Gold as an insurance against financial armageddon

Hey friends! Recently, I realised I have not been blogging about investing. So, I will like to share something I did before starting on my dividend investing path in 2009. 


Just a quick recap in case you are visiting my humble blog for the first time. I used to have a phobia of stocks, thanks to constant "scare tactics" and "brainwashing" by my conservative parents (who went through the Asian financial crisis). When Lehman Brothers' collapsed and the financial markets nosedived, I felt really relieved that I was not part of it. I just read the financial news everyday for fun and amusement. I even laughed at the plight of those greedy American banks. 


The Fed started QE1 and TARP. The US dollar depreciated. H1N1 was ravaging the global economy. There was extreme fear in the world markets. The world was on the brink of financial armageddon. So what did I do? I did something strange. Instead of picking stocks at historic low prices in March 2009, I bought 2 gold coins. o_O" I thought "Gold will always have value but currencies can become worthless overnight."


I bought the gold coins at the UOB main office. There was no queue at the gold-selling counter. People queueing up at the other counters were looking at me in a weird way. Hahahahahaha. They were stealing glimpses at the gold coins while I was choosing which ones to buy. Even the bank teller who was serving the queue beside me was fascinated by the coins.  But the female bank personnel serving me was rather nonchalant. Maybe she sees gold coins everyday until sianz liao. Or she can see but cannot take, even more sianz. Lol. The best part was that I was only wearing a cheap t-shirt, bermudas and sandals. Muahahahahaha! I dunno why, but I felt embarrassed. 

Half ounce Canadian Maple Leaf gold coin (~S$870, inclusive of GST)

Almost the same size as the 50 cent coin beside it. 

Half ounce Australian Kangaroo gold coin (~S$900, inclusive of GST)

The gold coin is much heavier. I can actually feel the weight on my hand!

I wanted to have a little insurance against financial armageddon. Experts suggest having 10% - 15% of one's portfolio in gold. For me, gold makes up about 2% of my portfolio. The price has increased quite a lot too. By the way, I love how the gold coins glitter. I can spend a good 10 minutes admiring and staring at them every day. I really dun know why. But I feel good and also a little more secured with some gold in my possession. Maybe there is really something special about gold that captures people's eyes and hearts.


So, do you have any gold in your portfolio? If yes, why? If no, why not? Comment below. ^^




Peace Out,
Dividend Warrior

Spending My Dividends - Movie, Food, Clothing

I know my previous post was rather depressing. All the terrifying consequences of a Greek default seem so real and possible. Let's talk about something more positive and cheerful, shall we?  

Retail therapy. Yeah! ^^

After receiving about $2K cash dividends last month, I decided to use a portion of it to reward myself a little. After saving most of the dividends to my opportunity funds, this is how I spent my dividends last weekend. Please pardon my sub-standard photo-taking skills.

I watched The Green Lantern. Awesome movie. Great effects. I love the moral behind the story. A person must always have faith and a strong will.

After the movie, I had lunch at the highly-recommended "Burger Bench & Bar". 

I chose the omelette & cheese beef burger, wif potato chips & root beer.

This is the best burger I have ever tasted! No kidding! 0_o

The buns are soft. The beef patty is juicy and tender. Yummy!^^

Price is around $12. Definitely value for money.

Warning: Once you tried it, you probably will not eat burgers from MacDonald's and Burger King, MOS Burger etc etc........

After having an unexpectedly satisfying meal (with a few burps at the end) >_<",

I went shopping at Burberry, iON Orchard.

Service was prompt. The sales personnel was polite enough.

However, the layout of the boutique is kinda confusing at first.

Managed to get the checkered collar polo shirts. ^^

Even the bag looks so stylish! Wow! Got ribbon some more. Nice touch.

I spent ~$500 in total. Within budget. I enjoyed myself thoroughly and it was money well-spent.

So, how do you usually spend your cash dividends?

 

Peace Out,

Dividends Warrior

Greek Debt Crisis - Europe's "Lehman Brothers" Moment

A Greek default will set off a chain of events similar to the post-Lehman Brothers collapse in 2008. Almost every country will feel the effects.

A very possible/scary scenario goes like this:
 

Several major European banks are big holders of Greek debt. If Greece defaults, these banks will suffer huge amounts of write-downs. Recently, major French banks were considered for a ratings downgrade. Germany and France are the 2 biggest holders of Greek debt.

Banks will be reluctant/scared to lend to one another. 

There will be a global credit crunch, a repeat of the post Lehman Brothers collapse in 2008.

Ireland and Portugal will just default too. Their governments will be thinking, "Since Greece is allowed to default, why should we suffer all the painful austerity measures?" The defaults of Ireland and Portugal will spread the debt contagion to Spain and Italy. Spain holds a relatively large amount of Portugal debt.

A global credit crisis will send the already weak US economy into another recession. US consumers will start to tighten their belts, spend less and save more, companies will start to cut jobs and spend less.

As Europe and USA go into recession simultaneously, China, who depends heavily on exporting to the Western nations will suffer a hard landing. This will trigger social unrest and even the burst of the property bubble in China.

ASEAN, being largely dependent on the US, China and Europe for economic growth will feel the brunt of this global financial meltdown.

In the mean time, I will be building up my opportunity fund and emergency fund. It is time to bunker down and wait for Greece to eventually default. USA also has a massive budget deficit of her own to deal with. Strap on your seat belts and hang on tight. Turbulent times ahead. 

Can your portfolio survive a Greek default? I dun think mine is strong enough though :(



Peace Out,
Dividends Warrior