Jim Rogers, co-founder of the Quantum Fund, has warned that the current market situation is the worst bear market of his lifetime. In a video, Rogers offered suggestions to investors looking to withstand the market downturn, pointing to two assets that are possibly the least dangerous during these times: silver and agriculture. Both are seen as effective hedges against inflation. Investors can buy silver coins or bars, silver exchange-traded funds (ETFs), or invest in silver miners like Wheat and Precious Metals or Pan American Silver. They can also invest in agricultural commodities through ETFs, or by owning farmland as a Real Estate Investment Trust.
What Are the Potentially Good Investments in a Bear Market and Recession?
What’s up guys and welcome back to the channel and welcome back to another crazy day here in the world. In today’s video, we are going to be exploring some potentially good investments to get involved in or to find and research in a bear market and recession.
If the market does get worse, and we have a lot of people (influential people) who believe this bear market and recession is going to get significantly worse, you’re not going to want to miss any of this video. And with that said, if you don’t know me already, my name’s Connor, and I am not a financial advisor, I’m just a guy sitting in his room. So, please take this as the very first steps in your research, and don’t make any financial decisions based on my videos.
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Inflation on the Rise
We are seeing UK inflation rising to 9.1%, its highest rate in 40 years. We’re seeing the same thing over in the US at 8.6%, and basically, the whole world is going through this at the same time. Things are not looking great.
Jim Rogers’ Warning
If we do check out this article by Jim Rogers, he’s warning that this is the worst bear market of his lifetime. And what we’re going through in this video are the least dangerous assets to own today. With the S&P 500 down 21% year-to-date, the situation for stocks is pretty grim. Jim Rogers says it’s just the start of this bear market, which means it will go down a lot and will last a long time. Rogers knows a thing or two about making money in these turbulent times. He co-founded the Quantum Fund with George Soros in 1973 right in the middle of the devastating bear market. From then until 1980, the portfolio returned 4,200%, while the S&P 500 only rose 47%. So, this is definitely someone who knows what he’s talking about with this very specific type of market at hand. He’s been through this before, and he’s come out the other side significantly in profit.
So, if you’re looking for a safe haven, there is no such thing as safe. This is something that I’ve been saying on the channel for a long time. When it comes to crypto, there is no such thing as safe. People were laughing at me in the comment section when I was saying that altcoins can drop 99% when we’re up in that bull market, and people thought we were going to the moon. I was saying there is an opportunity for us to drop 99%, so take your profits. People were laughing, but now we’re seeing today and the last few months that this is very much a possibility. Just like he’s saying, nothing is safe. So, when you invest in anything in these markets, expect that there is huge volatility, and they can, in fact, go very, very low. And that is why you should only be investing money that you can definitely do without in your day-to-day life. You shouldn’t be investing money if you need that money to live. Please don’t do that. Only invest money that you can afford to miss out on.
The multi-millionaire points to two assets that could help you withstand the upcoming onslaught because he expects it to get significantly worse. Look at your portfolio right now and decide whether or not you can handle volatility. Let’s say your whole portfolio drops another 50% from where it is right now. Decide right now whether or not you think you can handle that. Now, first of all, he says silver. The precious metals are a go-to choice for investors in dark times, and Rogers is a long-time advocate. “Silver is probably less dangerous than other things. Gold is probably less dangerous than that. Gold and silver can’t be printed out of thin air like fiat money, so they can help investors hedge against inflation”. Now, I totally agree with that. Gold and silver, I personally believe that bitcoin should also fit into this. It’s a relatively new narrative, and of course, someone who’s around 79 years old won’t actually (or most likely won’t) consider that. But, I do think that. I think it’s the new age of gold. Obviously, people don’t think it’s tangible. People don’t think that it holds any real value. I do personally. My way of looking at it is the utility behind bitcoin is simply I could get on a plane with a billion dollars in my pocket, or access to a billion dollars in my pocket. I could transfer that cross-border, and that’s something that you can’t do with any other asset. You could not do that with a lump of gold. You couldn’t do that with a bunch of other stuff. But I can have direct access to my bitcoin in my pocket, and no one will ever know about it. That’s the utility that I see, and the reason why I think it is a store of wealth. But I definitely still agree that silver and gold are also great hedges against inflation. Do keep in mind that that doesn’t mean that they’re crash proof, and he is not buying them now because in a big collapse, everything goes down. But he would probably buy more silver when it all goes down. Silver is widely used in the production of solar panels and is a critical component in many vehicles and electronic units. Rising industrial demand, in addition to its usefulness as a hedge, makes silver, in particular, a compelling asset for investors. You can buy silver coin bar directly, and you can also invest in silver ETFs like the iShares Silver Trust. Mining companies such as Wheaton Precious Metals and Pan American Silver are also solidly positioned for a silver price boom.
No matter how significant the next crash is, no one is crossing food out of their budget. Rogers said, “Silver and agriculture are probably the least dangerous things in the next two or three years.” For a convenient way to get broad exposure to the agriculture sector, check out the Invesco DB Agricultural Fund. It tracks an index made up of futures contracts on some of the most widely traded agricultural commodities, including corn, soybeans, and sugar. The fund is up 9% in 2022. So, while the rest of the market is absolutely crashing, this fund is still up 9%. You can also use ETFs to tap into individual agricultural commodities. Again, there is a list here, so definitely check this out. Rogers likes the idea of investing in farmland itself. “Unless we’re going to stop wearing clothes and eating food, if you really love it, go out there and get yourself a farm, and you’ll get very, very, very rich.” And again, you don’t have to buy physical land. You can buy this in the form of a real estate investment trust specializing in owning farmland, such as Gladstone Land and Farmland Partners. Meanwhile, new investing services allow you to invest in farmland by taking a stake in a farm of your choice. You’ll earn cash and income from leasing fees and crop sales and any long-term appreciation on top.
In conclusion, these are just a few potential investments for those looking to navigate the current bear market and potential recession. As always, be sure to do your research and only invest money that you can afford to miss out on. Remember that there is no such thing as a “safe” investment, but with some strategic planning and a bit of luck, you just might be able to come out ahead.