People are always looking for the next best investment. Touting fast and easy ways to get rich is a classic marketing scheme. And when you combine the desire to make money with fear of economic collapse you get a very intriguing and persuasive argument.
The simple problem is that these predictions don’t always work out. The reason is because:
Markets are not Easily Predicable
About a year ago the website International Man posted an article about a great investment opportunity for 2017: Uranium.
After providing an interesting anecdote, the author writes: “Now is the time to get positioned for the same kind of explosive returns we’ve seen in previous uranium bull markets.”
Well, that didn’t happen. You can check out Uranium prices here for reference.
Recently, International Man published another article saying Uranium prices could quadruple! Fool me once…
Now, the article does acknowledge the fact that the previous article’s predictions did not come to fruition. Yet, they are still recommending it. And hey, maybe it will quadruple in price, but I certainly won’t be buying.
There are a ton of these doom and gloom investments out there. I read ZeroHedge regularly and you would have thought gold would be $20,000 an ounce by now and the U.S. dollar would have completely collapsed. And ZeroHedge certainly isn’t the only website. There is a lot of money in selling gold and other doom and gloom investments–always remember that!
Doom and Gloom Investments Haven’t Paid Off…Yet
“Gold Bugs” like Peter Schiff have been saying to buy gold for many years now. Well, gold has been an absolute dud. Check out this price chart:
Meanwhile, the U.S. stock market has been soaring. Sure, it’s inflated higher than usual, but if one has been after solely profits in recent years then they’ve missed out big time!
And that is what investing is about. It’s not about being right in 20 years, it’s about being right next week, or at least the next few years. Hyperinflation, defaulting on the debt, or other major economic catastrophes in the U.S. are not likely imminent. If there is a collapse likely in 2030, it doesn’t benefit me for another 12 years to invest in gold, assuming all I am after is a huge price increase.
Currently, I do own precious metals in my portfolio. But I have no illusions about massive price increases. In fact, my silver investment has lost money in the last year or so. I’m going to buy more gold soon, but am not optimistic about price increases. Precious metals are reasonably stable and that is why I invest in them. Not because I am worried about the U.S. collapsing and trading gold coins for bread at the store.
A Better Approach to Investing
Instead of waiting for the world to collapse, instead look for long-term trends in society. For example, in the early 1990’s you could have seen the internet coming and invested in tech stocks.
A few years ago, you could have invested in Bitcoin and cryptocurrencies. I wrote an article less than a week ago when Bitcoin was $10,000–it’s already well over $15,000.
Economic collapse is not a new phenomenon you can capitalize on. Instead, a diversified portfolio with investments in assets like precious metals is a good bet. But trying to make a quick buck off societal collapse probably won’t work out well. Good luck buying a loaf of bread with your gold coins.
And if you’re not great at predicting the future, just dollar cost average into index funds. If you did that a year ago your investment would be much higher than an investment in uranium.