Fears of financial chaos because of global terror have intensified with the threats of war from North Korea.
The tension has brought forth questions and thoughts about what will happen if there is some sort of major terror attack on the U.S.
A war would obviously affect economic conditions, possibly triggering a collapse. Many observers believe North Korean dictator Kim Jong-un is unstable and capable of carrying out his vows to strike nearby countries or U.S. territories with missiles.
Whatever the outcome, any kind of conflict could have devastating results on the economy.
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That’s why it’s important to secure your financial situation now.
These eight moneywise tips can protect you against the consequences of war or impending war:
1. Stay diversified in equities — History has shown that diversification of wealth in stocks has outperformed other investment techniques in times of war, according to WealthManagement.com. Index funds provide diversity by investing in equities within a market index, the most popular being the S&P 500. These investments have often provided a return higher than the inflation rate.
2. Work with a financial advisor — Get one who knows how to create a diversified portfolio for your particular needs. During times of impending war or economic collapse, you might still get hurt, but a professional planner may help you with an investment strategy that minimizes the damage, Liz Frazier Peck noted in Forbes.
3. Hoard real assets — War can mean increased funding for military purposes, which will cause an increase in printed money by governments, leading to inflation or hyperinflation, according to the Financial Samurai. Real assets maintain their value and may include everything from property, cars and precious metals to weapons, clothing, and canned food, depending on how bad times get.
4. Invest in gold or silver — A war could cause the dollar to crash and gold or silver to skyrocket. Global tensions and economic uncertainties, even without a war, could trigger a financial collapse. Well-known crisis investor and author Doug Casey told Future Money Trends in December 2016, “we’re going to have financial chaos in the years to come and that’s going to drive people into gold and to a lesser degree into silver.”
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5. Buy sovereign bonds — Buying government bonds provides a hedge against future economic uncertainties while also earning yields. Treasury and municipal bonds are positioned to rise during a sudden stock market crash.
6. Keep a cash emergency fund — Some financial advisors suggest having enough cash to last for six months, but whatever you can afford will help you get through a financial crisis at the onset of war. It will provide you with choices during times of temporary uncertainty.
7. Don’t sell everything — Panic can cause chaos in the markets. Think carefully and hold onto your hat and your investments as much as possible. The market has shown to be extremely resilient over the long term for continued gains you can use later on.
8. Keep documents in a safe place — In a time of crisis, people might not think about the future. But the world will continue and you will most likely need such documents as financial records, wills, birth certificates, and Social Security cards. Store them and other important papers in a safe place.
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