10 Principles of Inspired Investing
db By David Bradshaw
My Idea Factory

INTRODUCTION

Thrift, saving, honesty and alertness are time-proven virtues, taught by the Bible. While no one can predict the future, learning to live by inspired principles rather than ever-changing opinion polls means; learning from the past, being prepared in the present while planning for the future. Here are ten key principles to help you achieve inspiring investment success in 2016 and beyond -- no matter how depressing the news headlines become.

1) DON'T CONFUSE SAVINGS & INVESTMENT
Your savings, (whether in cash, home equity or precious metals ) is your safety net. Investments are longer-term growth assets with higher risks, fluctuating in value during changing market conditions, but should grow over time. Investment capital often uses debt to leverage growth. Using savings to leverage debt is dangerous and helped create both the housing boom and subsequent bust.

2) A STRONG CURRENCY = A STRONG NATION
"The destiny of a currency determines the destiny of a nation," according to Dr. Franz Pick, a noted free market economist. With today's dollar retaining a mere three cents of it's original buying power a century ago, it's easy to see why the world sees the U.S. as a nation in decline. Reversing the dollar's declines seems remote, given our debt and deficit addictions. Gold is now the world's only currency that has retained a store of value over time; buying roughly the same goods or services today as it did three centuries ago.

3) BAD POLITICS DRIVES OUT GOOD ECONOMICS
Gresham's Law says that, "bad money drives good money out of circulation." Sadly, the modern U.S. dollar has become 'bad' (or fiat) money ever since the government drove 'good' money out of circulation in 1971 when Nixon closed the gold window. Likewise, bad politics drives good economics out of circulation. For example, good energy economics called for more oil drilling and refining decades ago, but pandering to the environmentalist-driven agenda (bad politics) helped create the recent oil squeeze.

4) DIVERSIFY ASSETS FOR GROWTH & SAFETY
Owning a variety of assets is the best way to protect and grow wealth long term. "The Bible has more verses discussing wealth and money than it does discussing salvation," Larry Burkett once said. Regarding diversification, Ecclesiastes 11:1-2 says; "Cast your bread upon the waters, for after many days you will find it again. Give portions to seven, yes to eight, for you do not know what disaster may come." Many financial gurus today take credit for it, but this is the original asset diversification strategy.

5) COMMODITY BULL MARKET CYCLES LAST DECADES
We Americans have been trained to think, live and plan short term, buy economic cycles are long-term, running 15 to 25 years. Stocks enjoyed a great run (1982-2000), greased by low interest rates and inflation, but then the bottom fell out. The bull market in gold and commodities began in 2001 and the long-term trend remains up. Some experts say the trend toward higher energy, food and metals prices may continue until 2024.

6) NEVER BUY OR SELL ASSETS DURING A PANIC
Market manias are a product of modern, electronic "Trader-age" we live in. A panic is when our basic instinct quickly shifts from either apathy or greed to fear. Fear brings with it dangerous knee-jerk emotional reactions we may regret later. Speculation can drive prices up or down in the short term, but it is the long-term fundamentals on which sounds investments must rest. When others panic, sit tight.

7) FED/GOV'T BAILOUTS DISTORT FREE MARKETS
Neither 'emergency tax rebates', the Fed's 'TARP program' nor 'homeowner assistance programs' are the right solutions to restore public confidence or economic prosperity in a free marketplace. Every time the Fed or government changes the financial rules, the further distort the free market and create unintended consequences needing further legislation. The government's job is to keep people safe and markets free, not push us toward cradle-to-grave socialism.

8) PRACTICE CONSUMING LESS & SAVING MORE
Inspired investing means redefining 'wealth' from having an abundance of things to controlling our wants. The opposite of a capitalist is a consumerist, which is someone who forgoes future income for present pleasures (i.e. "I'm spending my children's inheritance" bumper sticker). Inspired investors do just the opposite because their goal is to build a legacy for their family and future generations. Americans need to start saving money again by living within their means and shunning debt.

9) OWN INFLATION/DEFLATION-PROOF ASSETS
Inflation or deflation can kill the best-laid savings plans. Bonds and stocks can get walloped during periods of rapidly rising prices. Wise investors are moving assets into a variety of alternatives including; Treasury Inflation Protected Securities (TIPS), commodities, energy, collectibles and real estate. The best strategy is always to get educated before jumping into any investment.

10) PREPARE FOR UNEXPECTED WILD CARDS
Economic wild cards are dealt out to the world virtually every day ranging from natural disasters... to economic crises... to terrorist attacks. Family preparedness and community involvement are important, but economic preparedness means having a pool of liquid capital in reserve to cover unexpected expenses. With political change comes new economic risks. Wild cards require trump cards. Having a supply of gold and silver coins on hand provides a safe haven in today's stormy world.

For the latest economic news and trend summary, visit Swiss America's Real Money Perspectives Daily Blog

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