Steve, I would bet that your cash value is accumulating much more slowly and you will be better off cashing the policy in and reinvesting this money.
Alright, looks like we probably have time for two more questions. Here's one from Ken.
Ken, the problem with owning physical gold is that it only keeps pace with inflation. Once you factor in the costs of storing the gold and transaction fees with buying the gold, you are losing money.
Thanks, Richard. Very glad we could help! The advisors are pretty great, huh? :)
Another way to look at protecting your purchasing power is to diversiy amoung different currencies. We are very concerned about US$ inflation which is why we believe that it is very important to invest in other strong currencies including Switzerland, Australia, Canada and the emerging markets economies which all have lower debt and deficits.
I'm not thrilled with gold as an inflation hedge. But other commodities (oil, agriculture, industrial metals, timber) and rental properties could do very nicely in a rising inflation enviironment. I would limit my exposure but include these categories in a diversified portfolio.
Alright, as promised, here is one final question.
Safest haven now seems to be the US as even when our bonds were downgraded, people flocked to them in droves. But I wouldn't count on that lasting. We put AT LEAST 30% of client equities into international markets (as well as diversify the bond holdings to include international) and that gives us some inflation hedge. Will all be the best? No. Will all be the worst? NO! Diversification in everything.
Opps I meant currency hedge (not inflation hedge)
Alright, unfortunately we are out of time for today’s chat. Matt, David and Bobbie, I cannot thank you enough for joining us!
Always very impressed by the advice you offer.
I have to sign off but have LOVED the interaction. Thanks to Kiplinger, the other advisors AND MOST OF ALL, the Kiplinger readers who took advantage of this good opportunity. Hope to see you next time.
Thank you all!! This was lots of fun.
We apologize to all the readers whose questions we didn’t have time to get to. Be sure to join us again in one month for our next live chat with NAPFA planners. So, mark your calendars for June 14!
We second what Bobbie had to say. Thanks to all our readers who joined us today.