Gold
Kiyosaki first bought gold in 1972 when it was trading at US$50 an ounce.
Today, the yellow metal trades at roughly US$1,800 an ounce, and he's still acquiring it.
“I’m not buying gold because I like gold, I’m buying gold because I don’t trust the Fed,” the author said.
He has a point. Over 35 per cent of all U.S. dollars in existence were printed in 2020. Gold, on the other hand, can’t be printed out of thin air like fiat money. Moreover, its value is largely unaffected by economic events around the world.
And because of the precious metal’s safe-haven status, investors often rush toward it in times of crisis, making it an effective hedge.
There are many ways to play gold. You can own gold bullion. You also can get exposure through ETFs like SPDR Gold Shares. Or, you can look at gold mining companies.
When gold prices go up, miners earn higher revenue and profits, which tend to translate to higher share prices. Companies like Barrick Gold, Newmont, and Freeport-McMoRan typically do well during tough times for other sectors.
If you prefer to stay away from picking individual stocks, you might build a low-risk income portfolio just by using your "digital nickels and dimes."
Silver
The gray metal may not seem as exciting as gold, but it could be an even better opportunity given its price action.
“Silver has always been the best, it’s still 50 per cent off its all-time high, and they keep using it for industry. It’s an industrial metal,” Kiyosaki said.
Just like gold, silver can act as a store of value. But it’s more than just a safe haven asset.
Silver is widely used in the production of solar panels. It’s also a critical component in many vehicles’ electrical control units. The industrial demand — plus the hedging properties — makes silver a very interesting asset class for investors.
You can buy silver coins and bars. ETFs denominated in Canadian dollars, like Horizons Silver ETF, provide another way to gain access to the metal. And of course, there are plenty of miners well-positioned for a silver price boom.
Companies including Pan American Silver, Wheaton Precious Metals, and First Majestic Silver should provide a good starting point for some research.
Bitcoin
If you’ve followed the price of Bitcoin over the last few months, you know that crypto investing isn’t always smooth sailing.
After soaring above US$68,000 on Nov. 10, Bitcoin has fallen back to around US$50,000.
That said, long-term holders — including Kiyosaki — are not complaining as the price of the world’s largest cryptocurrency is still up more than 100 per cent over the past 12 months.
“Bitcoin going up and down? I don’t really care because my entry point is $6,000,” Kiyosaki said during the interview.
Back in October, the author tweeted that the future of Bitcoin is “very bright.”
Investors can buy bitcoins directly. Today, many exchanges charge up to 4 per cent in commission fees just to buy and sell crypto. But some investing apps charge zero per cent in commissions.
Companies that have tied themselves to the crypto market present another option to capitalize on the crypto boom.
For instance, software technologist MicroStrategy has built a stash of close to 122,500 bitcoins. Electric vehicle giant Tesla holds around 43,200 bitcoins.
Then there are picks-and-shovels plays like Coinbase Global, which runs the largest cryptocurrency exchange in the U.S.
Another alternative
While Kiyosaki likes gold, silver, and Bitcoin, he didn’t say that they’re immune to market downturns.
If you want an asset that has little correlation with the ups and downs of the stock or crypto market, there is one more asset you may want to consider: fine art.
Contemporary artwork has outperformed the S&P 500 by a commanding 174 per cent over the past 25 years, according to the Citi Global Art Market chart.
And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.
On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.
Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich, like Kiyosaki. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.
