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SPOTLIGHT
Stock market's silver lining
When the going gets tough, the tough go shopping for stocks. Right now there's a fire sale, says this PBS TV host.
Growing your bottom line

Spotlight: Consuelo Mack

Where would you not invest your money today?

Financial fallout
Cause of stock market crash
Real estate bubble
Great Depression reprise?
World markets
Shadow banking system
Bear market lessons
Risk of stagflation
Fixing retirement accounts
Domestic vs. foreign stocks
Investing in gold

I think you need to be invested everywhere and you need to own some of everything. Maybe, today, Treasuries have become some of the most overvalued of investments. But today there isn't a place where I wouldn't invest money.

Peter Bernstein is a risk expert, a market historian, and he wrote "Against The Gods: The Remarkable Story of Risk." And he said that you aren't truly diversified until you own something you're uncomfortable with. So I think that you need to have representation in every asset class as an investor, and I think that there are many more places today that represent great value over the longer term than we've had in decades.

What do you think of those who are touting gold as "the safest and best investment for the future"? Is it wise to own bullion, a Gold ETF or a precious metals and mining mutual fund?

Top money managers like First Eagle Fund's Jean-Marie Eveillard look upon gold as a hedge against disaster, against an extreme outcome. But normally, gold doesn't pay you any interest and, traditionally, it used to be very expensive to own bullion. You had to insure it; it had to be stored somewhere. Today, with the Gold ETF, individual investors have an accessible and liquid way to invest in gold. So I think that everyone should put about 3 percent to 5 percent of their portfolio in gold. Now, when everything else is doing well, realize that gold is going to do terribly; but owning some gold provides you with a little bit of an insurance policy, so I'm a believer in owning a small amount of gold.

As far as owning a precious metals and mining fund, well, that's a whole other issue because then you're dealing with investing in mining companies, which are usually located in troubled parts of the world. And owning precious metals and mining stocks or funds takes you in another direction in terms of risk and other considerations.

What advice do you have for the typical American?

I know it sounds like such a cliché, but my advice is to think longer term, to stick with your investment plan, and to look beyond the current crisis and to recognize that the U.S. economy is resilient. The world economy is resilient. We will grow again and there are tremendous opportunities to be had when businesses start growing again. And you wouldn't want to miss out on that upswing.

-- Posted: Dec. 5, 2008
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