How to Protect Wealth During Turbulent Times

In uncertain times, protecting one's wealth becomes particularly important. Here are some key pieces of advice:

1. Geographical location is crucial

Choosing the right geographical location can determine the safety of property and even life. There are many historical cases that show the fate of different regions can be drastically different:

• During World War II, a family was scattered while fleeing; all those who went to France perished, while those who went to Portugal survived.
• In 1943, some Nazis began to transfer funds to South America instead of Eurasia or the United States.
• When the Soviet Union collapsed in 1991, many residents went bankrupt overnight because all their assets were concentrated in their home country.

2. Maintain keen observation and independent judgment

Even in an information-restricted environment, strive to observe details and assess the direction of the situation:

• In 1942, Nomura Securities sensed that Japan might be defeated by observing details such as food shortages and the dismantling of palace fences. They gradually sold stocks and shifted to investing in real estate to prepare for post-war reconstruction.
• In contrast, many Jewish families in Germany in the 1930s had too much trust in the state and missed their chance to leave. By the time they realized the danger, it was already too late to transfer assets or leave.

3. Avoid betting on a single asset

Diversification is crucial:

• Even Churchill suffered a margin call in 1938 due to going all in on the US stock market in 1937.
• Jewish wealthy individuals in Germany ultimately suffered heavy losses due to their assets being overly concentrated in Germany.
• The lifespan of modern enterprises is becoming shorter, with the average time of S&P 500 constituent stocks on the list reduced from 35 years in the 1950s to the current 10-15 years.

4. Beware of "Custody" Risks

In significant changes, property rights documents may become invalid. Bank deposits, precious metals, real estate, etc., are essentially "third-party custody":

• During World War II, the estates of Polish nobility were confiscated by Germany and could not be reclaimed after the war due to changes in government.
• In recent years, the assets of some wealthy individuals from certain countries have been frozen in other countries.
• During World War II, the United States froze and seized Japanese assets in America, including the property of Japanese American citizens.
• In 1945, Yugoslavia stripped all Germans within its borders (, including civilians ), of their nationality and property rights.

5. About Precious Metal Custody

Self-custody is often safer than third-party custody:

• During World War II, the gold stored in French banks was confiscated by the German army, while the gold that was buried by individuals was preserved.
• Some families convert part of their wealth into gold coins for safekeeping, making it easier to use during turbulent times.
• In 1939, many families in France converted 20% of their wealth into gold, either storing it in Switzerland or burying it themselves. However, trading gold still faced many risks.

In conclusion, history shows that turmoil is the norm, while peace and prosperity are the exceptions. Suggestions:

1. Do not concentrate all assets in one investment; diversify across asset classes, geographic locations, and custody methods.
2. Prepare for the worst and don't have a mindset of taking chances. When the situation deteriorates to the point where everyone wants to leave, it is often too late.