While the emerging market economies seem to be doing horribly, the United States economy seems to be booming. The federal reserve believes the US economy will continue to do well and they will most likely continue to raise interest rates. Consumer confidence is at record highs and the stock markets are at extremes not seen since the extremes of the dot-com bubble. Most Americans are feeling so good about the direction of the economy, so things like asset and wealth protection are not on most investors’ minds. Ted Bauman is an economist who does not share the same enthusiasm as most American’s when it comes to the current situation of the US economy. He believes now is the time for investors to think more about protecting their assets and adopting low-risk investing strategies.
— Ted Bauman Guru (@TedBaumanGuru) October 15, 2018
When people think of asset confiscation, the current situation in Greece comes to mind where people’s assets in the banks were seized. Most Americans believe this would never happen. However, as a sort of insurance policy, Ted Bauman believes that all investors should keep a small portion of their wealth outside of a bank. He advises individuals to invest in a water and fireproof lockbox and use it to store some cash and precious metals. He had written about a family member who kept much of their assets at home but failed to properly secure them. Here’s How The Bull Market Dies. Doing this will protect against a potential burglary, a natural disaster or economic disaster. He does not recommend that an individual keep all their wealth at home.
Ted Bauman feels that stocks are going to eventually revert to the mean. He does not believe investors should panic and completely leave stocks. He has pointed out that in some scenarios where there is a crash in equities, they bounce back and soar higher. Investors who rode out the famous 1987 stock market crash ended the year with a ten percent rate of return. Ted Bauman feels that a proper financial portfolio will contain bonds, as well as stocks. Bonds pay interest and can be a great residual income stream for investors.