Uploaded by moneycontent on Apr 7, 2011
The Four Big Threats to Your Wealth in 2011 (MoneyWeek Magazine)
UK Housing threat
UK Stock market threat
Drop the Euro before it collapses
The "bond bubble" is about to burst
The fact is we're in unchartered territory ... and it's a very dangerous and unstable situation.
Does a 40% rise in the FTSE and a 9% rebound in property prices over the last 18 months seem right to you?
The way we see it, these aren't healthy markets at all ... they're not even recovering markets ...
...these are grossly inflated markets, pumped up by desperate government intervention.
Will the UK economyh sink into deflation if the Government follows through its pledge to rein in our national debt? ...
... Or, with the Bank of England's furious attempts to keep the ball rolling, is it inflation we have to fear?
So ... what should you do?
Survival Action #1 Buy defensives and "bear market protectors"
Defensive stocks: These kinds of companies don't need economic growth to make money, because people have to spend on their products out of necessity. In short, they're specifically suited to keep your portfolio ticking over in times of upheaval ... and GROW when the market truly recovers.
Survival Action #2 Get the right dividend players into your portfolio now
But since the bust up of 2008, investors have rediscovered the appeal of dividend cheques. This is for three reasons ...
1. Dividends outperform bond yields. According to Bloomberg, by the third quarter of 2010 more U.S. stocks were paying dividends that exceed bond yields than any time in the last 15 years.
2. Dividends can't be fudged - they have to be paid with real money.
3. Dividend-payers are excellent stocks to own in times of unprecedented uncertainty.
Dividends contribute to share price stability. If the share price of a dividend-paying firm falls, it is likely to fall less sharply than a pure growth stock. That's because as the price falls, the yield tends to pick up, encouraging investors to buy back in.
Survival Action #3 Ride gold all the way to $2,230 .. or even more!
... you're talking an eye-popping gold spike to $23,450 per ounce. And during times of confusion, gold often performs better than most other assets. Consider this ... adjusted for inflation, the 1980 gold peak of $850 gives you a price of $2,230 still on the horizon today.
UK Stock market threat
Drop the Euro before it collapses
The "bond bubble" is about to burst
The fact is we're in unchartered territory ... and it's a very dangerous and unstable situation.
Does a 40% rise in the FTSE and a 9% rebound in property prices over the last 18 months seem right to you?
The way we see it, these aren't healthy markets at all ... they're not even recovering markets ...
...these are grossly inflated markets, pumped up by desperate government intervention.
Will the UK economyh sink into deflation if the Government follows through its pledge to rein in our national debt? ...
... Or, with the Bank of England's furious attempts to keep the ball rolling, is it inflation we have to fear?
So ... what should you do?
Survival Action #1 Buy defensives and "bear market protectors"
Defensive stocks: These kinds of companies don't need economic growth to make money, because people have to spend on their products out of necessity. In short, they're specifically suited to keep your portfolio ticking over in times of upheaval ... and GROW when the market truly recovers.
Survival Action #2 Get the right dividend players into your portfolio now
But since the bust up of 2008, investors have rediscovered the appeal of dividend cheques. This is for three reasons ...
1. Dividends outperform bond yields. According to Bloomberg, by the third quarter of 2010 more U.S. stocks were paying dividends that exceed bond yields than any time in the last 15 years.
2. Dividends can't be fudged - they have to be paid with real money.
3. Dividend-payers are excellent stocks to own in times of unprecedented uncertainty.
Dividends contribute to share price stability. If the share price of a dividend-paying firm falls, it is likely to fall less sharply than a pure growth stock. That's because as the price falls, the yield tends to pick up, encouraging investors to buy back in.
Survival Action #3 Ride gold all the way to $2,230 .. or even more!
... you're talking an eye-popping gold spike to $23,450 per ounce. And during times of confusion, gold often performs better than most other assets. Consider this ... adjusted for inflation, the 1980 gold peak of $850 gives you a price of $2,230 still on the horizon today.
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