The best way to prepare for anything is to get ready well before any crisis or emergency situation. Rising to the occasion is not worth chancing. Instead, focus on your level of preparedness. Your Survival Guy spends much of his time focusing on risk. What is your risk tolerance? It’s usually much lower than you think. That’s why I like gold in times like these, but not too much.
In The Wall Street Journal, James Mackintosh explains the varying reactions of different assets when the S&P 500 sold off, writing:
The selloff since the S&P 500 peaked in mid-February is illustrative of what’s meant to happen, and what’s not. Treasurys did what they are supposed to do, and profited as stocks fell. The dollar didn’t, falling with stocks. Gold did both, initially dropping as stocks sold off, then rising fast.
You can see gold’s rise in my charts below:
Gold’s price is high in real terms as well:
There is some growth in the global supply of gold, but it’s slow. The market isn’t exactly being flooded with new inventory. The same is true for silver.
What Mackintosh describes above is the counterbalancing effects of a diversified portfolio. While the dollar and stocks fell, bonds and gold rose. Take a look below at the counterbalancing effects of bonds and stocks over time. In nearly all of the years the S&P 500 lost value, intermediate term Treasuries gained value.
Action Line: When you want to talk about counterbalancing in your portfolio, gold, and bonds, email me at ejsmith@yoursurvivalguy.com. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.
