The impending failure of Evergrande – the second-largest real estate developer in China – continues to send nervous vibrations to global markets.
And “Rich Dad Poor Dad” author Robert Kiyosaki predicts a major accident because of it.
“HOUSE OF CARDS collapses. Real estate is collapsing along with the stock market, ”Kiyosaki tweeted last week. “The Chinese group Evergrande cannot pay. Evaluation of false properties. Will the real estate crash spread to the United States? Yes.”
He also told Kitco News on Wednesday that it “is going to be the biggest crash in the history of the world.”
The good news? Kiyosaki also provided some suggestions on how to prepare for the seemingly inevitable slowdown.
He offered to invest in the following three assets – they might be worth sprinkling some of your spare currency on.
This is Kiyosaki’s simplest recommendation. For centuries, gold has been the ultimate safe haven.
It cannot be printed out of thin air like fiat money, and its value is largely unaffected by economic events around the world.
Investors often rush to gold in times of crisis, so it makes sense to get ahead of the curve.
Example: In the first six months of 2020 – when the stock market rolled a roller coaster due to the COVID-19 pandemic – increasing demand for the yellow metal drove its price from $ 1,509 to $ 1,772l ‘ounce.
The most direct way to play gold is to own bullion. But it can be difficult and costly. A simpler method is to invest in large gold mining companies.
If gold prices go up, these miners will earn higher income and profits, which tends to translate into higher stock prices.
For example, companies like Barrick Gold, Newmont, and Freeport-McMoRan generally do well during tough times for other industries.
And nowadays, you can make your own doomsday wallet just by using digital coins.
It’s also not surprising that Kiyosaki loves money. Like gold, silver can be a store of value and a hedge against rising rates and inflation.
Gray metal may not sound exciting, but it can be a very effective outfit in uncertain times. Over the past two years, the price of silver has increased by over 30%.
As you might expect, rising silver prices benefit silver miners.
Some of the easiest ways to play a looming silver boom are through big miners like Wheaton Precious Metals, Pan American Silver, and Coeur Mining.
That said, silver is also widely used as an industrial metal. Thus, a slowdown in global economic activity could have a negative impact on the prices of silver.
Once considered a niche asset, Bitcoin has now entered the mainstream.
You can buy Bitcoin directly. But if you don’t like that kind of volatility, you can also invest in companies that have linked to the crypto market.
Tesla, for example, owns around 42,000 Bitcoins according to CEO Elon Musk’s Twitter account. When Bitcoin moves, Tesla stocks tend to follow suit.
PayPal is another crypto game. Last October, the company launched a service in the United States that allowed users to buy, sell, and hold cryptocurrencies. It launched a similar product for the UK at the end of August.
And then there’s Nvidia, which is known for its graphics processing units. The company’s products are a must-have for serious video gamers, but they are also in high demand among cryptocurrency miners.
In its second quarter earnings call, Nvidia said it was unable to determine how much of its $ 3 billion in gaming revenue actually came from gamers rather than minors.
Of course, these stocks are not cheap.
Tesla is trading at $ 776 per share, Paypal at $ 263 and Nvidia has a stock price of $ 205.
But you can get some of these Bitcoin games using a popular stock trading app that lets you buy fractional stocks with as much money as you are willing to spend.
The best protection?
Like any other asset, the price of gold, silver and Bitcoin can fall further in the event of a stock market crash.
Kiyosaki even predicted that when the stock market crashes, “it’s gonna cause everything to crash with him.”
If you want an asset that has little correlation to the ups and downs of the stock market or real estate, there’s another one to consider: American farmland.
Even if the next crash ends up being the biggest in the history of the world, people will still need to eat.
And over the years, farming has been shown to offer higher risk-adjusted returns than stocks and real estate.
New platforms allow you to invest in US farmland by taking an equity stake in a farm of your choice.
You will earn cash income from rental fees and crop sales. And of course, you will benefit from any long-term appreciation on top of that.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.