of the dollar. The Federal Reserve is a private bank that makes money by printing dollars and lending them to the federal government.
When a private, profit-seeking company increases their profits by devaluing the value of everyone else’s money, it makes the dollar incredibly risky.
Unfortunately a central bank isn’t unique to America. All currencies in the world are fiat currencies (meaning they are not backed by any physical assets). The key to picking a currency is to make sure that the country has a history of keeping inflation low and that the country exports more than they import.
Some currencies I like are the Australian Dollar and the Swiss Franc. I don’t like the American Dollar or the Euro.
I honestly haven’t invested in any foreign currency yet, but I do know that you can invest in currencies through the stock market with companies like Currency Shares. If you know a better way to invest in foreign currencies please leave a comment and let us know.
What’s The Worst That Could Happen?
Overall I recommend at least 50% of your portfolio be invested in a combination of dividend paying stocks in countries with trade surpluses, precious metals and foreign currencies. And my question is: “What’s the worst that could happen?”
If there is an American government bubble and it bursts, these investments might not skyrocket, but they should definitely do better than American dollars and American stocks.
However, if there is no American government bubble or if it doesn’t burst in our lifetime then you’re probably still alright. Your international investments could very well outperform American investments.
Readers: Is your investment portfolio diversified enough to overcome hyperinflation of a particular currency or government default of some country?