“To drift is to be in hell, to be in heaven is to rule.” –Jorge
bernard shaw
Train the Director of National Security,
Tom Ridge has said that it is not a question of “if”
we will have another terrorist attack, but when.
Like the 9/11 attack, the financial effects of
another terrorist attack will be felt by almost
everyone who lives in the United States. If you
have been carried away by a false sense of complacency
because we haven’t been attacked yet, think for a moment
moment about what he could lose if a major attack
It happened in the not too distant future.
After September 11, 2001, major economic changes
It happened, and that was a relatively minor event.
If a nuclear or dirty bomb exploded in New York
City, the economic “fall” would be much, much
greater than. Fortunately, there are simple and effective methods.
ways to “terror proof” your savings if you know
to do.
After the events of September 11, I felt a
I need to rethink how I allocated my own
investments. As a Certified Financial Planner and
investment educator, I also had many students who
they were concerned about protecting their wallet. Yo
I searched for books that might be of help, but
i couldn’t find one that was useful and reasonably
priced. Therefore, I decided to write my own. With
with the help of my co-author Jonathan Robinson,
wrote “Terror proof your mind and your money: Believe
Physical, Financial and Mental Security in
dangerous times.”
In the book, we discuss many
practical ways to easily get the “terror” out of
terrorism by alleviating one’s anxiety, ensuring
the home and the protection of financial assets.
Although I can’t discuss all the suggestions
outlined in our book in a short article like this one, I can
provide you with many helpful guidelines for protecting
their assets in the event of another tragedy. When
the moment of another attack occurs, if your
investments are in the right places, you
weather the coming storm well. However, if your
assets are poorly positioned, you could face the
financial (as well as emotional) development prospects
devastation.
house of cards
if you look honestly
in our current economic climate, you can see there
there are many vulnerabilities. In the case of a large
terrorist attack on the US, our economy could
fall like a “house of cards”. Consider the
following:
1. The stock market, especially the technological one
Stocks like Google, Yahoo, and EBay are trading at
valuations higher than technology stock prices during
the dot.com bubble in the late 1990s. Many
commenters are even calling early 2005
market an “eco bubble”.
2. The 10-year benchmark
The Treasury bond is yielding less than 5% in a world
who has promised higher interest rates for
Federal Reserve Chairman Alan Greenspan. (Higher
interest rates will make the value of your long
term bonds to automatically decrease in value).
3. The
housing market is certainly too expensive in both
coasts, and is probably unsustainable in the
middle of the country too. Home sales started
to slow down in light of higher mortgage rates,
outrageous prices, too much speculation and buyer
exhaustion. If the current owners cannot borrow
more money of your increasingly valuable
residence, will they continue to spend at the mall? He
has been largely borrowed money from housing
that has helped consumers buy in the last three years… and
without it, the US could easily fall into a
recession, causing even more problems.
4. The
value of the dollar–as seen by the rest of the
world as a part of the shares in the USA Inc.–has been
falling for almost three years. Do you think he
the world will continue to put in $500-600 billion
dollars of your savings in our economy
every year? If foreigners decide not to send their
money to us, our interest rates will increase even
faster than the promised “gradualism” promised by
Mr Greenspan. Most Americans don’t really care
on the value of the dollar in world markets,
but I assure you that if the dollar becomes something
of “American Peso”, we will all quickly learn how to
a weak dollar can hurt. For example, we have to
buy oil in dollars, and if the dollars are not worth
anything, how can we afford to fill the tank with
our nice new SUV?
5. And finally, the rate of
inflation (classically defined as too much
increase in the amount of money in circulation)
is increasing. And if that kind of inflation
(monetary) is increasing, then price inflation will not
be far behind A repeat of price inflation
be essentially a repetition of the completely problematic
1970
Yes, there is certainly good news.
on the investment front, but overvalued markets
are inherently risky in any type of era, and
act very badly in a state of panic, terrified
financial markets. An act of terrorism would be
exaggerate the problems in all these markets.
ASSET ALLOCATION
I have been teaching investment workshops since 1979. In 1999 and early
2000 I couldn’t make my adult students care about ridiculous actions
prices. All of my so-called intelligent adult students thought, “This time is different.”
Well, live and learn. Warren Buffett, the best investor of our age has said:
“Investing knowledge is cumulative.”
mr buffett
apparently he has found out that the US stock market.
not a good bet right now. He has recently made publicly
He stated that he will not buy anything in the US.
stock market, but focuses on buying
foreign currencies.
By studying what happened to
financial markets after the attack of 9/11,
learned that investors who had diversified money
in various asset allocations it did quite well. So
if history is a lesson, you’ll probably get it right
in the event of a future attack if you invest
“relatively” equal percentages of your investment
money in stock categories, short term
bonds, cash, commercial real estate and
raw materials (including gold and silver). Ounce
you have moved your money to these different assets
classes, the next thing to focus on is getting started
selecting specific or individual mutual funds
stocks that you think will perform well in
types of turbulent markets. For example, in a
increasingly dangerous world, some “safety”
stocks would probably be good investments (if other
value considerations are present.) Such a classic
defense actions as have been done by Boeing and Lockheed
well since 9/11. Of course, I’m not your financier.
adviser and this is not the forum to promote
no company in particular, so I am not recommending
anything without knowing more about you. Quite,
my goal here is to get you to look at the assignment
of assets: the large areas in which your assets are invested
in.
In addition to detailing how certain industries
did after 9/11, I devote significant attention to
our book to encourage investors to include
precious metals in their portfolios. gold and
silver have protected investors for centuries of
bad financial management, bad governments,
inflation and, of course, war. is not a
coincidence that the Golden Rule is frequently
misquoted as “Those with the golden rule”. Is
It is also worth remembering that all “fiat” currencies
(paper declared as money by some authority
without being exchangeable for something else)
they have eventually become “collectibles”. Confederate
money, French allowances, Iraqi dinars, etc. have
everything turns into confetti. Compare that history with
the fact that each gold or silver coin
ever made still has value. you should think about
placing a percentage of your money in gold and
money if you want to make your portfolio
terror proof.
Your preparation does not have to be
perfect. As George Patton said, “A good plan today
is better than a perfect plan tomorrow.” No one is
He is born knowing how to invest. smart investors
develop their experience by reading about what
others did with their money, and reaching a
appropriate plan based on all the information you
can pick up Remember, traditional Wall Street
TV brokers and financial analysts rarely (if ever)
bring up the subject of your horror test
savings. Therefore, apart from the book that
co-author of this topic, you are more or less in
own when considering the likely implications
of a terrorist attack on your financial health. Do
your decisions carefully.
For most people, the
worst scars from a future terrorist attack
be physical. They will be emotional and financial.
If you are caught off guard, your future
financial plans (and those of your loved ones)
could be delayed for a significant period of time or destroyed
total. That would be adding a tragedy in
on top of another It’s time to pay attention to your
where is your money and take appropriate action
action… before it’s too late.