Panic is Not Always a Bad Investing Strategy The Daily Bell describes the plight of investment advisers: These are not happy times for investment advisers. While it is true that stock markets have not entirely collapsed following the financial crisis of 2008, the headier estimates of equity advancements have been discarded. With the US in a permanent slump and Europe headed into an ever greater depression, only Asia (and China in particular) are holding up the world’s economy. The probabilities favor the fact that the majority of investment advisers have little understanding of what is happening. They know how to assuage your fears, with phrases like “investing for the long-term,” “don’t be scared out now” and “markets always come back.” These bromides work in normal times. We ain’t in normal times! My personal opinion is that most of these advisers are sincere, just not particularly bright. They are trained to manage you — their client — whether times are good or bad. The advice they provide has always worked (oh, there may have been a few exceptions like 1929 and a couple of other periods). Unfortunately, they have no way to identify when the exceptions are coming. The Daily Bell article explains in more detail why this may be the case. Few are equipped, even if they know that this is one of those exception times, to supply proper advice. Turning points or “changes in the way the world works” requires a recognition that old methods likely no longer apply. Investment advisers in the 1930s were providing the same calming bromides to their clients as you hear today. Even so-called geniuses like John Maynard Keynes and Irving Fisher were embarrassed by their predictions and damaged financially by following them. We may be at another one of these turning points that is not able to be handled by advice that may have been prudent for half a century. David Galland believes we are: Lost in all the noise, however, is any recognition that the US monetary system – and by extension, that of much of the developed world – may very well be on the verge of collapse. Falling back on metaphor, while the world’s many financial experts and economists sit around arguing about the direction of the ship of state, most are missing the point that the ship has already hit an iceberg and is taking on water fast. Yet if you were to raise your hand to ask 99% of the financial intelligentsia whether we might be on the verge of a failure of the dollar-based world monetary system, the response would be thinly veiled derision. Because, as we all know, such a thing is unimaginable! Think again. Sometimes staying calm and following the tried and true rules is not appropriate. At critical change points, panic and running for the hills is sometimes the best strategy. We may be at one of those points.