Dear FutureMoneyTrends.com Subscriber,
Today I wanted to cover some recent questions I have received at our TrendAlerts@FutureMoneyTrends.com email.
Before I do, I wanted to let everyone know that we have a HUGE platinum and palladium stock suggestion being released to our Smart Money Members this week. If you are looking to profit off of this trend, we see a nice opportunity with the recent price drop. Remember, 90% of these metals are mined in Africa and Russia, so we have significant political risk. These two metals are critical in industry, yet so small that a major price increase would not have an effect on demand in our opinion, however current prices are so low they can’t even mine it at a profit, which is exactly why we are buyers of this trend. Current prices are unsustainable and need to go up dramatically, and when they do we want to own the most undervalued company we can find, one that we can even call safe, if such a thing can be said about any miner.
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Trend Mail Q&A
I currently have a 401k that only gives me 10 options, what should I do? I am worried about the U.S. dollar, my only options are a money market account, U.S. stocks funds, and 1 international fund.
Paul this is probably the most asked question I have received over the past 5 years. There are many answers but what it comes down to is your own personal belief level. If you believe that the dollar will absolutely collapse, then you should consider borrowing against your 401k to purchase gold, silver, or some other type of inflation related hedge. You may even want to take it further if you believe a collapse is imminent by cashing it out and paying a penalty, however I certainly don’t recommend this.
What I would personally do if I was in your situation, and I do believe the dollar is doomed, I would split your funds between whatever U.S. large cap fund you have and the foreign fund. Here is why, the U.S. large cap fund will likely have companies that are not going away, they have real value, and if the dollar does collapse, whatever new currency we use in the future will still give these great companies value. A lot of these U.S. large caps also earn a large portion of their income from outside the U.S. Take Coke for example, 70% of its revenues come from international sales. This leads to my next idea of owning the foreign fund. I hate that you can’t pick your stocks in a 401k, but at least owning a foreign fund gives you exposure to other currencies. Dealing with the limitations of the 401k is a big one and is just another reason I can’t stand these type of investment vehicles.
Well Dan, the Dow Jones is at 15,000 now and I recently heard you on a radio show calling for Dow 20,000. Is this still in the cards or are we about to see a pull back?
A pull back should always be expected, especially with this recent run we have had, but I wouldn’t expect anything more than a 5% move to the down side. Bernanke is pumping the market up because he knows that pensions, Obama, and many others are depending on the FED to keep the illusion going. So, I honestly believe that before we see a major crash, the Dow is going north of 20,000, we may even see 30,000.
Remember stocks are certificates backed by real things, so when the FED devalues the dollar, the measuring stick (dollar) used to value stocks makes them look like they are rising more rapidly than they really are. I personally am more invested in the market than I have ever been in my life, I want to profit off of Bernanke’s bubble and I also am seeking safety in boring large cap companies as well as a few junior gold miners.
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Editor in Chief, FutureMoneyTrends.com
Share Disclosure: I own Coca-Cola (KO)