Investment risk and the stock market, mutual funds, retirement, and the banks

Now, let’s talk about investment risk and some logical reasons why you should protect your wealth with gold. People don’t realize the risk they are taking with their investments, whether they are in the stock market, the banks, government bonds, securities, CDs, or annuities.

Stock Market: The most popular sport in America today is the stock market. Everybody is trying to get rich quick, gambling his or her life savings in what I call the Wall Street Casino. People also don’t realize this, but 98% of the wealth in this country simply doesn’t exist. It is an illusion. It is either a number on a piece of paper or a number on a computer chip. Yet, more than half of all Americans are in the stock market, gambling with utter abandon with their futures. Why do I say that? Look at the investment risk people are taking by being in the stock market.

NASDAQ: Take a look at the NASDAQ as another area of investment risk. The average NASDAQ company is 206 times earnings. What does that mean? Simply stated, it means that if a company has one million dollars in assets, and their stock is valued at $206 million, that company is 206 times earnings. It is like a game of musical chairs. There is one chair and 206 people. When the music stops there is only one winner. Look at America On-Line, (AOL). It is all air. They have absolutely no assets, but they are valued at over $100 billion. If AOL would suddenly collapse, how many people will find the chair?

Mutual funds: Not too many people are aware of the investment risk involved in mutual funds. Mutual funds contain more than half the money in the stock market , comprised mostly of 401K retirement money. During the last 10 years I have spoken with a number of mutual fund managers who told me some very interesting things about the downside risk of mutual funds. Mutual funds are required to keep seven pennies on the dollar on deposit for withdrawals. But in actuality, they only have three pennies on the dollar. They are only one penny better than the banks, which have only two pennies on the dollar on deposit for withdrawals.

Banks & FDIC: The banks are another great investment risk. As I have mentioned before, the banks in this country only have two pennies on the dollar on deposit for withdrawals. As a contrast, in 1929, right before the stock market crashed, the banks had $.21 on the dollar. And you know how many people got their money then. But today, the risk of holding money in the bank is 10 times greater than it was in 1929, because of the two pennies on the dollar. But we don’t have to worry about that because each savings account is insured for up to $100,000 by the Federal Deposit Insurance Corporation (FDIC). Right?

That whole concept is also bogus, because the Federal Reserve is neither a federal (government) institution nor do they have any reserves. The Fed is in worse shape than the banks, having only less than two pennies ($.01.6) on the dollar on deposit for withdrawals. But again, the American public is duped into believing this financial mirage, and so nobody thinks anything about it. A person has to be totally naïve to believe that the Fed will give you $100,000 if the whole banking system suddenly shuts down. Banks are a huge investment risk.

Retirement and Risk: In my business I talk to a lot of retired people who worked very hard all their lives to accumulate a little wealth. Most older people are more conservative than my generation of baby boomers, who are caught up in speculation and get-rich-quick schemes. But somehow, Wall Street’s influence has started to have a great affect on older people’s minds. With all the hype about speculation and borrowing your way to prosperity, older people have also been caught up to the idea of gambling with the wealth that has taken them a whole lifetime to accumulate. That kind of thinking is very dangerous, because in a total collapse of the system, they will have nothing to fall back on. Wall Street talks a lot about diversification as a way to protect your wealth, but people fail to see that if everything you have is dollar denominated, then you are 100% at risk.

Don't let yourself be a victim when the paper dollar collapses and customers can't get their money out of the banks

Do you have a plan to exit the system quickly or is your “money” bogged down or tied up in their system under threat of severe penalties for early withdrawal and increased tax consequences if you get out all at one time? What is your investment risk?

The Government’s system, like a giant glue trap, ensnares most people, and once most people are in it, it is almost impossible to get out. And believe me, in all my years dealing with people entrapped by the system, nine out of 10 people I talk to are so intimidated by the system and the adverse consequences of exiting it that they just sit there frozen like a deer in the headlights or stuck like a mouse in a glue trap.

Don't let this happen to you. Take steps to reduce your investment risk now. Contact us for more information on how to protect your wealth.