Gold, silver, and platinum look like they are bottoming out around current levels. I would have preferred them to fall another 20% first before hitting bottom, but that may not happen. If you believe in a bull market, silver and platinum will do better than gold. Even so, I hold mostly gold, plus probably some silver, and I will not switch my gold into silver or platinum. I am happy with what I own, and I am happy if gold simply does not fall.
How to build a portfolio
Suppose you have money to protect, whether it is 100,000, 1 million, 100 million, or 100 billion. Here is what I would own.
Some stocks, because over the long run shares have done better than bonds, cash, or real estate, as long as they are reasonably good companies. Defining a "reasonably good company" is an endless process. Some cash, because it lets you buy something when you spot a good deal. Some real estate, because people feel safe owning at least one house, and you get to live in the house you want. You do not have to buy a house. We do not live under socialism or communism where the government tells you where to live, so you can choose.
For stocks, you can buy an index fund, pick 10 or 20 good companies as a basket, or buy just a single stock. Everyone decides for themselves.
Own precious metals, and keep buying them
Own some precious metals instead of holding only dollar cash. I prefer metals because governments cannot print them. Metals can still come under pressure: when people need cash, they sell metals to raise it. Even so, everyone should buy some precious metals, and do it steadily, month after month for their whole life, not once. Do not put all your money into metals. Out of every 100, I would put about 25 into precious metals.
Buying consistently matters more than trying to time every dip perfectly. Big institutions know that a cash crunch causes short, temporary price drops, and they treat those drops as chances to buy more rather than signals to sell. For long-term savers, steady ownership beats trying to nail the perfect moment.
What I look for in stocks
I do not only buy what I think will rise most. I want a mix. I like companies that pay a steady dividend, say 7%, and can grow a little each year, around 3 to 4%. That dividend yield is enough for me. I have modest ambitions.
Mining stocks are for people with bigger ambitions. They are more volatile. They can boost your gains, but they also make emotional mistakes worse when prices swing hard.
The average person is getting squeezed
If the stock market has already peaked, the average person is largely in trouble and will face real hardship. Governments today, especially in the US, favor the super rich, meaning the people who own assets. When you print money, throughout all of history and in every society, poor and middle-class people lose out while wealth piles up into the hands of a few. Rising inequality here looks intended, not an accident.
The rally is narrow, not broad
Only about 20 to 50 people control huge companies and hold enormous influence. Power is very centralized, and the stock market shows the same thing. This is not a broad rally. It is a rally in maybe 50 US stocks, two stocks in South Korea, three in Taiwan, and so on. Speculators crowd into Nvidia, Tesla, and Micron.
That creates an opening: buy what is neglected. The broad market, especially emerging markets, holds many cheap stocks. "Cheap" is relative, though. Compared to the most expensive names they look cheap, but on their own they are not that cheap. A stock yielding 7% in dividends is cheap next to a bond yielding 2%. And some bonds are cheap next to stocks, for example the US 10-year Treasury yielding over 5% looks reasonable compared to paying up for Nvidia or Micron. For this reason, active fund managers will do better than index funds.
Bond yields and rates
Yields may go higher, and in the long run I think they will, because they never rose enough and the Fed kept interest rates artificially low. For the next few months, though, bonds could outperform stocks.
What a "lost decade" really means
I find it hard to define a lost decade. As a stock investor, I could call Japan a lost country for three decades after the Nikkei peaked in 1989, because the market never set a new high. But the bond market rallied. I visited Japan every year and never once felt the economy was in a disastrous state. Japan was always clean, everything ran on time, and both the service and manufacturing sectors were close to perfect. It never looked like a country in recession, yet people still call it a lost decade.
I live in Thailand, and people call it a failed state. I disagree. The country works reasonably well precisely because the government does little and mostly stays out of the economy. It is a pleasant place to live. People's well-being does not depend on the stock market hitting new highs. A market that keeps rising is little comfort if you fear getting knocked down by some crazy person every time you step outside.
Why people pay so much for stability
Why do people pay high prices for property in Singapore and Hong Kong? Two reasons. First, great infrastructure. Second, safety. Across most of Asia, including Singapore, Hong Kong, and Thailand, you can walk around alone at 4 in the morning, drunk, and no one will rob you. It could happen, maybe one case in a million, but usually it will not. Doing the same in Chicago, Baltimore, or San Francisco may be dangerous. I do not live there, but that is what I am told and what I read; the papers are full of such incidents.
The US does not "help"
I laugh when I hear the US is helping someone. Ask when in history the US has ever truly helped another country. Everything it did in foreign policy aimed at its own goals. On the reported plan for the US to help Japan stabilize the yen, the likely real motive is protecting the US bond market and worrying about how many bonds Japan holds. Governments rarely step into currency markets without a bigger strategic interest behind the scenes. Currency stabilization is often about protecting sovereign debt markets and funding conditions.
Every US intervention was about gaining an advantage, whether the first or second world war, the Swiss crisis, or the wars in Iraq and Afghanistan. They were not there to help.
If I had to live in a country controlled by China, Russia, or the US, I would pick the US, because it is so disorganized that controlling you would be quite hard. They might try, but it would likely prove difficult.
Markets react to incentives, not speeches. Separating political messaging from financial incentives helps you see where capital is actually moving before official statements admit it.
