Rick Rule: Your cash savings will be crucial during a ‘dramatic debrief’

Here are some strategies to protect your portfolio against shocks for 2022

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The stock market is heading into 2022 at all-time highs. But according to famed investor Rick Rule, the new year could be filled with turbulence.

“If you defer a settlement, you almost always have to pay it back with interest,” Rule warned in a fourth quarter interview.

The former president and CEO of Sprott US Holdings believes that all of the Fed’s easy money policies will have serious consequences.

“So the fact that you can skate today and tomorrow and the day after tomorrow with other people’s money means that at the end of the day when society itself has to foot the bill, the bill is a lot, a lot, much more important.”

The good news? Rule also suggested a few safe-haven assets to protect you. One of them might be worth investing in some of your extra cash.


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Save money

A bundle of US dollars is rolled up in a hand.

Natalia Yankovets/Shutterstock

This may seem counter-intuitive since inflation erodes the purchasing power of cash. But even in this environment – where you don’t earn much on savings accounts – Rule still believes in having cash on hand.

“A circumstance where you have a dramatic track record, something like 2008 or 1987, or 1990, the liquidity squeezes, when they happen in the market, temporarily lower the price of everything,” he explained to StansberryResearch.

“Having money gives you the tools and the courage to take advantage of this circumstance rather than being taken advantage of.”

In other words, the cash acts like dry gunpowder, allowing investors to capitalize on opportunities if and when things take a dramatic turn south.


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Buy some gold and silver

Gold and silver nuggets on a black background.  Precious stones, luxury concept and mineral drainage.  Industrial activity, treasure and fortune.


It is obvious. Given central banks’ money printing, Rule emphasized the importance of owning gold and silver.

And the fun part? You don’t need to have too many.

“If you have a circumstance where fiat goes to hell in a hand basket, the advantage you get in your gold and silver means that a small insurance premium, i.e. a small holding of physical gold and silver, compensates for a very great deterioration in the purchasing power of your fiat currency.

“So absolutely save some of your gold and silver wealth,” Rule pointed out.

Remember: Some mining companies are also well positioned for a precious metals boom.

For example, Wheaton Precious Metals, Pan American Silver and Coeur Mining tend to do well with rising silver prices. Meanwhile, Barrick Gold, Newmont and Freeport-McMoRan could offer serious returns in a gold rally.


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And these days, you can create your own safe-haven portfolio just by using your spare pennies.

Own high-quality agricultural land

Young green corn growing in the field at sunset.  Young corn plants.  Corn grown in farmland, cornfield.

Mark Borbely/Shutterstock

Real estate is another classic hedge against rising inflation and interest rates.

But Rule said “the only sector” where he is increasing his personal exposure to real estate is in high-quality farmland, particularly in the upper Midwest of the United States.

“To the extent that I can buy very high-quality farmland in the American Upper Midwest, I do so very aggressively,” he said.

More and more investors have warmed to the idea of ​​farmland, and for good reason: No matter how the economy turns out, people will always need to eat.

As an inherently valuable asset, farmland can be an ideal hedge because it has little correlation to stock market ups and downs.


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Between 1992 and 2020, US farmland yielded an average of 11% per year. During the same period, the S&P 500 returned only eight percent.

These days, you don’t need huge cash savings to get into commercial real estate.

New platforms allow you to invest in fractions of commercial and multi-residential properties, with as much or as little money as you want.

A “more refined” haven of peace

woman visiting art gallery lifestyle concept

Beach Creations / Shutterstock

If you like assets that aren’t subject to the ups and downs of the stock market, but can also serve as inflation protection, there’s one more to consider: fine art.

Contemporary artwork has outperformed the S&P 500 by 174% over the past 25 years, according to the Citi Global Art Market chart.


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And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no connection, Citi found that the correlation between contemporary art and the S&P 500 was only 0.12 over the past 25 years.

Investing in art by Banksy and Andy Warhol was once only an option for the ultra-rich, like Rule. But with a new investment platform, you can invest in iconic works of art, just like Jeff Bezos and Bill Gates.

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