Long Term Investments for Continued Family Wealth

Yesterday, we began telling you about our visits with our strategic advisors…that is, people who advise us about what to do with our family money.

One of them runs a fund that focuses on India. The other runs a fund in Germany. Both are looking for bargain stocks – one in the Old World. The other in the New World.

Yes, Asia is the New World now…America is part of the Old World.

And both of our strategic partners told us the same thing: it’s gotten a lot harder to find bargains.

So what do you do, we asked. “Just keep looking…” was the answer.

We were explaining the difference between investing for yourself and investing for your family. If you’re investing for yourself you usually have fixed objectives – often retirement financing. Since you know when you will need the money, you need to focus on investments that will pay off in the allowable time.

Trouble is, the trends that pay off most tend to be very long term. And very hard to time. Gold, for example, is probably going to pay off in a big way – some day. It has been in a bull market for a decade. It is hard to imagine such a powerful bull market ending in a whimper… Most likely, it will end in a Big Bang…as the price goes vertical.

We’ve been saying for a long time that the Dow and gold will probably come to the same number, sooner or later. Maybe around 3,000. Maybe 5,000.

Whatever it is, it will be a big payday for people who’ve stuck with gold. But what if you need money next year…or the year after? And what if you buy gold today and it drops 50% – as it did during the early ’70s…in the middle of a huge bull market? Bummer, right?

But if you’re investing for the family, you can take the long view. You can buy gold, bury it…and forget it. Maybe the next generation will need it.

Just don’t forget to tell someone where you buried it!


Bill Bonner
for The Daily Reckoning