Given that we cannot rationally predict how markets or individual commodities will perform in the near term, the only rational course of action is simply to maximize time in the market with a view to the long-term. What does this mean? It simply means that rather than panicking because a billionaire hedge fund manager said World War 3 has likely already started, throwing out previous strategy to the wind, and going "all-in" on a war and recession proof portfolio, we prefer to keep calm and let the dividends flow. Going all-in on cash (or gold or oil or any other single commodity or sector) in an attempt to maximize total returns, therefore, is an irrational thing to do and over time will prove to be a fool's errand. Because if you go to cash and prices keep going up for a while, as they invariably will, and returns continue to be positive, you fall so bar behind by being in cash that you may even jeopardize your business. Going to cash under almost all circumstances is stupid because among other things when you go to cash you have to be right – right away. The markets can remain irrational longer than you can remain solvent.Īnd legendary investor Howard Marks pointed out that: In fact, even if we did have a mastery of the fundamentals and where they were headed, that would be no guarantee of profits. While we hate to disappoint our readers - and especially our members at High Yield Investor - the truth is that we are not there yet. To do so would require near complete real time omniscience of geopolitical, environmental, and biological events coupled with a mastery of behavioral economics. The factors involved are far too vast and unpredictable to be able to consistently time the market for profit. However, we in fact do not know how the market or even subsectors of the market will behave next week, next month, or even next year. If we knew with absolute certainty that the markets would continue to head south and that gold and oil would keep soaring, we would certainly hit the panic button and prepare for Armageddon. Our Approach: Keep Calm & Let The Dividends Flow Should investors hit the panic button, sell all of their stocks, hunker down, and just buy gold and oil or is there another path forward? In this article, we detail our strategy during these tumultuous times and also offer some of our top high yielding picks of the moment. For example, precious metals ( GLD) ( SLV) ( GDX) and energy ( WTI) ( GUSH) ( XOM) stocks are soaring while high-growth tech ( ARKK) and European stocks ( FDD) are crashing. He is testing us, and we are failing the test each time.įinally, he stated that the conflict in Ukraine is giving him nightmares about another world war potentially breaking out and made the connection to his nightmares in January 2020 of a global pandemic breaking out.Ĭertainly the markets are concerned about what is going on.
With each 'victory,' he is emboldened to take more.
We are in the early innings of Putin's global aspirations. Highly regarded billionaire investor Bill Ackman recently tweeted Russia's attack on Ukraine means World War 3 has 'likely already started.' He went on to write: