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Cash is King - For Now!

by , 29 April 2020
Cash is King - For Now!
Over the long-term cash isn't the best investment, it underperforms in times of economic prosperity. And impacts portfolio returns as it barely keeps pace with inflation. But in times of increased uncertainty and a stock market sell-off like we've just experienced…

Cash is King… Its value is less volatile than riskier assets. But you should be ready to deploy the cash when the time is right.
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The most anticipated event in the crypto world in 2020 is coming next month…
 
I'm talking about the “Bitcoin Halving”.
 
You might be familiar with this massive event…But simply, “Halvings” have been a boon for bitcoin investors in previous years.
 
For instance…
 
After the 1st halving in 2012, Bitcoin soared to over $1,000, in just 12 months - a +7,000% gain!
 
Then following the 2nd halving in 2016, Bitcoin rallied 300% in just 12 months.
 
The next halving is scheduled for May 2020...Take a look at what you could be in store for here…
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Keep a cash buffer to accumulate on the cheap
 
Although the markets have bounced around 20%. It will not last. There will be another wave of selling pressure. Analysts and economists are still trying to model where next for the market and shares.
 
Economic activity has ground to a halt but as lockdown restrictions are gradually lifted it will be slow going to get up to speed.
 
The global recession we will endure might not be as long on paper as previous ones due to record stimulus measures. But it will change the behaviour of everyone.
 
Consumers will no longer be willing to borrow for frivolous spending. Individuals will embrace technology to empower them to do more with less. To help them modify their spending and saving behaviour.
 
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Important: If your portfolio has plummeted thanks to the Covid-19 crisis, you should look at how to give your portfolio, the “Hedge Fund Advantage”.
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Technology enabled companies will thrive
 
Once the dust settles, which is expected to be in the third quarter, the growth outlook will improve, investors will rotate out of lower risk investments into higher risk investments. The greatest returns will be made by investing in technology enabled companies that can adapt and thrive in times of crisis. Companies that can manage their risk geographically and domestically.
 
They say ‘Necessity is the mother of Invention’, this pandemic and the resultant lockdown has created an adapt or die reality that many businesses have no choice but to try adapt through.
 
And technology is the best enabler…
 
The easiest investments are companies with enabling solutions. With less face to face meetings, companies will be dependent on contract verification and signing solutions from Docu-Sign and its competitors.
 
We previously tipped it as a buy below $90.00 and its up 20%.
 
Docu-Sign authenticates the electronic signatures to ensure the signing is valid. Docu-Sign is a strong cash generative business with growing positive free-cash flows over the past three years.
 
Investors can accumulate Docu-Sign below $100 for the long term.
 
See you next week.
 
Gavin McCarter,
Contributing Editor, Money Morning


Cash is King - For Now!
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