Five Reasons to Pay Attention to Your Financial Assets

(1) In the past, here on Zaadz, there has been a minimal response to my posts concerning financial forecasting and investing. But, because this topic happens to be one of my passions, today I am going to present some reasons why you would benefit from focusing more on this important area. In one of my first blogs last February, I stated what I believe is the single best reason for paying attention to the markets:

I began to realize that I could no longer create a dichotomy in my own mind between my "lofty" metaphysical interests, and the "crass" world of finance. I came to understand that, in a tantric sense, they are one in the same. I began to realize that the financial markets are the blood and muscles and bones of the planetary body of the human community. In a sense, I realized that the financial markets were sacred temples of the spirit - just as the human body is also a sacred temple of the spirit.

Of course, there are many other reasons that are also very important.

(2) In a survey conducted in 2004, 42% of the respondents indicated that they were not saving anything at all for their retirements. And, in a different survey in 2005, 83% of respondents recognized that they were not saving enough. 95% of Americans have financial fears about retirement. With the baby boom generation now about to reach retirement age, this lack of saving will create an enormous pressure on our economy.

But, many other pressures on the economy also exist.

(3) The United States, formerly the world's largest creditor nation, is now the world's largest debtor nation. We are currently running a trade deficit of more than $700 billion dollars a year.

(4) Currently, we are able to fund our deficit spending because of the strength of the U.S. dollar, which is recognized as an international currency. Other countries need dollars, for example, to buy oil. So, they are happy to accumulate U.S. dollars. Their desire to do so is a major factor creating a demand for dollars, and keeping the value of the dollar relatively high. But, as the U.S. accumulates more debt, many foreign countries are slowly phasing out of their dependence upon the dollar. As the dollar continues to lose value, the goods and services that we purchase (particularly from abroad) will become increasingly expensive.

A good indication of this trend is the rising price of gold over the past several years, as charted below:

(5) During the same five-year period that gold stocks have risen so dramatically in price, the other stock market averages (Dow, S&P 500, Nasdaq) have gained virtually nothing.

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