From the Mayan Doom calendar that predicts the world is toast on December 21, 2012 to the current unrest in the Middle-East, as the poor riot for food and jobs; I have come to the conclusion that maybe there is something to getting defensive by owning food, water, precious metals and energy stocks and funds.
In the past and in my personal portfolio I have made wrong Big bets on oil and shorting the domestic economic recovery only to have my kiester handed to me. Which is my mea culpa saying that I could be just as wrong as wrong can be for writing what comes next.
Right now we have a world that is changing and probably changing quicker than a lot of us old poops can wrap our little gray cells around.
The so-called emerging markets are full fledged modern semi-capitalist countries with their population no longer isolated from what is happening elsewhere in the world. The poorest of the poor get news about Big Macs, fancy cars, air conditioning along with better food, health care and education. They are our competition for food, energy and resources. The latest civil unrest in Egypt, Jordon and the rest of the Middle East is sheer proof of that.
We know that right now food and agricultural prices are skyrocketing because more people want to have better nutrition for their children and families. Not only that but populations are growing. There is simply not enough to go around. Clean potable water accounts for only about 1% of the entire supply. Mining for materials that make cars, computers and infrastructure is getting more costly. New homes, cities, office buildings are being built where none existed two decades earlier. Need for fuel is increasing across the globe. Major oil companies have been selling their non-performing assets (See January week 4 Blog) to reinvest into new wells.
If all this is happening and we ignore and limit our investments to the traditional small, mid-cap and large cap companies we may indeed be short-sighting where a portion of our monies need to be invested.
A few years, okay, maybe last year, I would have laughed at someone recommending investing in water. The need for clean water is growing by the day as are the other mentioned basics.
It may be just that time that as investors we create, within our investments, a smaller but defensive portfolio comprised solely in those companies that provide food, water, precious metals/mining and energy.
In the past we’ve skimmed across words from professional investors who’ve suggested we buy only those things that can be grown, mined, eaten or drunk. The need for those basics may indeed be more valuable on a continuing basis than investing in gold or silver, with less possible downside.
The basic investment theme of buying those products/materials and supplies that are limited or diminishing because of a greater or increasing demand and need holds true for these basic necessities that support modern life.
Call me for questions and additional information that may fit your portfolio and comfort level.
Questions call Paul @ 877-783-7080 or write him @ pstanley@westminsterfinmancial.com Share this blog with someone who cares about their money.
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