Cramer builds a North Korea-proof investment portfolio
- "Mad Money" host Jim Cramer explains how investors should protect their portfolios amid rising tensions between the United States and North Korea.
- Cash, gold and defense stocks are the way to go when preparing for potential nuclear conflict, Cramer says.
Excellent stocks to own in the current environment -- but perhaps you a little late to the party, eh Jim?
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Defense stocks: Have skyrocketed lately (pun intended), really expensive now. But could there still be even more upside from here?
Gold: The conventional wisdom has been that its a "safe haven", and that it should anywhere from 5% to 10% of your portfolio.
Cash: The U.S. dollar has always been another "safe haven". (Although if the Orange-Haired One remains in office much longer...who knows?)
Gold: The conventional wisdom has been that its a "safe haven", and that it should anywhere from 5% to 10% of your portfolio.
The problem I have with gold, is you have to be really rich to buy this where the premium doesn't offset any potential gain.
Gold: The conventional wisdom has been that its a "safe haven", and that it should anywhere from 5% to 10% of your portfolio.
The problem I have with gold, is you have to be really rich to buy this where the premium doesn't offset any potential gain.
Basically, there are two ways to invest in Gold (Unless of course you want to store it in your house, not recommened)>
1. But a security that owns Gold, the price of the security goes up and down in correlation to the POG (Price of Gold).
So if the POG doubles & you sell it-- you double your money. Minus a commission, but that's really very small. And if you sell it when the price is cut in half, you lose half your money. Simple.
The most common one is GLD (I own another one: IAU). They really very similar.
2. Instead of investing in Gold, you can invest in a gold related business. A company that owns mines. One advantage of this is that you're not investing in metal-- but rather a working business. As such, you're not only benefitting from only the price increase of the stock when it goes up, but also get a dividend. The disadvantage? Its price is determined by many factors of than POG> A lot coulld go wrong. For example, there could be a long strike by miners. Equipment and other hard assets could be destroyed by war, natural catastrophes, etc.
But in one way this is not different than owning other stocks-- if the stock price doubles, your investment doubles. And in some cases that is augmented by a dividend.
but perhaps you a little late to the party, eh Jim?
I could be wrong, but actually, IMO, currently POG* may still be fairly reasonable now.
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*"POG" = The price of gold.
[FYI:: A link to this seed has been posted in the NV group Economics, Financial, Money Matters ]
But is anything really Korea-proof?