Gold Is a Better Way

. . . And Other Wealth Building Secrets Wall Street Doesn't Want You To Know

Adam Baratta

• Publisher: Morgan James Publishing
• Year: 2018
• ISBN:
  9781642791075
• Topic: Desarrollo personal
• Subtopic: Finanzas personales

The shocking truth about where the markets are headed and why owning physical gold—not paper assets—is a far better strategy to building real wealth. An indispensable resource for the everyday investor, Gold Is A Better Way turns the strategies recommended by Wall Street on their head and makes the case for a return to sound investing. Adam Baratta strips away all the confusion and complexities surrounding investing and breaks down investment concepts and the simple fundamentals driving markets. He provides a roadmap for how to win at the game of investing and, more importantly, explains the "why" so readers can continue to win. Everyday investors gain tools that allow them to know with certainty they are making sound investment decisions, as well as an understanding of where to diversify investments that have historically performed well. There is a massive environmental shift happening in financial markets. Interest rates are rising and what has been very easy for investors in the past is about to become very hard. Everything people think they know about investing is being turned on its head. It's time to change investing behavior. "A fresh new voice in the world of gold... Baratta's book and cutting edge platform make the undeniable case why gold demands consideration in every portfolio." —ZeroHedge

II

WHERE WE ARE

3

ARE YOU HEALTHY?

“I am in shape! Round is a shape!”

John Candy

What The Wise Man Does At The Beginning, The Fool Does In The End

I recently went through an in-depth medical examination where I saw seven different doctors in two days. I am 48 years old and newly married and wanted to get deep and comprehensive overview of my health.

I was given extensive laboratory testing that included blood counts and chemistry panels to assess my organ function with urinalysis and cholesterol screening. I was given a cardiovascular assessment that included an electrocardiograms, electron beam coronary CT scan/angiogram, cardiopulmonary exercise testing and advanced blood tests with carotid intima medial thickness scanning. I was given Doppler flow peripheral vascular index testing. I was also given hearing and eye tests, body composition testing and a personalized nutrition counseling session.

It took two full days of time to do all of the tests that were performed. Thankfully I can report that I passed with flying colors. While I have always taken fairly good care of myself I had shunned doctors visits for a long time. Undergoing these tests was stressful and not at all fun.

In hindsight it turned out to be a great experience. Knowing that my tests came back normal and that my levels were within a healthy range has allowed me the peace of mind to feel like I am in fine shape and have no serious issues to be concerned about, or at least that are detectable. Putting off doctor visits for so long prior left me with a subconscious stress. Receiving a clean bill of health erased all of that worry.

There are a lot of tests one can do to measure physical health. What tests can we do to measure the levels of our investments and the strength or weakness of our financial health? What are considered normal or healthy levels for the assets we invest in?

Are you stressed about your financial future? Are your investments healthy? Wouldn’t it be great to have something more to hold on to than just hope? Hope, after all, is not a strategy.

I have spoken to thousands of people about this very question, from retirees to doctors, lawyers and engineers, to government employees, teachers, union workers and hundreds of other professionals. Fortunately for me, my business allows me to meet people from all walks of life with various backgrounds, skills and income levels. Of the thousands of people I have spoken to, very few have a specific process to make this evaluation.

The best most of us can do is to say ‘I feel good’ or ‘I don’t feel good.’ A feeling is not a great measurement tool for health or finance. If we wait until we feel bad, often times it’s too late. The goal is to act in advance of feeling and with a system or strategy that allows for success regardless of feelings.

Many investors I speak with tell me that they are feeling good or bad about their investments because of how they have performed in the past. They’ll say that the market is up or down and either ‘I’m making money’ or ‘I’m not.’ These investors are judging past performance and the good or bad feeling with seeing their account balances grow or decline. Investment decisions, just like health decisions, need to be forward looking.

One of my best friend’s father took exceptional care of himself. Every morning he would take his supplements and vitamins, go for a brisk 5 mile walk, sit down in his home office afterward and eat a healthy breakfast. Then he would read his Bible. One morning, after following his tried and tested routine he went into cardiac arrest. With no warning he passed away. He was 62 years old. He had left the house that morning feeling great. While he felt he was in excellent shape had no idea that his arteries were 90% clogged and that he could have gone into cardiac arrest at any time. He couldn’t feel his health risks.

Investments are similar in that they may feel good as they move higher in value. In today’s market you may feel invincible about your investments. This perhaps has never been more true for investors than today. During this run up in the Everything Bubble virtually every financial asset has increased in value.

Do you have a balanced diet in your investments? Do you have expectations based on past performance or are you looking ahead and anticipating what is coming next?

It’s never been more challenging than today to obtain unbiased information. In today’s social media and fake news world much of the information we receive is skewed to our particular tastes based on algorithms designed so that advertisers can find us more easily.

Confirmation bias is a scientifically proven phenomena. It means that when we make decisions we tend to look for information and evidence that is supportive of what we have already decided to do. Said another way, we tend to predict what we root for. Confirmation bias with our investments can be very dangerous as it allows for less objectivity about the reality surrounding us.

A recent, non-scientific ‘Internet search’ study was performed with three individuals, a Conservative, a Liberal and a Moderate. The Conservative loved red meat and was often online looking at nearby steakhouses and recipes for cooking red meat. The Liberal was health conscious and often searched online for healthy lifestyle choices, and the Moderate loved to travel. Each were asked to type in the word “chicken” into their search engines. The Conservative was provided a list that included “chicken fried steak.” The Liberal was provided “organic, free-range chicken,” and the Moderates’ search offered up advertisements to “travel to Kentucky.”

If the very information we receive is skewed based on algorithms that are designed to reaffirm what we already believe, how can we ever develop a balanced viewpoint? One of the most dangerous aspects to social media is that we are communicating with people who are only like we are. People that have similar opinions and perspectives. The information we receive from them often validates our own perspectives. People who “like” the photos we like, who “retweet” the ideas we agree with, and who “share” cute dog videos similar to the ones we do on social media. It can all become a self replicating loop feeding similar content and ideologies.

Obtaining unskewed information in today’s world is very challenging. When we receive information based on proclivities rather than realities, it may lead to a dangerous confirmation bias that promotes a herd mentality and inspires looking for support for conclusions we have already made, rather than objectively looking at the world as it truly exists.

Rather than first give you an opinion of where we are headed, I will begin by starting with where we have already been. The future is unknowable, the past is unchangeable. Before arguing what new strategy you should consider for the future, let’s be sure we are on the same page as to what has already occurred and the underlying reasons why. From there, a new strategy will be revealed.

4

THE EVERYTHING BUBBLE

“I can’t afford a vacation so I’m just going to drink until I don’t know where I am”

Dean Martin

Stocks Are Significantly Overvalued And In A BUBBLE

A bubble can be defined as an extended period of time where asset values are significantly higher than their historical norms. So how do we know if we are in a bubble or not? Believe it or not, just like medical tests that tell us if our numbers are in a healthy range, there are also ways to measure whether assets are undervalued, fairly valued, or overvalued. Investing is actually not very complicated. Everything you need to know about investing you probably learned at a very young age. Buy low and sell high.

Where the complexity can arise is in deciphering what is low and what is high. This mandate would be a lot easier to follow if we knew how to more accurately measure value. The reality is that most average investors do the exact opposite. They buy when things are high and sell when they are low.

Warren Buffett is among the most famous investors in the world. He has a story that he tells about investing that goes the following way. “In the Buffett household we love hamburgers. We will be eating hamburgers in the Buffett household for the rest of our lives. When the price of a hamburger is high, we sing the blues because we won’t be able to afford as many hamburgers. And, when the price of a hamburger is low we sing for joy, since when that occurs we can afford even more hamburgers.” He then goes on to say the following: “I find that most people are the exact same way when it comes to almost everything, except for the stock market. For some reason when stocks are high people want to buy them and when stocks are low is when most people want to sell. I prefer cheap hamburgers and will do my best to sell when prices are high and buy when prices are low.”

Wouldn’t it be great to be able to invest like Warren Buffett? To know if things are high or low? To see bubbles for what they are and get out of them before they pop right in our face and get stuck all over us?

If you are a long-term buy and hold investor it’s imperative to understand the key to your overall success will be the value at which you acquire assets. When you buy assets that are undervalued a...