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With the S&P 500 back at an all-time high, stocks have largely shrugged off inflation and omicron concerns.
But according to rich dad poor dad By Robert Kiyosaki, danger lurks.
In an interview with Stansberry Research last week, Kiyosaki pointed out that the Eurodollar yield curve is now inverted (meaning shorter-term debt pays higher interest than longer-term debt), which historically means “what’s happening some bad things.”
“It was followed by Lehman Brothers, followed by COVID,” he said.
Granted, this isn’t the first time Kiyosaki has raised the alarm. In September, he told Kitco News that the “biggest crash in the history of the world” would happen in October.
The author has not given up on his extremely bearish stance. Kiyosaki claims we are already in a “technical depression” based on inflation and growth data.
But Kiyosaki also provided investors with three assets he was counting on to prepare for an inevitable recession. Some of these might be worth investing with your little extra cash.
Kiyosaki first bought gold in 1972, when gold was trading at $50 an ounce.
Today, the yellow metal is trading around $1,800 an ounce, and he’s still buying.
“I don’t buy gold because I like it, I buy it because I don’t trust the Fed,” the author said.
He has a little. Over 35% of existing dollars were printed in 2020. Gold, on the other hand, cannot be printed out of thin air like fiat currency. Furthermore, its value is largely unaffected by economic events around the world.
And because of the precious metal’s safe-haven status, investors often rush to it in times of crisis, making it an effective hedge.
There are many ways to play gold. You can own gold bars. You can also gain exposure through ETFs such as SPDR Gold Shares. Alternatively, you can look at gold mining companies.
When the price of gold rises, miners earn higher revenue and profits, which tends to translate into higher stock prices. Companies such as Barrick Gold, Newmont and Freeport-McMoRan typically do well during tough times in other industries.
If you don’t want to pick individual stocks, you can build a low-risk income portfolio by using your “digital five cents.”
RHJ Photos and Illustrations/Shutterstock
The grey metal may not look as exciting as gold, but given its price action, it could be a better opportunity.
“Silver has been the best, it’s still 50% below its all-time high, and they continue to use it in industry. It’s an industrial metal,” Kiyosaki said.
Like gold, silver can act as a store of value. But it’s not just a safe-haven asset.
Silver is widely used in the production of solar panels. It is also a key component of many vehicle electrical control units. Industrial demand – coupled with hedging properties – has made silver an asset class of great interest to investors.
You can buy silver coins and gold bars. Canadian dollar-denominated ETFs, like the Horizons Silver ETF, offer another way to access the metal. Of course, there are plenty of miners who are bracing themselves for a surge in silver prices.
Companies such as Pan American Silver, Wheaton Precious Metals, and First Majestic Silver should provide a good starting point for some research.
If you’ve been following Bitcoin’s price over the past few months, you know that crypto investing isn’t always smooth sailing.
After surging above $68,000 on Nov. 10, Bitcoin has retreated to around $50,000.
Still, long-term holders, including Kiyosaki, are not complaining, as the price of the world’s largest cryptocurrency is still up more than 100% over the past 12 months.
“Bitcoin going up or down? I really don’t care because my entry point is $6,000,” Kiyosaki said in the interview.
Back in October, the author tweeted that Bitcoin’s future is “very bright.”
Investors can buy Bitcoin directly. Today, many exchanges charge up to 4% commission just for buying and selling cryptocurrencies. But some investment apps charge zero commissions.
Companies that associate themselves with the crypto market offer another option to capitalize on the crypto craze.
For example, software technologist MicroStrategy has amassed nearly 122,500 bitcoins. Electric car giant Tesla holds about 43,200 bitcoins.
Then there’s the pick and shovel game like Coinbase Global, which operates the largest U.S. cryptocurrency exchange
While Kiyosaki likes gold, silver and bitcoin, he doesn’t say they’re immune to market downturns.
If you want an asset that has little to no correlation to the rise and fall of stocks or the crypto market, there is another asset you might want to consider: fine art.
Contemporary art has outperformed the S&P 500 by 174% over the past 25 years, according to the Citi Global Art Market Chart.
It’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.
On a scale of -1 to +1, where 0 represents no connection at all, Citi found that over the past 25 years, the correlation between contemporary art and the S&P 500 was only 0.12.
In the past, only the super-rich like Kiyosaki could choose people like Banksy and Andy Warhol to invest in art. But with a new investment platform, you can invest in iconic art like Jeff Bezos and Bill Gates.
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