Sage advice for the little guy (or gal) about protecting and growing wealth
By Craig R. Smith
Apr 25, 2005
"Hope deferred makes the heart sick." –Proverbs 13:12
Most investment opportunities today are skewed toward "big" investors on Wall Street it seems, but here are some smart options for those who want big money results with little money to start.
Given the ups and downs of the economy and markets so far in the 21st century, smaller investors often ask me; "What can the little guy do to protect and grow wealth? … “Stick it in the bank? Buy a ‘sure thing’ stock? Buy Euros? Buy Precious Metals?”
All may be valid choices, but which one offers the average guy (or gal) the most safety and profit potential, the perfect combination to today’s uncertain financial environment.
The key is to follow the lead of a few smart, value-based investors such as Warren Buffett, who is often referred to as the "Sage of Omaha".
Mr. Buffett has made two very smart financial moves in the 21st century; 1) Hedging the dollar's 40% decline, and 2) Sinking over $1.2 Billion into tangible assets like silver and gold.
Smaller investors should follow Warren’s lead, quietly moving into silver and gold just like Mr. Buffett has done, for the long haul, just on a smaller scale.
A tangible asset diversification strategy will likely keep your assets safe from market shocks, but don’t expect a shortcut to wealth, as many investors have come to expect.
In a recent WND Commentary ("Bull Market in Stuff, Not Stocks") I stated; Tangible "stuff" is where the big money is moving and that means we are still in the early stages of a bull market that could last another decade.
The next key is buying the right “stuff”; (read: tangibles) and then to be patient. However, if you put your money in the wrong “stuff” (read: stocks only), being patient may not help, but instead it could stunt your growth potential.
Keep in mind that century-to-date the Dow is still down... -5% between 2000-2004 and another -6% ytd in 2005. The tech-laden Nasdaq is worse… -45% between 2000-2004 and another -10% ytd in 2005.
Meanwhile, a United States $20 Gold Liberty coin (Mint–State 63) was $600 back in 2001, but today it’s cresting $1,000! That's 60% growth in four years, a 15% per year net growth for an investment that required no maintenance, no management and no worry.
In April 2004, I proclaimed "HURRAY FOR THE LITTLE GUY" in a Special Report on the amazing growth of Gem Quality (Mint-State 65) Morgan Silver Dollars. Today these little gems are up well over 72% … and retail prices still start under $70!
I think the bull market in precious metals has only just begun and now a growing number of market analysts agree. While all investments have risk, and past performance is no guarantee of future performance, conservative estimates are that both gold and silver could exceed the previous market highs of $850/oz. and $50/oz respectively.
But, before you invest in anything please answer these Four Simple Questions:
1) How long do you plan to hold your investment?
2) What level of return do you hope to achieve?
3) What degree of risk are prepared to accept?
4) What type of liquidity to you need to have?
Based on your personal choices you should adjust your own investment strategy.
Unrealistic expectations still rule on Wall Street today; Don't let them rule on your street. In today's short-term investment world, very few investors are thinking beyond a year… or two. In contrast, previous generations of investors thought in terms of a generation… or two... or three!
Financial prudence always pays dividends to long-term investors – “big or small.”
Read more about my investment strategy in my latest magazine, Economic Solutions in the 21st Century.
SwissAmerica.com search -- 26 stories about Warren Buffett
DISCLAIMER: All of the provided information is believed to be accurate, however errors are possible. The opinions in the Commentary section do not necessarily reflect the opinions of Swiss America. Past performance of any investment is no guarantee of future performance. All investments have risk.