3 Assets Kiyosaki Expects to Prosper Amid Recession Fears
A recession is knocking at the door. The rising cost of raw materials, energy and labor has catapulted inflation to highs not seen in a decade. Central banks across the world are hiking interest rates to tame inflation, hurting business prospects. In the near term, businesses will get squeezed between the high cost of materials and labor and the rising cost of capital. Going forward, rising prices of products are likely to hurt demand, thus adversely impacting revenues. With the majority of companies likely to face these adverse conditions, a recession is likely.
Big Crash Awaiting!
Robert Kiyosaki, the author of the popular title Rich Dad Poor Dad, raised a warning that stock markets are likely to see the biggest crash in world history. Major investors also seem to factor in a recession, evident from the fact that major indices like the S&P 500 and Nasdaq are down more than 20% and 30%, respectively so far this year. Further crash in stock prices will wipe out more money from investors’ pockets.
Kiyosaki’s Advice on How to Become Rich
Kiyosaki had previously advised that crashes are good times to make wealth by buying beaten-down stocks with strong fundamentals. However, this time Kiyosaki is not recommending stock or bond investments. Rather, he is arguing for these three assets — precious metals, Bitcoin, and food and livestock.
Precious Metals: Kiyosaki argues that the price of precious metals like gold and silver are largely unaffected by economic events. He expects gold and silver prices to rally in the upcoming years. Although Kiyosaki prefers physical holdings of precious metals, investors can add these to their portfolio by buying exchange-traded funds (ETFs) focusing on precious metals. Top-performing gold- and silver-focused ETFs include iShares Gold Trust Micro ETF IAUM and iShares Silver Trust SLV, respectively.
iShares Gold Trust Micro ETF tracks gold price from the London Bullion Market Association and holds gold bullion. IAUM declined 9.3% till Sep 28 from December 2021-end. iShares Silver Trust is one of the leading silver ETFs and also one of the most publicly traded options to invest in silver. SLV lost 18.8% till Sep 28 from December 2021-end. However, with the rising inflation rate these precious metals may witness pent-up demand going forward, driving returns for investors in IAUM and SLV ETFs.
Bitcoin: Kiyosaki is bullish on the underlying technology of Bitcoin — blockchain— which he thinks has a bright future. Bitcoin is also the leading and largest cryptocurrency in the world. Any gain in a particular asset class is most likely to reflect in its largest constituent.
Food and Livestock: Kiyosaki notes that prices of food are going up amid shortages in supply. He advises investors to pay attention to this asset class as demand for food will always remain. He has invested in livestock as well. However, it will be difficult for a retail investor to own farmlands and carry out farming. They may look for companies focused on food processing and livestock farming to add them to their portfolio.
The Dairy Products market within the broader Food sector was ranked within the top 7% of the Zacks universe, reflecting strong prospects for the industry. Lifeway Foods LWAY is a dairy product company that gave a positive return till Sep 28 from December 2021-end even as the S&P 500 and other major indices plunged. Demand for LWAY’s products drove 15.5% growth in revenues in the first half of 2022 compared with the year-ago period. Lifeway Foods is likely to gain from any improvements in business dynamics as expected by Kiyosaki.
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Lifeway Foods, Inc. (LWAY) : Free Stock Analysis Report
iShares Silver Trust (SLV): ETF Research Reports
iShares Gold Trust Micro (IAUM): ETF Research Reports
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