Diversification is the best protection, go for gold, silver, oil and property
By: Peter Cooper
Sunday, 4 August 2013
Global stock markets look more over-extended this summer than at any time since the dot-com crash of 2000. This is either predicting a big economic recovery around the corner, or a massive mis-pricing driven by cheap money in search of yield. Critically profits are already turning lower.
Readers of ArabianMoney will know our conclusion. The momentum upwards will run out soon and all investors rushing for the exit at the same time will send stock markets into crash mode. Bonds will rally and then follow with their own crash.
The time to do something about this is now, in the depths of summer when you can tip-toe out of the backdoor and nobody will notice. But what do you do with your money then?
This website can only offer broad advice. For our more detailed and specific investment recommendations then you need to sign-up to our companion newsletter (click here).
However, diversification of asset holdings is really your best policy. The newsletter is currently hot on Dubai stocks and real estate, oil-related assets, gold and especially silver. It makes sense to buy assets that are low in price – like gold and silver – rather than those on a high like stocks.
Silver is the biggest bargain this summer. It’s incredibly cheap and recent volatility will work on the upside as well as the downside. All you need is some patience and a strong stomach for the volatility of the ride.