Market Update: “Logic Has Been Replaced by Fear, By Panic”…”That means things like food, precious metals, firearms, farmland and other important supplies and resources that will matter when the system as we know it comes unhinged.”
January 21st, 2013
Diversification during times of uncertainty and instability means different things to different people. For most of us looking to keep our eggs in different baskets, hard asset are a primary investment vehicle. As more dollars are printed by our central bank and more debt is borrowed to cover our government’s expenditures, there’s one thing we can be sure off: prices for essential resources are going up.
As our paper currencies lose value against the things that really matter, and the political situation takes a turn for the worse through more domestic taxation and regulation, it becomes difficult to discern where we can ‘park’ our money to keep it safe.
For many preparedness-minded individuals the survival instinct kicks in and the first thing we do is stock up on the essentials which will either disappear at the first signs of emergency or rise in value as crisis grips the world. That means things like food, precious metals, firearms, farmland and other important supplies and resources that will matter when the system as we know it comes unhinged. This is a prudent strategy to be sure, and those who invested in such assets before the 2008 financial crisis have seen positive investment gains employing it – not to mention the security of knowing you have a backup should things spiral out of control.
And, while it’s prudent to plan for the worst and have direct access to physical assets and commodities, an equally important consideration is how to properly diversify the funds we hold in our money market accounts, cash savings, 401k’s or IRA retirement accounts. Millions of Americans have their life savings in these types of accounts, and most of them are depending on a stable and fair ‘free market’ to keep that money safe.
But, as Casey Research Chief Strategist Marin Katusa notes, we’re not exactly operating in a free market, or a stable environment, for that matter:
That is exactly the market we are in right now, where people are scared. Where people are selling on emotion. Where the logic has been replaced by fear, by panic.
Emotion is leading the market, and that’s where the level-headed logical buyer is going to make a fortune in the years coming by basing their investments on a fundamental 8 P’s principle – on people.