Smart ways to invest and attain early financial freedom

  1. I see that Gold and silver are touching new highs globally – Gold has appreciated 5% in April alone.
  2. I also see that even though crisis in  Japan and Middle east has overshadowed the Euro area debt crisis – it is far from over - and now it is the turn of Portugal to seek help from IMF and EU. I also see that Greece is close to defaulting on it’s debt obligations and it could end up in Greece  exiting the European Union. (http://www.telegraph.co.uk/finance/economics/gilts/8461745/Greece-forced-to-pay-sky-high-rates-to-borrow.html)
  3.  I also S&P downgrading the US credit rating from stable to negative – Credit rating agencies had till now been unwilling to downgrade the US – but as we all know, the US Fed has been doling out US dollars through stimulus packages and that has put a massive strain on the Government finances and the fiscal deficit has gone up eventually resulting in this downgrade.  (http://www.bloomberg.com/news/2011-04-21/u-s-tried-to-dissuade-s-p-from-outlook-change-wash-post-says.html)
  4. This week Obama has openly said that US finances are unsustainable (http://www.bloomberg.com/news/2011-04-20/obama-tells-facebook-audience-that-nation-s-finances-are-unsustainable-.html?cmpid=)
  5. I also see Indian markets going up and down every fortnight –BSE Sensex was 20450  on Jan 1st, went down to  17500 on 9th Feb,  went up to 18200 on 18th Feb,  dropped to 17500 on 23rd feb,  again went up to 18200 on 3rd March,  again dropped to 17850 on 18th March, then went up to 19380 on 1st April,  and down to 19071 on 18th April and currently hovering at 19171 as of 20th April – It looks kind of limp – low on energy –kind of directionless.
  6. I also see inflation remaining high in India (http://www.livemint.com/2011/04/21115535/Food-inflation-rises-to-874.html?h=A1) and I see RBI having increased the interest three times in the last four months.
  7. I see the Crude price fairly steady at $120 plus - at this level it is dangerously high for Indian economy and I do not see the unrest in Libya, Yemen and Syria is not going to be resolved in a hurry. (http://www.oilnergy.com/1cashpet.htm#brent)
  8. I also see that India’s GDP growth slightly downgraded due to concerns about Inflation (http://www.indianexpress.com/news/montek-spikes-indias-growth-at-under-9/776700/).
So where does one invest in these uncertain times?
There are predictions that Gold will go up and up as the US economy is in fairly fragile state and the solutions being tried by US Fed is not in the right direction. Also it will take a long time for the US economy to get back in positive territory. Due to this, the investors are flocking towards commodities and hence Gold and Silver prices are going up and up – will it go up further is the question?
I believe that the Gold /Silver prices will further go up as there is limited supply and increasing demand from investors globally – till the economy in US and EU stabilise (and that is some time away) – the demand and price for Gold and Silver will keep going up.
So where do you think we should park our money as of now?

Author Description

S. G. Raja Sekharan

S. G. Raja Sekharan is a visiting MBA faculty, a mentor to budding entreprenuers, a wealth management consultant, an author of a book on Investing in India and the author of this blog.

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