2011 is not going to go down in the history books as a particularly good year for investors, particularly for those of us closer to the middle-income range of the economic scale.
This was the year millions of Americans watched the stock market recover only to discover that their 401(k) plans were still stuck between 10 and 15 percent in the hole. That was a development that rubbed in what many already suspected; the stock market is a game rigged in favor of the big players at the expense of the many.
Some of you think, probably due to my focus on precious metals and the fact I believe the stock market is a big ripoff, that I don’t recommend putting any money in equities, but that’s not entirely accurate. I do suggest, if you are going to invest in stocks, that you invest in broad index, low-fee ETFs instead of managed funds and to keep a mix of bonds and index ETFs to balance out the volatility.
I’m still maintaining a defensive posture into 2012, with a focus on minimizing loss at the expense of maximum gains. That means a higher percentage of asset allocation in precious metals, in the 10-15 percent range. I still believe that gold and silver are the best hedges against economic turmoil for retail investors.
Above all, in 2012 it will be more important than ever to maintain a disciplined approach to investing. And since many of you will be getting new Kindles and ebook readers, I thought I’d share the ebook version of my reading list.
That should give you plenty to read while I take a few well earned vacation days next week.
Whatever happens in 2012, keep in mind we’re all in this together. The status quo benefits from a political house divided and people who see solutions differently are not your enemy. The American middle class rowing together is the most potent political and economic force on the planet. We can win a better deal for ourselves and our children, but not if we keep viewing our neighbors as somehow less American because they believe differently.
Happy new year, everyone.