How to Terror-Proof Your Money
"To drift is to be in hell, to be in heaven is to steer." -GeorgeBernard Shaw
Former Homeland Security Director,Tom Ridge, has said it's not a matter of "if"we'll have another terrorist attack, but when.Like the attack of 9/11, the financial effects ofanother terror attack will be felt by almosteveryone who lives in the United States. If youhave been lulled into a false sense of complacencybecause we haven't been attacked yet, think for amoment about what you could lose if a major attackoccurred in the not too distant future. After September 11th, 2001, major economic shiftsoccurred, and that was a relatively minor event.If a nuclear or dirty bomb went off in New YorkCity, the economic "fall out" would be much, muchgreater. Fortunately, there are simple, effectiveways to "terrorproof" your savings if you knowwhat to do.
After the events of 9/11, I felt aneed to re-think how I allocated my owninvestments. As a Certified Financial Planner andinvestment educator, I also had many students thatwere concerned about protecting their portfolio. Ilooked for books that could be of help, butcouldn't find one that was useful and reasonablypriced. Therefore, I decided to write my own. Withthe help of my co-author Jonathan Robinson, wewrote "Terror-Proof Your Mind and Money: CreatePhysical, Financial and Mental Security inDangerous Times."
In the book, we discuss manypractical ways to easily take the "terror" out ofterrorism by relieving one's anxiety, securingone's home, and protecting one's financial assets.Although I can't discuss all the suggestionsoutlined in our book in a brief article such as this, I canoffer you many helpful guidelines for protectingyour assets in the event of another tragedy. Whenthe time of another attack occurs, if yourinvestments are in the right places, you'llweather the ensuing storm just fine. Yet, if yourassets are badly positioned, you could face theprospect of financial (as well as emotional)devastation.
HOUSE OF CARDS
If you honestly lookat our current economic climate, you can see thereare many vulnerabilities. In the event of a majorterrorist attack in the U.S., our economy couldfall like a "House of Cards." Consider thefollowing:
1. The stock market, especially techstocks like Google, Yahoo and EBay are trading athigher valuations than tech stock prices duringthe dot.com bubble in the late 1990's. Manycommentators are even calling the early 2005market an "echo bubble."
2. The benchmark 10 yearTreasury bond is yielding less than 5% in a worldthat has been promised higher interest rates byFederal Reserve Chairman Alan Greenspan. (Higherinterest rates will cause the value of your longterm bonds to automatically drop in value.)
3. Thehousing market is certainly overpriced on bothcoasts, and is probably unsustainable in themiddle of the country too. Home sales have begunto slow down in light of higher mortgage rates,outlandish prices, too much speculation, and buyerexhaustion. If current homeowners can't borrowmore money out of their ever increasingly valuableresidence, will they keep spending at the mall? Ithas largely been money borrowed out of housingthat has helped consumer buying the last three years...andwithout it, the U.S. could easily fall into arecession--causing even more problems.
4. Thevalue of the dollar-looked at by the rest of theworld as a share of stock in the USA Inc.-has beenfalling for almost three years. Do you think theworld will continue to put $500-600 billiondollars worth of their savings into our economyeach year? If foreigners decide not to send theirmoney to us, our interest rates will rise evenfaster than the promised "gradualism" promised byMr. Greenspan. Most Americans don't really careabout the value of the dollar in world markets,but I assure you if the dollar becomes some sortof "American Peso," we will all quickly learn howa weak dollar can hurt. For example, we have tobuy oil in dollars, and if dollars aren't worthanything, how will we afford to fill the tank ofour nice new SUV?
5. And finally, the rate ofinflation (classically defined as too much of anincrease in the amount of money in circulation),is rising. And if that kind of inflation(monetary) is rising, then price inflation won'tbe far behind. A rerun of price inflation wouldessentially be a rerun of the entirely troublesome1970's.
Yes, there is undoubtedly some good newson the investment front, but overpriced marketsare inherently risky in any kind of era, and theyperform very badly in panicky, terror strickenfinancial markets. An act of terrorism wouldexaggerate problems in all of these markets.
I have been teaching investment workshops since 1979. In 1999 and early2000 I couldn't get my adult students to be worried about ridiculous stock prices. My allegedly savvy adult students all thought, "This time it's different." Well, live and learn. Warren Buffett, the best investor of our era has said, "Investment knowledge is cumulative."Mr. Buffethas seemingly learned that the U.S. stock marketis not a good bet now. He has recently publiclystated that he's not buying anything in the U.S.stock market, but instead is focusing on buyingforeign currencies.
In studying what happened tofinancial markets after the attack of 9/11, Ilearned that investors who had money diversifiedinto various asset allocations did pretty well. Soif history is any lesson, you'll probably do finein the event of a future attack if you invest"relatively" equal percentages of your investmentmoney in the categories of stocks, short termbonds, cash, commercial real estate andcommodities (including gold and silver). Onceyou've moved your money into these different assetclasses, the next thing to focus on is to startpicking specific mutual funds or individualequities that you believe will perform well inturbulent kinds of markets. For example, in anincreasingly dangerous world, certain "security"stocks would likely be good investments (if othervalue considerations are present.) Such classicdefense stocks as Boeing and Lockeed have donewell since 9/11. Of course, I'm not your financialadvisor and this is not the forum to be toutingany particular companies, so I'm not recommendinganything without knowing more about you. Rather,my goal here is to get you to look at allocationof assets - the big areas your assets are investedin.
Besides detailing how certain industriesdid after 9/11, I devote significant attention inour book to encouraging investors to includeprecious metals in their portfolios. Gold andsilver have protected investors for centuries fromfinancial mismanagement, bad governments,inflation, and of course, war. It's not anaccident that the Golden Rule is frequentlymisquoted as "Those with the gold rule." It isalso worth remembering that all "fiat" currencies(paper declared to be money by some authoritywithout it being exchangeable into anything else)have eventually become "collectibles." Confederatemoney, French assignats, Iraqui dinars, etc. haveall become confetti. Compare that track record tothe fact that every single gold or silver coinever made still has value. You should think aboutplacing some percentage of your money in gold andsilver if you are looking to make your portfolioterror-proof.
Your preparation doesn't have to beperfect. As George Patton said, "A good plan todayis better than a perfect plan tomorrow." Nobody isborn knowing how to invest. Smart investorsdevelop their expertise by reading about whatothers did with their money, and coming up with asuitable plan based on all the information theycan collect. Remember, traditional Wall Streetbrokers and TV financial analysts rarely (if ever)bring up the subject of terror-proofing yoursavings. Therefore, other than the book Ico-authored on this subject, you're pretty much onyour own when considering the likely implicationsof a terror attack on your financial health. Makeyour decisions carefully.
For most people, theworst scars from a future terrorist attack won'tbe physical. They will be emotional and financial.If you are caught flat-footed, your futurefinancial plans (and those of your loved ones)could be delayed for a significant period of time, or destroyedaltogether. That would be adding one tragedy ontop of another. It's time to pay attention to yourwhere your money is and take appropriateaction?before it's too late.
Michael McGowan is an attorney and a certified financial planner who conducts investment workshops for attorneys and CPAs around the country. He is a former stock broker and financial columnist for the American Bar Association Journal. His new book, "Terror-Proof Your Mind and Money", isavailable from http://www.amazon.com.
His websites are http://www.terrorproof.net, http://www.goodinvestmentdecisions.com, and his blog with sound financial information is at http://www.goldfinger.blogs.com. Mike can be reached via email at firstname.lastname@example.org.
Stock market experts offer tips for investing amid high inflation San Francisco Chronicle
These money and investing tips can get your portfolio running again after September's breakdown - MarketWatch
These money and investing tips can get your portfolio running again after September's breakdown MarketWatch
ESG Investing with Carbon Credits - What Investors Need To Know CarbonCredits.com
Investing Surplus Cash During Inflation Morgan Stanley
Is the Efficient Market Hypothesis True? | Investing | U.S. News U.S News & World Report Money
Only about 30% of millennials are comfortable investing in crypto, down from about 50% in 2021: 'The shine has come off these coins' - CNBC
Only about 30% of millennials are comfortable investing in crypto, down from about 50% in 2021: 'The shine has come off these coins' CNBC
Opinion | One of the Hottest Trends in the World of Investing Is a Sham The New York Times
Book Review: Investing In The Era Of Climate Change Seeking Alpha
ESG Investing: Why investors need to add a flavour of sustainability in their portfolios - Economic Times
ESG Investing: Why investors need to add a flavour of sustainability in their portfolios Economic Times
WOW Speaker Series: Investing In Your Future Ohio Wesleyan University
The Best Stocks to Invest $1,000 in Right Now The Motley Fool
How I'd Invest $250,000 Cash In Today's Bear Market Financial Samurai
Investing in Europeâ€™s future POLITICO Europe
What should investors focus on after a rocky quarter? Itâ€™s all about earnings: Morning Brief - Yahoo Finance
What should investors focus on after a rocky quarter? Itâ€™s all about earnings: Morning Brief Yahoo Finance
MIT Sloan research on finance and investing MIT Sloan News
The Lazy Girl's Guide to Investing in the Stock Market The Everygirl
St. Louis Inno - Investing in IT The Business Journals
Where to Invest $10,000 Right Now The Motley Fool
Stock Market Today: Dow in Worst Quarterly Streak Since 2015 as Bears in Control By Investing.com - Investing.com
Stock Market Today: Dow in Worst Quarterly Streak Since 2015 as Bears in Control By Investing.com Investing.com
Investing Into Oblivion Seeking Alpha
What health system venture capital arms are investing in Becker's Hospital Review
Some millennials and Gen Zers are closing investing accounts over inflation. Here's why that may lead to regrets - CNBC
Some millennials and Gen Zers are closing investing accounts over inflation. Here's why that may lead to regrets CNBC
Where Is Venture Capital Investing In Bitcoin Companies? Bitcoin Magazine
Should Investors Be Worried That Micron Technology Saw a Slowdown in the Data Center Market? - The Motley Fool
Should Investors Be Worried That Micron Technology Saw a Slowdown in the Data Center Market? The Motley Fool
Investing in workforce hiring and onboarding technology Nationwide Newsroom
Watch Investing in Turbulent Times Bloomberg
3 Top Recommendations for New Investors The Motley Fool
Robinhood Investors Just Got Good News The Motley Fool
FACT SHEET: Biden-Harris Administration Announces American Rescue Planâ€™s Historic Investments in Community Health Workforce - The White House
FACT SHEET: Biden-Harris Administration Announces American Rescue Planâ€™s Historic Investments in Community Health Workforce The White House
Investing Action Plan: EV Sales, Made For Google, OPEC Decision Investor's Business Daily
7 Ways To Know You're Ready To Start Investing GOBankingRates
Got an Extra $250 a Month? Here's How to Turn It Into $500,000 The Motley Fool
If You Invested $10,000 in Realty Income at the Turn of the Century, This Is How Much You Would Have Today - The Motley Fool
If You Invested $10,000 in Realty Income at the Turn of the Century, This Is How Much You Would Have Today The Motley Fool
Two Dividend Hikes Today Worth Noting By Investing.com Investing.com
Investing in Crypto Asset Startups: Regulatory Considerations in an Ever-Evolving Market, The Review of Securities & Commodities Regulation - Morgan Lewis
Investing in Crypto Asset Startups: Regulatory Considerations in an Ever-Evolving Market, The Review of Securities & Commodities Regulation Morgan Lewis
If You Invested $1,000 in Tilray Brands 2020, This Is How Much You Would Have Today - The Motley Fool
LeBron James Among NBA Stars Investing in Major League Pickleball Sports Illustrated
The Week in Impact Investing: Reality Check ImpactAlpha
Investing in Codi Andreessen Horowitz
Scaling solutions for humanitarian impact: The Humanitarian and Resilience Investing (HRI) approach - World Economic Forum
Scaling solutions for humanitarian impact: The Humanitarian and Resilience Investing (HRI) approach World Economic Forum
â€śExpertâ€ť investors believe sustainable investing is most likely to drive long-term returns - Schroders
â€śExpertâ€ť investors believe sustainable investing is most likely to drive long-term returns Schroders
PepsiCo investing $100 million in Romanian facility Food Business News
Stocks Have Not Capitulated Yet Investing.com
Confused About Investing? Here's a Great Option to Fall Back On The Motley Fool
VC Investing Continues to Decline Institutional Investor
Explainer-How a massive options trade by a JP Morgan fund can move markets By Reuters - Investing.com
Want $2,000 in Passive Income? Invest $10,000 in These 2 Monster Energy Stocks and Wait 2 Years - The Motley Fool
Want $2,000 in Passive Income? Invest $10,000 in These 2 Monster Energy Stocks and Wait 2 Years The Motley Fool
Is It Really Safe to Invest in the Stock Market Right Now? The Motley Fool
Numismatics are for Collectors, Not Investors
As a precious metals investor, you may heard much about numismatic and "semi-numismatic" coins, particularly the St. Gaudens $20 double eagle gold coin.
Gold; What Type of Gold to Buy
JewelryThe advantages are:? Gold Jewelry is the easiest of the gold to buy and has the enjoyment of being able to be worn.The disadvantages are:? Retail Jewelry is often marked up by 300% or more in the shops.
Approaches to Investing
Here is a small summary of the three major approaches to investing:1. Fundamental AnalysisTruly superior companies exist, are sometimes undervalued by markets, and can be identified by mostly financial research.
Success Trading: Some Basic Terminology for New Traders
The world of trading can get very complex because the financial markets are complex. There thousands and thousands of successful traders out there today.
The High Price of Oil
In less than four years, the price of oil has risen about 300%, or over $50 a barrel. The Light Crude Continuous Contract (of oil futures) hit an all-time high at $67.
Playing With Money - And Making More
Ready to start playing with your money? Not interested in complicated businesses or boring bank C.D.
Short Selling for Investors
Shorts. Let's see.
Creating a Financial Future - Putting Your Plan Into Action Part 1
This column has previously discussed "picturing the future that we desire", and outlining a plan to achieve it. We mentioned that the plan must include goal-setting, measurement, and implementation.
How to Use Annual Report
There are many steps in calculating the fair value of a company. However, before we even do that, it is imperative to know how a company earns its profit.
Asset Allocation: Critical to Your Investment Success
Asset allocation is a critical component of investing success. Both research and academic studies show asset allocation to be single most significant factor in determining your financial goals.
Why You Need To Buy and Sell Gold Coins (Part 6)
Pre-1933 Gold Outperforms Today's Gold Bullion..
The Dreaded Direct Question
(Please have a glass of water within reach before reading this article.)Your personal financial planning is the topic of discussion here today, but not quite yet.
Help with My Annuity
The cries are heard from the distance, "I need help with my annuities." Nothing has changed.
Which IRA Is Best For You?
An Ira is one of the greatest ways to save on taxes currently and accumulate money for the future.For individuals three types of IRA's will normally come under consideration.
Making It Second Nature
Not long ago I was laying on my son's floor throwing one of his toy balls back and forth in the air to myself and I had a strange revelation. I noticed that as I threw the ball up in the air my left arm automatically started to move to where the ball was going to come down.
Four Key Components To Building A Trading System
Need some insight on what you should really be striving for when you're building a mechanical trading system? When it comes down to it, there are really only a few criteria that are used in judging the merits of a trading system. The most obvious one is profitability - does the system work? But really, there's more to it than just that.
Trend following also called momentum trading is the simplest and safest method of stock market investing. It puts you in stocks and mutual funds that are going up and gets you out when they start down.
Quit and Retire Three Years Earlier!
For most people, there is a direct correlation between how worried they are about retirement income, and how much they can actually do about it. This is because the more worried you are, the closer you probably are to retirement, and the less time you have to do anything - like save up.
Are You An Investment Dummy Like Me?
I am good at a few things. I can certainly market well and I consult with others about how to bring more attention to their products and services on the internet for a living.
Buying Florida Investment Properties and Where Its Hot
Relaxing in Style: Florida Investment PropertiesIn Florida, relaxing in the sun and sand is a way of life. There's no better way to experience a slice of Florida living than buying your own space.
|home | site map|