Time To Press The Eject Button?

Convention would suggest as this is a first post it may be best to focus on an introduction but as we live in interesting times and I’m arguably a tad behind schedule in getting these online machinations underway it’s time to jump in at the deep end, sans budgie smugglers, and return to the pleasantries later.

There is one golden rule reference making predictions; don’t do it. Or more precisely if you are stupid enough to make one then never apply a timeline. So predicting I will die is a fairly sound call but not if I add in next Tuesday lunchtime (unless of course I have a pre-arranged tête-à-tête with a Bulgarian umbrella operator on Waterloo bridge). So ‘stand away from the prediction’ is generally sound advice.

But thinking about, as opposed to predicting, the future is perfectly reasonable behaviour. And whilst not doing so up until now has had few negative consequences this is no longer the case. To cut to the chase, we are still facing a possible systemic collapse of the financial system or at the very least a massive bout of uncertainty and disruption to it. Ignorance and inertia are now very high risk strategies as far as your personal finances are concerned. Risk mitigation should be a priority regardless of whether the worst does or doesn’t come to pass.

So what can you do? Well let’s be clear, I’m not offering you any formal financial advice – what you do with your money is your own responsibility. However, at the moment, most investments look about as appealing as a robber’s dog chewing a wasp. Personally speaking I have moved most of my 'spare' money to cash (the worst possible place to be in the mid to long term) and gold. Why? Well as Mark Twain once said “History never repeats itself but sometimes it rhymes”. We will be delving into the whys and wherefores in future posts but let’s just leave you with a recent quote from Hugh Hendry:

"We are single-digit years away from the most profound market clearing moment".

Well actually Hugh may I humbly suggest it may be months not years? My money is on (or rather isn’t) 2012. This isn’t a prediction, it’s just a precaution. And if you are going to take precautions now looks like a good time to start. If I am wrong, the down side should be minimal; if I am right the upside is substantial. That’s asymmetric risk for you. Eject? I already have.