Yesterday was a beautiful day in Palm Beach Gardens. So I held the last of my 3-part series of fireside chats on my terrace; and I’m absolutely delighted to hear that so many readers joined me online. Here’s a transcript …
Today, I will share with you what my wife, Elisabeth, and I are doing with our money. And I will give you five steps you can take, starting right now, to achieve more safety and a higher return.
But first, let me tell you about our
fears and hopes for our family’s future.
We fear a world that’s a lot less stable than today’s, a world in which the Federal Reserve’s massive money printing destroys the value of paper money.
We fear a world torn by a new cold war, or worse.
Perhaps most of all, we fear a world in which our grandchildren won’t be able to enjoy the freedoms we have enjoyed in our lifetime.
I’ve seen all this before, personally in Brazil. We don’t want to see it again in the United States.
I feel very strongly that these are dangers which money alone cannot overcome: Education must play a key role.
So with our children and grandchildren, Elisabeth and I hope that the knowledge we’ve helped give them will be enough to sustain them even in the worst of times. We have similar hopes for the graduates of The Weiss School, which we founded for gifted children 25 years ago.
Now, let me focus on the big challenge you face right now: To achieve more safety and a higher return.
First, I’ll tell you what Elisabeth and I are doing.
Elisabeth and I continue to hold a substantial portion of our personal money in short-term U.S. Treasuries. As you know, this kind of investment currently earns very little — practically nothing. Still, it’s our bedrock of safety. It’s the money that will be there for our children or grandchildren even if all else fails.
Second, we have a portfolio invested exclusively in stocks that have earned a high Weiss Stock Rating. Our latest studies show that companies with the A and B Weiss Stock Ratings greatly outperformed the S&P from 2005 through 2013, a period that includes the Great Recession. So we feel very comfortable with this portfolio. It’s working very nicely for us. And we’re going to stick with it.
Third, Elisabeth and I have bought some real estate. We didn’t catch the exact bottom. And from what Mike Larson tells us, it’s not yet time to buy a lot more. But all of the properties we own have a purpose that transcends pure investment concerns. It’s the home we live in. It’s the property where our school is located, and so on.
Fourth, we have a portfolio designed to follow the recommendations of our Money and Markets editors, always waiting to give our subscribers a chance to act before we do.
Our editors don’t always agree on everything. I certainly don’t tell them what to say or think. But for the most part, the disagreements are a matter of style and timing. Overall, we’re all on the same page.
Fifth, we are now very intrigued by certain kinds of technology investments. You know, while some older generations, ours included, have mucked up the waters for our future — especially in Washington — there are some younger folks out there, with some great ideas that merit closer attention.
The younger generation in our family has opened our eyes to that. Some graduates from our Weiss School have as well. They’re working with technology start-ups. Some of their concepts are absolutely amazing. And our new Money and Markets editor, Jon Markman, is going to help guide us.
That’s what we’re doing. Between our big allocation to cash and our allocations to these other investments, I think we get the best of both worlds — safety and return.
Now let me translate what Elisabeth and I
are doing into some steps that you can take.
Step 1. Keep a big portion of your money as safe as you possibly can. Elisabeth and I have forever used the Capital Preservation Fund, run by American Century. But there are several others that you can choose from as well.
Step 2. With the rest of your money, expand your horizons. As I’ve said in these videos, whether it’s ultimately good for the country or not, we cannot deny the reality of asset inflation. And that asset inflation can give you a tremendous amount of wind in your sails. So put some of your money in each of the sectors that are likely to benefit the most from asset inflation.
First and foremost, I think that’s going to be in natural resources, especially energy, silver and gold.
For example, I especially like Mike Larson’s most recent recommendation that gives you 8% yield with relative safety –Ferrellgas Partners LP, symbol FGP.
Second, there are also some very intriguing opportunities in select technology sectors such as leaders in Cloud Computing, Big Data and Drones.
Step 3. Within each sector, select the stocks that are of the highest possible quality. Our Money and Markets editors will help you make that selection. And in nearly all sectors, our Weiss Ratings will also point you to best of the best. You can find our ratings at www.weisswatchdog.com. Try to stick with stocks that are rated A or, at least B, especially those with solid dividends.
Step 4. Learn to make prudent investment decisions independently with our new education division.
Step 5. Stay in close touch with us. This asset inflation is going to lead to some old-fashioned price inflation and a sharp decline in the dollar. Plus, later on, the bubble is going to burst. So when we feel the time is right, we’re going to recommend some very targeted protective steps.
What we’re seeing right now in the economy and investment markets is absolutely unprecedented. The United States has never been here before. It has never witnessed what happens when more than three trillion unbacked paper dollars cascade into the economy and when, at the same time, a new cold war suddenly emerges.
So allow me to make you a solemn vow: My Money and Markets team and I are absolutely committed to doing everything possible to help you preserve your wealth and profit in these complex times.
If there’s anything we can do to better help you, please write me personally at firstname.lastname@example.org.
If you’re happy with your service, I of course would love to hear about that.
If you’re not, I need to hear that too — so we can fix the problem, or so we can give you an alternate solution. As a loyal subscriber, you are always entitled to a cost-free switch to one of our best services.
Thank you for the friendship and loyalty you’ve shown to my team and to me. Please rest assured that we will continue doing our very best to make ourselves worthy of your continued trust.
Good luck and God bless!
Editor’s Note: Martin’s Earlier Fireside Chats
My Big Picture View of the Future
The medium- and long-term consequences of the Fed’s money printing and a new Cold War. The big mistake I’ve made. The new opportunities and old dangers we all face as investors and as citizens. (Transcript)
What My Team and I Are Doing
New ways to empower investors to make profitable — and prudent — decisions independently. New tools that you can use to select the highest quality investments in every sector. (Transcript)
by Douglas Davenport
Russia is the world’s largest producer of palladium, a key component of exhaust filters that keep our cars running cleanly.
Some investors are betting that fears about the potential interruption of Russian palladium shipments will keep prices high in the $3.2-billion futures market if the dispute over Ukraine drags on.
by Jon Markman
Since I contributed my first article as Money and Markets’ technology stock specialist in February, readers have asked me hundreds of questions in emails and on our blog.
And for good reason: After trouncing the averages in 2013, the average technology stock is beating the average S&P 500 stock by a whopping six to one this year.
by Bill Hall
Like it or not, the Federal Reserve has become a proactive player in our economic system. Whether it is through direct purchases of government securities (which can easily be resumed at some future date) or some other form of direct or indirect stimulus: This is truly the new normal.
Polar Vortex Recession Deserves the Cold-Shoulder Treatment
Corporate CEOs may be most responsible for this weather-related blame game. During fourth-quarter reporting season, hundreds of chief executives from across the country cited bad wintery weather as an excuse for poor sales or profit results. According to data compiled by Bloomberg, the word “weather” was mentioned 322 times this year in CEO comments about the economy through March 14. That was more than four times the number of citations made during the same period last year.
Are you ready? We’re once again on the doorstep of another round of company earnings reports as we wind down the first quarter, one I see as crucial for divining what the market can do in 2014.
Get Prepared as Interest Rates Surge on Fed Signals
Eurodollar futures track market expectations about the future level of short-term rates. Plunging prices signal that investors are radically re-pricing both the magnitude and timing of future short-term rate hikes. They’re clearly coming around to the view I have been stressing repeatedly: The Fed will be forced to raise rates sooner, and by a larger magnitude, than anyone thought a few short quarters ago.