I'm an unusual silver owner.
I'm excited the metal just suffered one of its biggest drops in 10 years. And this makes me an "odd man out" in the advisory business.
For the past several years, I've encouraged everyone I know to own silver as a "crisis hedge" asset. Precious metals like gold and silver tend to soar during times of economic turmoil.
I even produced a special report on the simplest, easiest, best way to own silver, which I made available to Retirement Millionaire readers two years ago. I wouldn't be surprised if readers who take my advice make another hundred percent gain in the next few years.
But here's where I differ from most advisory writers...
I don't think there's going to be a big crisis in America soon. I'm no "doom and gloom" analyst. I don't think the dollar is going to collapse. And I don't think you need to stock up on bottled water, bullets, and live in a bomb shelter. I own plenty of U.S. stocks and bonds, and I recommend you do the same.
But I also believe in insurance. I believe in staying "hedged." For many years, my job at Wall Street bank Goldman Sachs was to develop and implement advanced hedging strategies for wealthy clients and corporations. The goal with these strategies was to protect jobs, wealth, and profits from unforeseen events.
During those years, I learned a big difference between wealthy people and poor people. Wealthy people almost always own plenty of hedges and insurance. They consider what could happen in worst-case scenarios and take steps to protect themselves. Poor people tend to live with "blinders" on. They do things like keep their retirement fund in just one or two stocks... which is incredibly risky.
Fortunately, for most investors, you don't need a complicated set of hedges. You simply need to own gold and silver. As I showed you last month, keeping 5%-10% of your portfolio in silver can make a huge difference in a broad market decline. So while most folks see silver as a wildly volatile asset, I actually see it as a risk-reducing "sleep well at night" asset.
But for most silver owners, the past few weeks have brought "stay UP all night" action...
As you can see from the chart below, owning silver has been a wealth loser for the past month. Silver traded for $42 per ounce in August. It has fallen down to $30 in September... a decline of 28.5%. This big decline has a lot of silver owners worried.
As I mentioned, I'm actually happy to see lower silver prices. I'm happy for two reasons:
1) It gives my readers a chance to buy this "crisis insurance" at a discount. Silver is 38% cheaper than where it was at its peak in April.
2) Silver and gold are a sort of temperature gauge for the global financial system. Soaring gold and silver prices are an indication that something is wrong with the world's credit and banking system.
If gold and silver were to collapse 50%, it would be one heck of a sign that politicians are taking the right steps to get our economy on track. This would create a fantastic environment for owning stocks, bonds, and real estate. I wouldn't mind losing money on my silver if the other investments are improving...
But I'm not holding my breath and waiting for politicians to become saints and geniuses. Mind you, I believe America has much brighter days ahead of it. The American system is still an incredible producer of wealth. America is still THE place to get rich. American corporations like Coke, Johnson & Johnson, and Apple are the best in the world.
That's why I still own U.S. stocks and bonds. But just like I wear my seat belt while driving, I own silver and gold – just in case. And due to the drop of the past few weeks, these "crisis hedge" assets are on sale at great prices.
If you don't own silver and gold yet, I recommend putting at least 3%-4% of your overall portfolio into them immediately.