Question Investing & Investments during crisis

[DrJonesUSA]

VOO go up. VOO goes down, buy extra VOO.

That’s it. That’s the plan. Invest regularly and often in an index fund, and buy more if possible during a market downturn.

Or VTSAX. I read a book called “The Simple Path to Wealth” by JL Collin’s & he made a similar - very compelling - argument. Just buy VTSAX (you are basically buying a slice of the ENTIRE market; no better diversification possible) and just leave it be. Add to it, check on it periodically, but don’t play with it. Extremely compelling idea. I chose to act on it. Wish I would have done it sooner, but oh well….

 

[DrJonesUSA]

I think the gold money has already been made.

Then why have virtually all central banks been buying it as if there’s an apocalypse coming, for the past 10+ years? Why have central / reserve banks ALWAYS hoarded gold? Central / reserve bank buying of gold has drastically increased over the past 10+ years.

 

[DrJonesUSA]

I thought the below might be interesting to share here.
Please note, it is 100% a.i.-generated and as such, should be trusted accordingly.

However, the a.i. response below does comport entirely with my personal research undertaken over years & years; research I did without any a.i at all.
I was led to these exact same conclusions as laid out below.

I do not in any way consider myself an “investor” but even I was terribly concerned when the US Gov printed over 40% of all US dollars in existence within a year, during the pLandemic.

My intensive research led me to physical gold & silver.

I purchased some in 2020-2022, and Suffice it to say that I’m very happy with my choice. (Look at the price of gold & esp. silver over the past 5-7 years)

Could I have made more in the stock market? Maybe…maybe not….
For me, at the time, I felt the risk of ANY dollar-denominated asset was too high, so I bought physical gold & silver.
I felt the “maybe not” far outweighed the possibility of further potential paper profits.

Plus I’ve always wanted to own some. Someone made a hysterical comment about “you mean, I can collect real gold & silver coins like an actual pirate & it is considered a sound investment strategy!?!?”

Gold & silver ARE far more tangible & fun than stocks too, I’ll tell you that…

Anyhow, below is my prompt / query to an a.i. bot & its response, which I thought you’d all find interesting (and again; my independent, NON-AI-assisted research confirms all this as true)



My prompt:
“Is it true that central / reserve banks have significantly increased their purchases of gold over the past 10-15 years and what does this mean for average people and the economy at large? Do they see something coming that we do not?”

Ai RESPONSE: (AGAIN: AI GENERATED, 100%):
Yes, it is entirely true. Over the past decade - and especially since 2022 - global central banks have been buying physical gold at unprecedented, record-breaking levels.


Between 2010 and 2021, central banks purchased an average of 400 to 500 tonnes of gold per year. However, over the past four years, that pace doubled to an average of over 1,000 tonnes annually.


What Do Central Banks "See" That We Don't?


Central banks are not day-traders speculating on price spikes; they are structural institutions managing multi-decade risk. Their aggressive accumulation of gold signals a few major shifts in the global financial system:

1. The Weaponization of the US Dollar: Following Russia's invasion of Ukraine in 2022, Western nations froze roughly $300 billion of Russia's foreign exchange reserves. This was a watershed moment for non-Western central banks (particularly China, India, and emerging economies). They realized that storing national wealth in foreign currencies (like USD or EUR) in overseas accounts carries severe political risk. Gold held domestically cannot be frozen, sanctioned, or defaulted on.
2. De-Dollarization Trends: Central banks are intentionally diversifying away from the US dollar. While the dollar remains the primary global reserve currency, nations want to reduce their dependence on American fiscal and monetary policy.
3. Escalating Geopolitical Fragmentation: Broader economic policy shifts, trade conflicts, and military tensions have made traditional, paper-backed financial assets feel less secure. Gold is the ultimate zero-counterparty asset—it isn't dependent on any government's promise to pay.
4. Unprecedented Sovereign Debt: Major Western economies (including the United States) are carrying historic national debt loads. Central banks recognize that governments may eventually rely on inflation or currency debasement to service these debts, making real, physical assets far more attractive long-term hedges.

What Does This Mean for the Average Person?


While central bank reserve shifts happen behind closed doors, they trickle down to everyday life:


1. Sustained Inflation Pressure


Central banks are accumulating gold partly because they anticipate that keeping global inflation near historical low targets (around 2%) will be increasingly difficult. When central banks hedge against inflation, it signals that everyday living costs—food, energy, housing—are likely to remain sticky or volatile over the long haul.


2. Eroding Purchasing Power of Cash


The rush to gold is an implicit admission that fiat currencies (dollars, euros, pounds) are losing purchasing power faster than in previous decades. Leaving large amounts of excess savings in standard bank accounts yields negative real returns after accounting for inflation and currency debasement.


3. Higher Gold & Precious Metal Prices


Massive institutional demand from central banks has created a structural floor for gold prices, pushing them to historical highs. For regular people, this means gold, silver, and commodities have become noticeably more expensive to acquire as personal hedges.


4. A Shift in Personal Financial Planning


The takeaway for individuals isn't to panic or copy central banks by dumping all assets into gold. Rather, it highlights the importance of real asset diversification:

• Equities & Real Estate: Businesses with pricing power and real estate typically adjust better to long-term inflation than cash or low-yielding bonds.
• Inflation Hedges: Many investors allocate a small percentage (e.g., 5–10%) of a balanced portfolio to gold or commodities as insurance against extreme tail risks or geopolitical shocks.
• Debt Management: High sovereign debt levels often translate to higher long-term borrowing costs, making fixed-rate mortgage or debt management crucial for personal stability.

 

[Sheepdog1968]

Please help me understand;

In theory I agree that land is one of the best investments one can make. It is cliche but objectively true that “they aren’t making any more of it.”
Additionally; look at how many people have become extremely wealthy specifically because of real estate, and/or how many very wealthy people absolutely park a lot of cash into real estate to safeguard their wealth.

That said; for someone who isn’t already wealthy; how DO you - on a very practical, nitty-gritty, daily basis; how DO You afford land?
I’m not talking commercial nor residential real estate; that’s obvious. They (should) cash flow or could be made to with some work & investment.

But raw land as you refer to where you can hunt, grow food, etc; how do you bear the costs of property taxes - which can be very significant - as well as handle maintenance & upkeep costs?

Stuff as basic as fencing; you need to either do the work yourself - and buy materials, which isn’t cheap - or pay someone to do it for you.
I’m sure there are all sorts of other costs associated with raw land that I’ve forgotten about; various permits & junk.
Oh; wells…. Where do you get water? How do you pay for that? Wells are not cheap to drill nor maintain.

Can you please help enlighten me on this?
I’ve always wondered about it.

You have to save hard (Dave Ramsey can help you with how to do that). Do a career/trade that pays well and choose wisely where you live. Wells cost money no doubt. Yes, there is property tax and other expenses but that is part of your budget planning. Raw land in my mind is what helps if the world/stock markets go sideways. You have what you need to live. Learning to do it yourself will save you a ton of money and most of it isn’t that hard to do once you learn. In my 20s I was poor. Studied hard and worked hard so in my early 30s I could buy my first home. It was tough but doable. Now in my late 50s, I don’t worry so much about any of this. It gets much easier if you do things right and get a career that pays well. My 20s-40s were a lot of hustle and working two jobs. It’s paid off. Now, I know plenty of folks who took lost of nice vacations, owned the latest electronics, etc. They will be working much longer. It felt impossible when I was young but if you budget well and keep at it, it will happen.

Speaking of saving hard. Poke around the internet to find Charlie Munger talking about the importance of saving the first $100.