Asset Management in a Crazy Economy

by Wes Bridel on July 23, 2010

in Stewardship

You must determine what kind of path you see being laid for the economy

You must determine what kind of path you see being laid for the economy

Asset Management is difficult in a crazy economy.  We’ve been talking about the possibilities of deflation and hyperinflation. So if difficult times are ahead, which asset classes are the ones which will best safeguard and grow what you have been giving to steward?  We don’t know!  Please understand that this blog is meant to help educate you as a first step towards better asset management.  We try to convey our best understanding of the economy and how markets react to you.  It is up to you to determine which assets are the best for you to hold depending on which environments you believe are the most likely to occur.

We’ve made it clear that we believe some measure of hyperinflation is coming to the US Dollar, but at the same time, we also concede that we might be wrong about this and that there might only be dramatic deflationary depression.  We do believe that a deflationary crash will happen soon.  But we also believe the next shoe to drop will be worse.  But what’s important for you is what you believe!  If you believe as we do (or at least want to be prepared for all circumstances), it would be wise to practice careful asset management with both of these scenarios in mind as possible outcomes.

In the next series of posts, we will be discussing different asset classes and how we believe they will respond to the environment that we foresee.  But again, you must determine what you believe is the right asset management allocation for you based on what you see happening in the markets.

For instance, if you believe that we will not see a US Dollar devaluation and will instead only see a deflationary depression, then you should hold high quality bonds.  Those would be fine in that environment, but terrible in the environment that we feel is most likely.  So read carefully as many times as you need to.  And do as much outside research as you need to to feel comfortable about your decisions.

Finally, make sure that you have a substantial mix of whole life cash value, gold, silver, and foreign currencies that provide stability so that you are not overly concerned with the performance of your risky money.  The safe money you’ve established is far more important than these risky assets.  However, there is more potential for profit in the areas we will discuss in this series of posts….along with much more risk of loss.  Therefore, make sure that you are only putting money at risk that you are comfortable risking because these will be extremely volatile times.  We won’t be giving specific recommendations here because we don’t think you should be making an investment decision based on something you read on a blog, but we will talk about many different asset classes to help you start your journey of wise asset management in a crazy economy.

We’re excited to get started tomorrow.  Please forward this blog to any friends who you think might want to know about these things.

This post is Part 1 in the series How Will Different Asset Classes Respond to this Crazy Economy?

Photo credit: Mike Carter

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