I think I'll chime in on this one since investing is what I do and I get this funny twitch in my right eye when the majority of what I see is 'real estate' and 'gold/silver'.
How did you feel about your gold when it was down over 50% recently? How did you like your real estate when it lost 30% of it's value in 2007?
Firstly let's note, there is risk to everything! CD's, real estate, gold, stocks, mutual funds, cash under your mattress, it doesn't matter. No risk, no reward. The question is, what risk are you comfortable taking and what do you want/need out of the investment.
Secondly let's note, stocks are not inherently evil just because there are bad people in the world. Remember, there are thousands of stocks in the world that are operated by people just like you and me who go to work to put food on their table, clothes on their backs, and a roof over their family. They work, make the company money, the company stock goes up. Investors get rewarded for allowing those companies to hire workers and do business.
So, to get to the original question, what will hold it's value in the second great depression? Well, we've had that already, it was 2008. And if you were in stocks, what happened to you? You had a bad year. But, if you just held on to your pants, you were back to breakeven in just a couple years. Not a big deal. Just takes some patience and discipline. But some might ask, why take that chance anyway? The answer, because stocks actually do great over time. In fact, the returns are phenomenal. The problem most people have is they behave badly and panic when they should sit tight and buy when they see things doing well (usually that means too late) and they get no where near the market rate of return (reference the annual QUIB study by Dalbar). Long story short, invest like you garden. Recognize what you can and cannot control. You can't make something grow. You can't make something fruit. But, you can cultivate the garden. You can set the right conditions for growth. You set up swales and hugel beds for a framework to work in just like you should set up a framework for investments (I'll say a bit more on that in a sec). You can let animals do a tremendous amount of the work for you just like you can hire an appropriate and knowledgable financial guy to help you. You can use polyculture so each plant works together for a beneficial system just like you can diversify 'traditional' investments like stocks/bonds/real estate/commodities so you can reduce volatility and increase return at the same time (reference Modern Portfolio Theory). And then you reap the benefits.
Remember, you reap what you sow! But it's always later than you sow. And usually more than you sow. To everything there is a season, but it doesn't mean you should be afraid of the season. The markets will go up and down in season. Those seasons are simply less predictable than winter and summer. Don't be afraid of winter, just plan well and wait for spring.
By the way, for credibility, I've advised on over $400 million in my career. I've seen every investing method under the sun. What I'll suggest to you is, a good advisor will keep you out of trouble, keep you disciplined, keep you out of high cost investments, be incentivized to grow your account (no commissions), and suggest you invest following the Nobel prize winning economist that developed Modern Portfolio Theory and Multi-Factor Model. If you don't know what that is, realize you don't know what you don't know and ask for help. I can say more if anyone wants but my post is already long enough
May you enjoy good harvests!
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