GFP: It is so hard to make investment decisions because the Fed and the other central banks have elimineted price discovery. And when you add in Covid there is even more reason to be lost. But I look at it this way. Cash is too dangerous to hold over the long term due to inflation and the very real danger of bank "buy-ins" then next time we have a financial crash. We have short memories but that very thing happened in Cyprus as a trial run back in the 2008-2010 crisis. Bonds are a bad investment due to collapsing yields, credit risk, abd inflation. If the Fed wasn't backstopping Treasuries, MBSs, Corporate debt, Junk bonds and Munis we'd see a collapse in almost all bond markets. Lots of the current debt would go "no bid". In the past Real Estate was always a fall back, ultra safe place to hold wealth while generating a return. But that was in more normal times. I think Real Estate is a terrible investment right now in many places, but not all. The big cities are going through a period of middle class and upper middle class flight that will last years. All those cities are getting killed financially by increased costs with a serious reduction in Tax revenues. And the mayors and governors will do what they always do...raise property taxes. Nashville wants close to a 30% tax increase in the aftermath of their terrible tornado and the BLM riots. Chicago is going to impose an increase and the governor of Illinois is pushing for a graduated income tax. (While there is a 3 week wait to hire a U-Haul Truck to leave the State.) Now certain suburban and rural areas are going to be booming thanks to all the people fleeing the cities. But as a general rule I don't want to own Real Estate right now. I prefer more liquidity. With all the bankruptcies coming, and all the foreclosures, and the higher taxes, States or Cities imposing rent holidays due to Covid....no thanks. You particular situation might make sense depending how far out of Philly you live. The closer to Philly the more risk you take.
Now with precious metals I would risk my life on the proposition that they carry the least risk of any asset class right now. The macro-trends have never before in our lifetime lined up so deeply behind the idea of Precious Metals as an investment (the miners) and as a buying power presevation tool (bullion and coins). Which is why I am comfortable having almost 60% of our net worth in precious metals (miners and coins), and that will increase to over 80% once we sell our house and commit that $400 K of equity into PMs. I am just hoping for a pullback once I have that equity cash in hand. I'd love one last generous buying opportunity.
AI
