On the back of recent comments by Alan Greenspan, Dennis Miller gives his thoughts on dealing with responses from others when discussing the possibility of “unexpected” market downturns…
Alan Greenspan has popped back into the limelight and confirmed some of my worst fears (not that they needed much confirming). Here’s a recap of statements Greenspan made at the New Orleans Investment Conference:
Frankly, Greenspan’s candor surprised me, but my colleagues who attended the conference confirmed a series of reports I’d read. All this means that seniors and retirement investors, particularly those holding the majority of their wealth in US dollars, are holding one foot off a cliff. There is a better way.
Should you buy gold? That depends. A solid portfolio has 10-20% (depending on your comfort level) in core holdings for catastrophe protection. What are core holdings? Precious metals certainly fit that bill, as does farmland, certain foreign currencies, fine art, and various other tangible assets. Now is a good time to review your core holdings. If you’re adequately protected from the big, bad event, then you don’t need more.
If, on the other hand, you need to up your catastrophe protection, precious metal prices are making it an attractive time to do so. Remember, these investments are there to protect you and your family. They are the ultimate safety net, and it’s worthwhile to consider where you own these assets. Keep some of your insurance where it cannot be easily confiscated.
We live in dangerous economic times. At Miller’s Money, we’ve cautioned our readers about the possibility of a “significant market event” and the possibility of high inflation, and we’ve shared step-by-step guidance for those who are do-it-yourself money managers.
And while I encourage all investors to do a year-end portfolio audit with these concerns in mind, many financial advisors disagree over what a well-protected portfolio looks like. I often hear from income investors who’ve spoken to their advisors about high inflation concerns, only to be brushed off. Many report firing their advisors because they thought their nest egg was at great risk and the advisor refused to listen.
Don’t accept the brush-off. Whether your go-to guy is a fee-based CFP, a stockbroker, or a well-intentioned adult child, sit down and review your portfolio in depth with the worst-case scenario mindset. Ask yourself:
This is not a drill, folks. These are distinct possibilities.
It’s unfortunate when a trusted advisor brushes off your concerns as unrealistic or insignificant. Here are some typical responses you might hear:
Don’t let this sort of arrogance keep you from protecting yourself. Here’s what I’d say to those three comments respectively:
Act like a Boy Scout. There is no downside to preparing. It’s much, much easier to prepare and be wrong than to try to recover after a disaster hits—especially if you’re over age 60. There’s good reason the Boy Scout motto is, “Be prepared!”
Alan Greenspan is an insider if there ever was one. Hearing his concerns clearly expressed is cause for a complete portfolio review—sooner, not later. There’s nothing to lose and much to be gained. When Greenspan talks about high inflation and a significant market event, how much more warning do you need?
When you boil it down, it’s pretty simple. You might have to make some adjustments to protect against inflation and market exposure. The right adjustments will reduce risk and have minimal effects on your investment income. On the flip side, doing nothing may have negative, life-altering consequences.
If you’ve never done a full audit of your portfolio, the right financial advisor can pay dividends (pun intended). That’s why the Miller’s Money Forever team published The Financial Advisor Guide, a timely, independent special report that shows you how to pick the best advisor for your unique needs. Click here to learn more about The Financial Advisor Guide and how to access your copy today.