Know When to Hold ’em, Know When to Fold ’em

Know when to walk away, and for certain you better know when to run!  Poker is gambling and so is investing in paper assets; like stocks, bonds, mutual funds, and ETFs. As much research as I do on these types of products, I am still subject to uncertainties with the political environment, attacks on the innocent, and the emotions of the human spirit that can dramatically change my expected return.

My research experience involves digging deep into different investment strategies, run by extremely smart people, who are looking for a better mousetrap to capture returns. I track many types of money managers and none of them have the “perfect” strategy to avoid unforeseen market downturns.

Son, I’ve made a life
Out of readin’ people’s faces
Knowin’ what the cards were
By the way they held their eyes”

We must accept that fact that there will always be things out of our control when we invest in the capital markets or “paper” assets. Let’s worry about what we can control.

For a taste of your whiskey
I’ll give you some advice”

One, often overlooked, investment type by people are hard assets.  Assets that you can physically store or touch.  I am talking about real estate, oil, precious metals, agriculture and even a business. When I talk about your portfolio, I am also talking about these hard assets that grow in value over time and produce an income stream or a dividend.  I am not talking about your home or your car, for example, but something separate from those basic needs. Something that you actively research and make a choice to invest.

There is a lot of talk right now that the market has hit, or is approaching, a high. Meaning that we may soon begin to see negative returns from stocks, equity mutual funds, and equity ETFs. One way to protect your portfolio from normal equity cycles like these is to assign a portion of your investments to hard assets.  Many say these types of investments are for the rich but they aren’t!  You too can start to learn about which one is right for you and you can start small. 

“Every gambler knows
That the secret to survivin’
Is knowin’ what to throw away
And knowin’ what to keep”

The moral is, expect the unexpected, and position yourself so that all you have isn’t vulnerable to some of the most unpredictable circumstances out there. There are ETFs and mutual funds that hold real estate or commodities, but I am not talking about those because they will invest in stocks of companies within those sectors. Call your broker and tax advisor and understand how to invest in a hard asset, how much money it will take to get started, and of course ask about all FEES related to such a transaction (ask about investing within your IRA).  Give yourself time to research and only invest if you understand everything about it. Researching and asking questions will give you an indication of when it is the right time to make your initial investment. To really build wealth, hard assets are essential to your portfolio. You can do it, but you must be willing to educate yourself. Some places to start:

·         Charles Schwab article about gold  

·         Bankrate article about other precious metals 

·         Real Estate Guys Radio


Keep learning, knowledge is key! For your enjoyment, you can hear Kenny Rogers, “The Gambler” here. 😊

1978 The Gambler – Kenny Rogers Songwriters: DON SCHLITZ
© Sony/ATV Music Publishing LLC
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