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The Safety Talk: Why Diversifying Is More Important Than Ever

22 Nov
Man turning a dial to move the risk level at medium

The Safety Talk: Why Diversifying Is More Important Than Ever

My Personal Bug-Out Plan

As the year rounds the corner to its end, Brexit is back in the news. Theresa May battles on.

Meantime, the Chinese keep trying to figure out Trump’s next move, and actions by the Saudi government that would have started a world war 100 years ago are still playing out… and, who knows… just might start one now.

Instability and uncertainty in many directions.

You know my mantra: Diversify or die broke.

In other words, yes, this world of ours is struggling on many fronts… but not everywhere.

That’s why the secret to thriving in our current climate is a plan that diversifies not only your investment portfolio but your life.

As we all begin to prepare for a New Year, the need for this kind of a backup (or bug-out) plan is more urgent than it’s ever been.

I’ve spent the past month reevaluating and refining mine. In fact, I’ve evolved it into a series of plans, to try to make sure my family is OK no matter what form a potential global crisis might take.

I’m no doomsayer. I haven’t been predicting the end of the world… or the dollar… or Western civilization as we know it for decades, and I don’t see disaster around every corner.

I don’t have my head in the sand either. I see the potential right now for serious financial crisis and even a global war.

Meantime, of course, Mother Nature will do what she will. Weather risk is real.

What Will You Do If Things Go Bad?

I like to use Argentina as an example of a country well accustomed to dealing with crisis. Each generation of Argentines grows up watching its elders navigate one disaster after another and perpetually preparing for whatever catastrophe will strike next.

The one thing an Argentine is certain of in the face of the eternal uncertainty of the Argentine reality is that another debacle is forever on the horizon.

The Argentines I’ve known aren’t complaining, despondent cynics; they are realists who remember history. They don’t become complacent after a decade of growth and prosperity. An Argentine banks on the fact that nothing good lasts forever… and so he banks offshore.

He keeps as much of his wealth as possible beyond Argentine borders and therefore insulated from Argentine crisis.

Much of today’s world has become complacent… especially North America and Europe.

World War I began with a single shot and then led to World War II. No conflict since has enveloped the entire world… and economic growth in the West has been good these past 70 years.

Decades of relative peace and prosperity have had much of the world feeling comfortable and safe.

But the global landscape is shifting.

Buildings require emergency exits and sprinklers even if the location has never suffered a fire, and you have to listen to the safety talk every time you get on a plane.

What’s your personal backup plan?

I share mine with subscribers to my Simon Letter advisory service in this month’s issue.

Happy Thanksgiving.

Lief Simon