Now is probably not a good time to be buying bonds.
And now is probably a good time to be selling stocks, because many of them are overpriced.
So says Investment Advisor David Smith of Smith Investment Management.
Smith offers some of his “traditional and non-traditional” wisdom on personal and family portfolios, as well a glimpse into his work teaching children about finance and economics in churches.
“I think one needs to remain conservative in one’s investments right now” he said. “It’s a time to own real tangible things, things that have intrinsic value. Farmland is good. I recommend that people have some money invested in gold and precious medals. As for stocks, owning oil is good. Oil stocks aren’t always the popular or exciting stocks, but there will be a demand for oil for the foreseeable future, no matter what the economy is doing. It’s a wise investment.”
In today’s news headlines there are details of an Ebola diagnosis in the U.S., and some have suggested that an impending “domestic Ebola outbreak” could impact Wall Street.
“I don’t know that we should be making any investment decisions today based on the Ebola virus in the U.S.” Smith advised, “but I do think it’s an opportunity for us to consider how we are set up with necessary supplies in our homes are right now. If, for example, the power went out for a prolonged period, if food supplies were disrupted for a period, how equipped are we in our own homes? I don’t think there is any warranted panic over Ebola in the U.S. right now, but we may do well to review Psalm 91, and to also re-evaluate our supply of essential material resources, along with our efforts for investing our money wisely.”
Smith notes that changes in U.S. monetary policy have made it more difficult to plan for one’s financial future, and simply possessing dollars isn’t the only thing one needs to do. “The federal reserve is printing a great deal of money right now, and that changes the value of everything” he says, underscoring his advice of owning stocks and assets that hold their value, regardless of the present-day value of the dollar. “The reason people in my business are having such a hard time figuring out what value is, is that when you increase the amount of money circulating in the economy, it changes the yardsticks.”
Smith serves in churches by teaching finance and economics to children.
“It’s really a lot of fun” he says. “The word ‘economics’ means ‘rules of the house,’ so when I teach these things to kids I take it back to the home, to the family. What goes on in our economic system begins with our households.”