Navigating Distrust: How to Hedge Investments in Uncertain Times

Here's a written version that summarizes his thoughts:

Recently, I was soaking up the sun and meeting with some seriously interesting folks at the Future Proof conference in Huntington Beach, California. Imagine a conference right on the beach? Take note conference organizers, we would all rather be on the beach!

Image from the Future Proof Festival 2024 Credit: Barry Ritholtz

One thing that really stood out to me was an undercurrent of distrust that everyone seemed to be casually shrugging off. It's like we've just accepted that we can't trust anyone anymore. From the president to the election process, AI to the media or the police, it's a long list that people just don't seem to believe in.

Is it because of all the fake news floating around online? Or maybe it's because the rich seem to get richer while many struggle to make ends meet? For example, since 1978 CEO pay rose over one thousand percent vs 24% for the average worker, while prices increase.

CEO pay increase vs. the average worker. Source: Economic Policy Institute

And let's not forget about that insane credit card debt that's got people feeling trapped with an insane average annual rate of 28%, and revolving debt over $8K.

Average credit card interest rate by card type. Source: Forbes Advisor

That’s coincidentally about the same amount as the median savings for Americans, What about our inconceivable national debt, or are people afraid technology will take their jobs? All of it.

No wonder people are turning to gold and cryptocurrencies. You can even buy gold bars at Costco now.

Source: Costco website

How is that for an indication that Americans are feeling unsettled?

With a constant stream of negative news coming at us, it's no wonder people feel a sense of overwhelm. It's time to take action. Even if everything turns out okay, being able to tell your clients that their investments are hedged should things go sideways is a powerful message that can help them see beyond their fear. Be prepared, don’t wait for a wave to hit your sandcastle.

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