"I am more concerned about the return of my money, than the return on my money."
To create wealth requires a combination of skill, timing, risk taking, a bit of luck and a lot of hard work. As wealth grows its preservation and enhancement also become management considerations.
Fortunes have been lost, or worse, by investors who have not considered historic, economic and geopolitical perspectives when managing risk and protecting wealth.
Matterhorn will assist investors in evaluating all the risks, be they financial, economic, political or geopolitical. We also assist investors creating an investment plan that evaluates these risks and identifies the safest investment instruments as well as doing business with the safest possible banks.
Wealth Planning must contain two vital elements namely Wealth Preservation and Wealth Enhancement.
The current problems in financial markets and the high level of volatility in most asset classes require investors to maintain the utmost vigilance against risks that the world has not experienced for many decades. In the USA and Europe, central banks are flooding the market with liquidity in order to prop up a banking system which is fighting for survival. Many major as well as smaller banks are virtually bankrupt but are being kept alive by central banks for systemic reasons. In the last few decades, investors have not had to worry about the safety of banks. Today, this is an essential part of Wealth Planning. It is not a question of major banks being too big to fail. Any bank can fail. Also, investors need to understand that risks are not just linked to deposits of funds. Equally important is the custodial risk. If a bank fails an investor might not get access to his assets such as equities, bonds or precious metals held by the bank as custodian. Historically, even with a small percentage, gold has provided that critical balance with a very low correlation to rates and equities. It is extremely important to have a wealth preservation plan which considers all risks, be they financial, economic, or geopolitical. A precious metals strategy is a vital part of this plan too.
The first priority must always be Wealth Preservation and there are times especially during economic downturns when this is the primary objective. But even during downturns in the economy there are many investment sectors that outperform the stock market. During the last ten years, for example, the Dow Jones index has declined nearly 80% against gold. In the next few years stock markets may not give anywhere near the theoretical returns seen from 2009 to 2016 and at worst decline substantially in real terms. On the other hand precious metals as well as certain commodities are likely to re-appear as safe haven territory. Thus it is essential to understand that owning a balanced portion of precious metals besides the traditional investment allocations to cash, stocks and fixed income will actually improve the overall result of a typical portfolio and enhance one's wealth.