Emma’s Note: For the last few days, our colleague Tom Dyson has been writing to you about the biggest bets of his life… Before leaving for a round-the-world trip with his family – a trip that has taken them to 29 countries over four continents, so far – he invested his family’s entire savings into this one investing strategy.
Tonight at 8 p.m. ET, in a special online briefing, he’ll reveal all the details of his strategy, including exactly how he has invested his $1 million… what he plans to do with it in the future… and why he believes this one strategy will secure his family’s financial future, forever.
For those of you tuning in – and it’s not too late to register! – here’s a quick recap of the main points of Tom’s strategy…
If you’ve been reading my recent essays, you’ll know that I’ve been promoting a simple exchange: Sell stocks, buy gold.
Now, keep in mind that we’re not buying gold as an investment. We’re simply lightening up on passive stock market investments like ETFs, robo-index funds, mutual funds, stock ETFs, and buy-and-hold stock market strategies…
…and moving to the sidelines (in gold) until stocks get cheap enough for us to buy them again.
In other words, we are using gold primarily as money – a safe haven – and not as a speculation on higher gold prices.
This is why I’ve put the bulk of my money into physical gold. It’s a way to keep us safe while the investment markets correct.
This chart shows what I’m talking about. It shows stocks (specifically the Dow Jones Industrial Average) priced in gold.
As you can see, the primary trend in the stock market has been DOWN since October 2018, when it peaked at around 22. It’s currently around 14. And it’s on its way back down to below 5.
By owning gold, we set ourselves up to buy stocks at some point in the next five to 10 years at much lower valuations than they are at today.
And as such, the only thing that matters is how gold performs relative to stocks. Its nominal price of $1,700 – or whatever it is today – is irrelevant.
So if you’re worried that you’ve missed the boat, keep in mind that this trend still has a long way to go. So for the moment, I have the bulk of my portfolio in physical gold.
My strategy does involve other plays, in smaller amounts. All in all, I’ve invested nearly $1 million in this strategy.
But here’s the rest of my plan…
When the Dow-to-Gold ratio reaches 5 – what Bill Bonner calls its “rendezvous with destiny” – I will sell my gold and buy what I call “corporate aristocrats.”
These are companies with decades-long track records of relentlessly raising their dividends.
There are no better passive investments than stocks like these. You get rich twice this way. Once from the rising dividends and then, from the compounding effect of reinvesting dividends.
There is no better way to grow wealth.
But until it’s time to buy these corporate aristocrats, I’m sitting on the sidelines in gold, where I will remain until stocks are ready to beat gold again.
Timing the Trade
And I’ll know the time is right by keeping an eye on the Dow-to-Gold ratio.
Then, I will resume my long-term “corporate aristocrat” compounding strategy.
If I’m right about this – and if I time my zigzag correctly – my family will never have to worry about money again.
Editor, Postcards From the Fringe
P.S. It’s not too late for you to get on the right side of the primary trend, too.
Tonight at 8 p.m. ET, I’ll show you why this could be the most important decision you make with your money over the next 10 to 20 years. If you’re interested in learning more, sign up now to save your spot for my special briefing right here.
Like what you’re reading? Send your thoughts to [email protected].