“Biggest Crash in World History” hits in October – 3 ways to protect yourself
The impending default by Evergrande – the second largest real estate developer in China – continues to create nervous sentiment in global markets.
And “Rich Dad Poor Dad” author Robert Kiyosaki predicts a big crash because of this.
“HOUSE of CARDs is coming down. Real estate crash with the stock market, ”Kiyosaki tweeted last week. “China’s Evergrande Group cannot pay. Valuation of real estate falsified. Will the real estate crash spill over to the US? Yes sir.”
He also told Kitco News on Wednesday that this will be “the biggest crash in world history”.
The good news? Kiyosaki also provided some suggestions on how to prepare for the seemingly inevitable downturn.
He suggested investing in the following three assets – it might be worth dumping some of your change on them.
This is the simplest recommendation from Kiyosaki. Gold has been the safe haven for centuries.
It cannot be printed out of nowhere like fiat money, and its value is largely unaffected by economic events around the world.
Investors often rush towards gold during times of crisis, so it makes sense to stay one step ahead of the crowd.
Case in point: in the first six months of 2020 – when the stock market took a roller coaster ride due to the COVID-19 pandemic – soaring demand for the yellow metal drove its price from $ 1,509 to $ 1,772 an ounce.
The most straightforward way to play gold is to own gold bars. But that can be difficult and expensive. An easier method is to invest in large gold mining companies.
When the price of gold rises, these miners will generate higher revenues and profits, which is usually reflected in higher stock prices.
For example, companies like Barrick Gold, Newmont, and Freeport-McMoRan typically do well in difficult times for other sectors.
And these days you can create your own doomsday portfolio using just digital nickels and dime.
It’s also no surprise that Kiyosaki likes silver. Just like gold, silver can be a store of value and a hedge against rising interest rates and inflation.
The gray metal may not seem exciting, but it can be a very effective investment in times of uncertainty. In the past two years, the price of silver has increased by more than 30%.
As expected, silver miners are benefiting from rising silver prices.
Some of the easiest ways to play an impending silver boom are with great miners like Wheaton Precious Metals, Pan American Silver, and Coeur Mining.
However, silver is also widely used as an industrial metal. A downturn in global economic activity could therefore have a negative impact on silver prices.
Once considered a niche asset, Bitcoin has now entered the mainstream.
You can buy bitcoin directly. But if you don’t like this volatility, you can also invest in companies that are tied to the crypto market.
Tesla, for example, owns around 42,000 bitcoins, according to CEO Elon Musk’s Twitter account. When bitcoin moves, Tesla stocks tend to follow suit.
PayPal is another crypto game. Last October, the company launched a service in the United States that enables users to buy, sell, and hold cryptocurrencies. A similar product was launched for the UK in late August.
And then there’s Nvidia, which is known for its graphics processors. The company’s products are a must-have for serious video gamers, but they are also in high demand with cryptocurrency miners.
On its Q2 earnings call, Nvidia said it has been unable to determine how much of its $ 3 billion in gaming revenue is actually from gamers, not miners.
Of course, these stocks aren’t cheap.
Tesla is trading at $ 776 per share, PayPal at $ 263 and Nvidia at $ 205 per share.
But you can get a slice of these bitcoin games with a popular stock trading app that allows you to buy fractions of stocks with as much money as you want to spend.
The best protection?
As with any other asset, the price of gold, silver and bitcoin can still fall in a market crash.
Kiyosaki even predicted that if the stock market goes down, “it will bring everything”.
If you’re looking for an asset that has little correlation with the ups and downs of the stock market or real estate, there is another one worth considering – U.S. farmland.
Even if the next crash turns out to be the biggest in world history, people will still have to eat.
And over the years, agriculture has been shown to offer higher risk-adjusted returns than either stocks or real estate.
New platforms allow you to invest in US farmland by getting involved in a farm of your choice.
They generate cash income from the lease fees and harvest sales. And of course you also benefit from long-term appreciation.
This article is for information only and is not intended as advice. It is provided without any guarantee.