By Dr. Fred Goldstein
Sr. Broker, Swiss America
Oct. 23, 2008
I often tell my clients at Swiss America that if they want to make a little money, start with a lot of money and play the commodity futures.
It has been nothing short of financial suicide to play the highly leveraged futures and options markets during such volatile financial markets. Even conservative investors have seen their stock portfolios and 401k statements shrink dramatically in recent months.
I believe this is a critical time period for investors and developing a sound strategy is essential for financial well being. Although money experts are now scoffing at ‘buy and hold’ strategies, I strongly disagree.
Most investors do not have the time or tools to ‘market time’, that is know when to enter and exit markets at peaks and bottoms. Each individual must develop an investment strategy based on their age, income, family needs, philosophy, risk and current market events.
Swiss America’s philosophy is that if individuals develop a sound financial strategy -- and work their plan -- over the long term, the odds for success are in their favor.
Former speaker of the House Newt Gingrich said on “This Week” 10/18/08 he was very concerned over inflation due to the trillions of dollars being added to the system. John Williams of shadowstats.com reports inflation is much higher than presently being reported. Therefore if you agree with the Swiss America philosophy -- that investors must protect against inflation -- a great opportunity presently exists.
During the present economic crisis many great natural resource companies have seen their stock prices drop dramatically. Remember: in Chinese the word ‘crisis’ means both danger and opportunity. Right now each investor must make a choice; the glass is half-full or it is half-empty.
Although many investors have taken their lumps lately we believe present economic conditions demand action. We do not think it is possible to make up losses in a month or two. But if we are right, and the U.S. is entering a spectacular inflationary phase, the next few years could be the most profitable for astute investors.
Swiss America offers free educational resources to help savers and investors understand the benefits of owning U.S. numismatic coins. We want our clients to be confident during these uncertain economic times. Knowledge, value and timing will tilt the odds in favor of informed investors.
Do not be stressed out by the short-term fluctuations. Do not try to beat the markets by gambling short term. Set up your long-term plan and be a successful holder rather than a short-term speculator.
Ed. Note: As the chart above illustrates, gold has been the trade of the decade ever since 2001, having tripled in price. In contrast the Dow has just gone through a lost decade, unless you're a day trader with perfect timing instincts.