Listen to the news - there's a lot to worry about.
Coronavirus, Brexit, Trade Wars....maybe real wars. Many things you can do nothing about, but there's one thing you can change.
I know you care....but you've done nothing to protect you and your family.
We live in very uncertain times. No-one can provide us with certainty, but doing nothing is not an option.
Imagine you were retiring tomorrow - what would happen? I'm won't retire for several years (I'm 52), but by the time I do, I want to make sure I've got enough money and it's invested in the right asset classes. You should do the same.
You need to do something......Now.
You want to be in control, make decisions about your future. But you're running on auto-pilot. In fact, I can tell you what you're thinking about.....
After a good run some of your shares are no longer paying dividend's, so you're thinking about switching into bonds. But hang on, there are mountains of debt out there. Negative yields are everywhere. Do you want to invest in something that loses money?
Ok, what about property?
Coronavirus has got people thinking differently about property. Living close to the office used to be important, but is that about to change? We don't know. All I would say is that with property prices being where they are, it's not a market I'd be thinking about right now. I should add that with my own house, I'm already massively exposed to the property market. You're probably the same.
Perhaps you've been lucky and cashed out of some investments before the Coronavirus struck, but do you really want all of this money sitting in your bank account - only £85,000 is protected.....
As a matter of interest, if you ever had to use this insurance....what do you think £85,000 would be worth?
What happens if we get inflation that obliterates your savings - your pension? Even worse, what happens if there's a default?
What would you live on?
Does it affect me?
You need to do something. You can't predict the future. But you canprepare - prevention is better than the cure.
The International monetary system runs on trust. Right now, that seems to be in short supply....cracks are appearing:
1) The highest gold purchases by Central Banks since 1971 - what do they know that we don't? 2) Negative interest rates 3) Mountains of debt with billions being created "out of thin air" by the Central Banks
You can paper over the cracks.....but they're still there.
Most people do nothing until it's too late....don't be one of them. Like trying to get insurance after the event. Insurance must always be bought before things happen!
What's the problem?
There are many - but let's just look at three
Problem one - Debt is out of control
Take a look at this graph. It shows the relationship between US debt, the US debt limit and Gold. As you can see, US debt (the red line) is growing exponentially. If we were to revert to the previous relationship, either the debt would have to come down or the Gold price go up. What do you think?
Problem two - Many pension funds were ALREADY in deficit BEFORE Coronavirus
Here is the Milliman 100 Pension Funding Index
Source: Milliman As you can see, we've been in deficits (the red lines) for a long time. This means the obligations to pay pensioners have exceeded pension funds ability to pay them....for a long time. Strong equity markets, quantitative easing and record low interest rates have helped these pension funds - along with the contributions they're getting from people saving for their pensions....but how long can this go on? What happens when things change? The Coronavirus could cause that first domino to topple....
Problem three - What happens if your pension fund can't afford to meet their obligations?
This would cause a lot of major headaches, but let's just touch on two:
1) What would you live on? (In the UK the state pension increased in April 2020 to £175.20 per week) 2) What legacy would you leave your family?
What should you do?
In a word - Prepare - I want you to be ready for whatever the World throws at us.
Given what you've just read, would you like to have control over at least some of your investments? Or are you happy to have it all with your financial adviser and assume they know what they're doing?
Would you still switch fromequities to debt? Perhaps you want to think about putting just some of your hard earned money into real assets?
Very few people have any exposure to gold. Are you one of them?
Let's start off with a quick history lesson… this is how gold has performed during financial crises vs the S&P 500 (the US stock market) index: