Masters Series: How to Make Money Outside of the Stock Market, Part II

Editor's note: If you're growing cautious of keeping all of your investments in stocks, Steve Sjuggerud has an idea for you...
 

Yesterday, we shared some ideas for diversifying your wealth outside of the stock market. In today's edition of our weekend Masters Series – adapted from episode No. 4 of Inside True Wealth – Steve continues his discussion with collectibles experts David Hall and Van Simmons.
 

In it, they talk about the upside in owning gold today... why gold and the dollar have moved in tandem of late... and proper asset allocation...
 

 

How to Make Money Outside of the Stock Market, Part II
An interview with Steve Sjuggerud, editor, True Wealth
 

Steve Sjuggerud: You could make a fantastic return if just collectors start paying attention in gold again. Right now, we have this hated moment in gold and in gold stocks. So how should a regular guy consider diversifying his wealth? He has money in the stock market, he owns a house, and he's scared about both. Is there a recommendation that you feel is appropriate as a gold allocation? It's different for everyone, but is there a general rule of thumb?
 

David Hall: Your age, the size of your net worth, and all that come into play. But talking about gold now, we haven't touched on the foreign currency differences. I know you feel strongly about gold here, even though the U.S. dollar is at an all-time high.
 

Sjuggerud: We should talk about that. I do feel strongly about this idea. The dollar is extremely strong relative to every other currency in the world right now, and what most people don't realize is that actually gold has been stronger than the U.S. dollar. People ask me, "How could gold and the dollar go up at the same time?" A bull market in gold is a bear market in the dollar. That's the prevailing belief. So how can both of them be going up right now?
 

What's happening is everybody is getting money out of Europe and out of the Japanese yen because they're earning negative interest rates in Germany, Switzerland, and Japan. So people are moving their money out and they're putting it into the safety of the U.S. dollar. They're buying U.S. bonds. Meanwhile, there has been so much demand for gold that the price of gold has gone up. What has happened is a fear trade, which has pushed both the dollar and gold up. But people are still not paying attention to gold.
 

Van Simmons: When you're talking about how much would I allocate, everybody is different. I have a huge amount of my money tied into gold bullion. For years, people would say to me, "Well, where do you think gold is going to be in five years?" I'd go, "Where do you think the dollar is going to be in five years? Tell me that and I'll tell you the answer." But you can't do that right now because they're both going up.
 

For me, it would be about 50% in gold coins, 25% or 30% in gold stocks, and maybe 20% in gold bullion, because I think gold stocks and rare coins have much greater upside potential than gold bullion over the next five to 10 years. It may be different for somebody else, but I wouldn't put all my money just in gold bullion. That's a good place to start, but I think there's so much more leverage in some of the other areas.
 

Hall: It's almost like you should tell your wife to go shopping in Paris because the euro is so worthless right now. She should be buying dresses with euros and you should be buying gold here with U.S. dollars. Because in terms of U.S. dollars, relative to other currencies, gold is cheap.
 

 

Editor's note: Outside of gold and gold stocks, Steve has found a "secret currency" that he believes is one of the safest ways to protect and grow your wealth in the upcoming years. Right now, you can learn about this secret currency, plus receive all of his monthly analysis, special reports, and other research for up to two-thirds off the retail price.
 

Best of all, you have four months to decide if it's right for you. If you're interested in protecting your money and assets from what the government is doing to our money... and safely making extraordinary gains with these "outside the dollar" investments... consider a risk-free trial subscription to True Wealth. Learn more here.