Strategies for investing in inflationary and recessionary times

Investing Strategies for Recessionary and Inflationary Times

Hosted by

David Campbell

David Campbell

� Principal or key advisor in over $800 million in real estate transactions

� Apartments, office, medical, retail, hospitality, winery, condo-conversion, and production home building

� His companies have held real estate interests in California,

Texas, North Carolina, Delaware, Mexico, Canada, and Belize

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Why we do what we doWhy we do what we do

Our Philanthropy: helping other people live more

abundant lives by giving the knowledge and support

for others to invest with mental tranquility.

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DisclaimerDisclaimer

�� for educational purposes onlyfor educational purposes only

��NOT investment, legal, or tax adviceNOT investment, legal, or tax advice

��nothing sold on this nothing sold on this webinarwebinar

TodayToday’’s topicss topics

1)1) currency devaluation, why it's happening to currency devaluation, why it's happening to

you, and what to do about it.you, and what to do about it.

2)2) why the global recession will get worse and why the global recession will get worse and

which investments you absolutely want to which investments you absolutely want to

avoid!avoid!

3)3) how to leverage these "interesting times" how to leverage these "interesting times"

to your profitable advantageto your profitable advantage

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Currency = PriceCurrency = Price

Currency creates price confusion

$20,000$20,000

$30,000$30,000

$10,000$10,000

$40,000$40,000??????

??????

??????

??????

Price does NOT = ValuePrice does NOT = Value

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Exchange Value Not PriceExchange Value Not Price

Currency is just another medium of exchange

� Democracy is the unequal sharing of blessings

� Communism is the equal sharing of misery

- Winston Churchill

DemocracyDemocracy’’s Vicess Vices

True cost of government?True cost of government?

taxestaxesprintingprinting

velocityvelocity

True cost of government?True cost of government?

On August 15, 1971, the United States

unilaterally terminated convertibility

of the dollar to gold.

November 1955 - April 1975 (19 years, 180 days)

Unlimited spending = unlimited powerUnlimited spending = unlimited power

Until the Until the

partyparty’’s overs over

Taxes: reduces supply of currencyTaxes: reduces supply of currency

Printing: supply of currency influence over inflationPrinting: supply of currency influence over inflation

Velocity: consumer confidence influence over inflationVelocity: consumer confidence influence over inflation

YouYou’’ve been swindledve been swindled

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What do I do?What do I do?

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DonDon’’t panic!t panic!

WeWe’’ve been here beforeve been here before……

over and over again.over and over again.

1.Be wise when holding cash or paper investments2. Don’t buy bonds 3. Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)

DavidDavid’’s Top 10 Lists Top 10 List

1. Be wise when holding cash or paper investments

2.Don’t buy bonds 3. Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)


If prevailing rate goes DOWN, price of bond goes UPIf prevailing rate goes UP, price of bond goes DOWN

2012

1. Be wise when holding cash or paper investments2. Don’t buy bonds

3.Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)


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Positive ArbitragePositive Arbitrage

Borrow at 5% invest at 7%

2% profit

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Negative ArbitrageNegative Arbitrage

Borrow at 7% invest at 5%

2% loss

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Arbitrage ConfusionArbitrage Confusion

Borrow at ???% invest at ???%

???% profit

1. Be wise when holding cash or paper investments2. Don’t buy bonds 3. Get fixed interest rate mortgages.

4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)


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Exchange Value Not PriceExchange Value Not Price

Currency is just another medium of exchange

1. Be wise when holding cash or paper investments2. Don’t buy bonds 3. Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money.

5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)


Medical Office

Low end retail

(price of gas?)

Modest Housing

1. Be wise when holding cash or paper investments2. Don’t buy bonds 3. Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy.

6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)


Bought IBM stock @ $10

Sold IBM stock @ $15

$20,000

2000 shares

$30,000

2000 shares

Bought IBM stock @ $10

Sold IBM stock @ $15

$20,000

2000 shares

$30,000

2000 shares

Buy @ $20,000

Sell @ $30,000

PROFIT: $10,000

Less Tax: $2,500

NET PROFIT= $7,500

NET CASH = $27,500

NO ENOUGH FOR A CAR

Expenses paid

by tenant

Rent indexed to

inflation

Mortgage repaid

with devalued

currency

$500,000 mortgage

$25,000 car

20 cars

$500,000 mortgage

$50,000 car

10 cars

1. Be wise when holding cash or paper investments2. Don’t buy bonds 3. Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits.

8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)


1. Be wise when holding cash or paper investments2. Don’t buy bonds 3. Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering

9. Reduce dependence on things rising rapidly in price (gas / food / imports)10. Buy goods rising less rapidly in price (eg, housing / exports)


1. Be wise when holding cash or paper investments2. Don’t buy bonds 3. Get fixed interest rate mortgages.4. Invest in durable goods or commodities rather than in money. 5. Invest in things that people will use in any economy. 6. Invest for long-term capital gains, 7. Avoid short term investments that give deceptive sense of making profits. 8. Learn about bartering 9. Reduce dependence on things rising rapidly in price (gas / food / imports)

10.Buy goods rising less rapidly in price (eg, housing / exports)


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Strategies for investing in inflationary and recessionary times

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