This is the last issue of the Asia Wealth Investment Daily. Thank you for being with us. Happily, we’re leaving you in good hands with Daily Wealth.
In DailyWealth, Dr. Steve Sjuggerud and the Stansberry Research team show you how to avoid risky investments, and how to get ahead of what the average investor is doing. They cover opportunities they see in markets… they share the world’s best wealth ideas… and also bring you strategies that will help you build a lifetime of wealth.
But before I sign off, I’d like to leave you with a few final thoughts.
1. It’s the Pacific Century.
It’s a total cliché. But it’s 100 percent true. The centre of balance of the globe – economically, politically, geopolitically, demographically – is moving east.
It’s just a question of time before China’s economy becomes the world’s largest. China has been steadily building a network of investment and infrastructure stretching the globe… and it’s still in the early stages.
One of the most amazing graphics you’ll ever see shows how around half of the world’s population lives within a relatively small radius from northern Vietnam. That’s where the action will be this century.
And meanwhile, in the wake of its willful desertion of its allies, the U.S. is rapidly becoming a spent force geopolitically. And China is eagerly stepping up to become the grown-up at the global table.
2. The blockchain is very big.
I think that cryptocurrencies are at the stage of the internet in 1994.
Back then, some people believed the internet would become explosively powerful. Others thought it was a waste of time. But most people didn’t think too much about it. Soon thereafter, anything internet related went through a period of massive speculation (see: Pets.com… and the 1999-2000 internet bubble), followed by a massive bust.
Now, nearly two decades later, the internet is an essential fabric that weaves together society and civilisation. It’s found its way into nearly every realm of life and many of us even have more than one internet device that we use for hours a day. Vast fortunes were gained and lost along the way. But anyone who doubted the appeal of the internet in 1994… well, they were wrong.
Where the internet has come today is how I think the evolution of blockchain will unfold over the next 20 years (or less… since – thanks in no small part to the internet – everything moves so much faster today). But today, some people think blockchain will be huge… others think it’s silly… and most people haven’t really noticed it. Sound familiar?
I don’t know whether any of the coins or tokens around today will be in existence five, 10 or 20 years from now. (How many of the hot internet stocks from 1999 are still traded? Not more than a handful.) But I think blockchain will be as much a part of the lives of our children as the internet is of ours today.
However, few people understand cryptos today. Just one example… in an article in the New York Times earlier this week about Facebook’s new crypto effort, cryptocurrencies are said to be “best known for speculative investments through digital tokens like bitcoin and outside-the-law e-commerce, like buying drugs online”.
You can do a lot of things (good and bad) with currency, cash or crypto. To focus on how cryptos are “best known” for buying drugs online?… that’s ridiculous. And it reflects how little (even, or especially, journalists) understand cryptos.
3. You should macroversify.
If you keep all of your eggs in one basket, you’re setting yourself up for big losses – and possible disaster.
The idea behind diversification is simple. It means putting your eggs in different baskets. That is, spreading your risk across different types of assets, so that a decline in value in any one holding isn’t so bad – because there will likely be other holdings that rise to help balance out the losses.
But diversification goes beyond just holding a number of different assets… what about your “personal equity”? Is it diversified?
Equity is what’s left after you add up the value of everything you own, like stocks and stamp collections and your flat. Then you subtract what you owe (on your mortgage, to the taxman or to your ex-spouse, for example). What’s left is your net worth, or your equity.
So when I say “personal equity,” I’m talking about a much more broad definition of your assets. It includes everything from financial, personal and professional experience to prospects and earnings power. Personal equity measures how you’re going to build your equity in the future.
It’s about where you’ll be earning your living and adding to your savings in coming years. Where is your paycheck coming from? What other sources of income do you have? Where is your professional network – and how strong is it? How transferable are your skills? How many languages do you speak – and how easily could you work in a different country?
Most people work in the same country where they have almost all of their assets. And even if you do hold some foreign shares or own real estate in another country… when you factor in where and how you’ll be earning money in the future, you’re probably a lot less diversified than you think.
4. Always manage your risk.
Easy things can keep you out of trouble.
It’s only difficult if you don’t do these things. So do them.
5. It’s not too late to save and invest. If you haven’t… start now.
All the best and good investing,
Publisher, Stansberry Pacific Research