When it comes to assets I believe that if you don’t hold it then you don’t really own it. In a perfect world we would all trust various Custodial Services to hold (and manage) our assets for us but this is pretty far from a perfect world. Therefore it’s important to understand the Counterparty Risk you might be taking when you trust someone else to hold your assets for you. This is why I prefer to hold Physical Gold and Silver instead of paper representations of it, but even so the secure storage I use has some risk in it too. My Crypto I hold on an offline Cold Wallet and there is some risk in that also…..yet I consider these fairly small risks compared to trusting a big soulless Corporate Financial Institution or Government with my Life Savings.
Sometimes those big Counterparty Risks can’t be avoided (cheaply) and Superannuation is one of those situations. In Australia and many part of the world, Superannuation is just something everyone needs to have. By Law. So unless I am willing to try and manage an expensive Self Managed Super Fund I have to accept that there is some risk in holding my Superannuation with a big Corporate Financial Institution. My thinking is that if I am taking that risk then I may as well take on the correlated risk of owning some paper Gold and Silver. That’s why I hold Gold and Silver ETFs and some Gold Mining Shares in my Superannuation Fund.
For a long time I have doubted whether I’ll ever get to see my Superannuation wealth because of the risks that in a financial crisis there will be a Default, Bail In or Government Confiscation. I figure that if my paper assets go belly up then my financial institution probably goes along with them, which is why I see all this risk as correlated. However there is another scenario that I think is increasingly likely and that’s the Hyperinflation one. In that scenario the paper assets and financial institutions probably survive, but how much are my assets going to be worth in the end? Well, if that’s the scenario then I just need to choose paper assets that will survive in a Hyperinflation scenario. That’s the other reason why I hold various forms of Paper Gold in my Superannuation.
What about you? Do you hold any Paper Gold or Silver assets? What do other stackers hold in their Superannuation (401k) accounts? Do you think it’s worth the effort and expense of trying to self manage Superannuation?
