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| By Nilus Mattive |
Next month marks my 49th birthday and the 20th anniversary of my very first day working with Dr. Martin Weiss.
If there’s one thing I’ve learned so far, here it is:
No matter how much you earn, you need to save what you can and plow it into real assets.
That’s the only way to build true, lasting wealth.
I think this single difference is the line separating the so-called K-shaped economy right now.
The people who own real estate, stocks, precious metals and other assets are growing richer and richer.
Everyone else is struggling to stay above water and might end up entirely dependent on threadbare social safety nets.
That is especially true given AI’s devastating implications for millions of Americans.
And I’m not alone in sounding that alarm.
People like Larry Fink — the CEO of BlackRock — are also saying people need to invest now or plan on getting pushed aside as AI takes over.
Indeed, even among Silicon Valley entrepreneurs, there’s a feeling that this might be the last window for securing generational wealth before everything goes to pot.
As the Wall Street Journal explains it,
“The argument is that tech companies (and their leaders) will become a class unto their own with infinite wealth. No one else will have the means to generate money for themselves because AI will have taken their jobs and opportunities.
“In other words, the bridge is about to be raised for those chasing the American dream. And everyone is worried about being left on the wrong side.”
The article goes on to cite one tech entrepreneur who says, “You need to make money now, before you become a part of the permanent underclass.”
It points to assets like art and housing as being especially valuable in such a future world, too.
This aligns with what I’ve been telling you consistently and repeatedly.
Tangible assets, real assets, scarce assets absolutely belong in every person’s portfolio even if Wall Street advisors continue to push the same old mix of just stocks and bonds.
We’ve already seen a massive loss of purchasing power in every single dollar we earn and save no matter what timeframe you choose to look at.
It is highly likely that trend will only accelerate from here.
So, yes, stocks continue to play a crucial role in any balanced portfolio.
However, at current prices, I think the broad market and other risk-on assets remain far too expensive given today’s environment.
In contrast, an asset like gold has proven its worth as a hedge against inflation and government debt for thousands of years.
It’s hard to see how it doesn’t continue outperforming over the next several years.
This is a broad overview, of course.
But as I recently told members of Safe Money Report, this is the most likely chain of events as I see happening from here …
- Stocks fall as investors are forced to reevaluate their lofty expectations against rising inflation and slowing economic conditions.
- Corporate bonds, especially junk, also sell off as the so-called private credit market craters. [Editor’s note: Nilus wrote about this problem in greater detail two weeks ago. You can read that here.]
- Gold, crypto and other contra-dollar assets might fall in the short term as well depending on exactly what triggers are in place. But I personally believe crypto is more at risk than metals.
- As this plays out, longer-term Treasuries begin to rally sharply.
- The Fed, no matter what it does (or doesn’t do) over the next couple of months, must eventually cut rates aggressively as it always does.
- Gold climbs higher still.
- The stock market finally becomes a place where true bargains are available all over the place.
- Bitcoin and Ethereum might also present major buying opportunities.
- And around this time, it might finally be time to exit U.S. Treasuries once and for all.
Our Safe Money model portfolio is already positioned for everything I’ve just described.
Better yet, it can keep performing very well even if the worst doesn’t come to pass.
If you haven’t yet taken similar protective steps in your own portfolio, it’s not too late.
But do it immediately. Get your money positioned for maximum safety and true diversification.
Save as much as you can and put as much of that money into real assets as best you can.
The risks are clear as day even if most people continue to bury their heads in the sand.
Best wishes,
Nilus Mattive
