doomsayer n. – one given to forebodings and predictions of impending calamity
It seems like every couple of weeks I come across someone who finds out I’m a financial adviser and asks if I have all of my clients money in gold or US dollars. That, or they just outright tell me I’m mad not to.
The conversation usually goes as follows,
“Oh, you’re a financial adviser… did you know you need to have all your money in gold and US dollars?”
“And for which reason do you think gold and US dollars are the way to go?”
“(insert reason – Euro collapse, property collapse, fiat currency collapse, impending war, China, oil crisis)”
From here the conversation usually gets a little bit weird as I try to explain to the person I’m sitting with exactly what I’m about to explain to you.
Doomsayers have been around for a very, very long time. A lot of them have made a lot of money from selling nothing other than fear. Somewhere deep down in human beings is this interesting feeling that the world will at some point collapse and an apocalypse will take place. This leaves us wide open to fear and irrational behaviour and these authors/bloggers/speakers capitalise on it (and mostly believe it themselves too).
Remembering just the last few years, I’ve heard countless claims of impending doom:
Remember the Y2K bug that was going to wipe us all out and destroy life as we knew it?
What about the claims made during the dot-com boom and bust?
Remember the crazy claims made about climate change early on and how quickly the earth would perish?
Remember how the GFC was going to lead to a Worldwide Depression worse than the 1930s?
Anyone remember Harold Camping? The semi-cult leader in the US who keeps predicting the end based on some weird bible code?
What about the claims in 2012 of the end of the world due to the Mayan calendar?
Or just last year we had the blood red moons that was going to end the world?
Listen to enough of these guys and you’ll live in a bunker somewhere surrounded by a thousand cans of baked beans, all the while missing out on the life that’s right in front of you.
And from an investment perspective, through all of this, has the best investment option been gold or USD? Nope…
But what if the world really does collapse this time?
Personally I think there is trouble coming. I think history tells us trouble is coming- dot-com bust really happened, property busts have happened, the GFC really happened, so why wouldn’t it happen again? Will it be a doomsday type event? Highly, highly unlikely. Generally speaking the arguments of the doomsayers are so poor, so full of holes and so biased it’s impossible to take them seriously. One of them will eventually be right – a broken clock gets it right twice a day – but pinning your hopes of getting rich on having the right assets during a collapse is somewhat madness. Being the only rich guy in a collapsed city is a recipe for disaster and good luck finding someone to trade gold with for it’s supposed real value.
love your friends and family,
live within your means,
use your spare cash to accumulate an asset base,
spread your investments across a diverse range of assets,
ignore the doomsayers