Showing posts from February, 2010

Investing in Uncertain Times - Part 2

“Divide your fortune into four equal parts: stocks, real estate, bonds and gold. Be prepared to lose on one of them most of the time. During inflation, you will lose on bonds and win on gold and real estate, during deflation, you lose on real estate and win on bonds, while your stocks will see you through both periods, though in a mixed fashion. Whenever performance differences cause a major imbalance, rebalance your fortunes back to the four equal parts.” In this post I will discuss the other part of Jacob Fugger’s investment approach, i.e. investing in real assets (gold and real estate). In 1981 I read a book called “ When your Money Fails ” (I still have it in my library) which talked about, the move to a cashless society (credit cards, debit cards, bar coding etc) but more importantly, the US government printing of lots of money and the high inflation it would cause. As we all know the inflation rate rose to about 12% and interest rates skyrocketed to a high of 21 percent and