AssetBuilder Inc. Registered Investment Advisor - Simple Investing. Smart Future.

Scott,

I have been casually following the Cassandra's of Peak Oil (production peak currently predicted to happen around 2010) and the inevitable slow but steady 'decades long' decline of the equity markets and our overall quality of life they are predicting. While I can see the cause and effect logic, it is a little hard to buy in to the doomsday scenarios (see www.peakoil.com as a starting point). I can see the obvious negative consequences if we don't come up with an economical energy alternative to oil and natural gas. Have you done any research in this area?  If so, do you have an opinion on a retirement fund management strategy should events continue to correlate relatively closely to their predictions?  I see no real hedge against doomsday.  BTW: I have followed your investment strategies for probably 20+ years.  I hope you will continue to be an advocate for the working masses even as you move into retirement.  Honestly, your financial advice has meant a lot to the financial security of my family and I am earnestly trying to pass these lessons on to my children.  I regularly update my financial model in ESPlanner and on track to retire well if the sky doesn't fall. 

Thanks for your time.

Wageslave,

 Thank your for your very kind words.

Whether Peak Oil occurs in 2010 or 2020, it's just a change in coefficients. The basic equation remains the same and we will be in deep trouble unless we use energy more efficiently and find alternative sources.

Similarly, you don't have to believe in Peak Oil to see that the future is likely to hold a long term imbalance and uncertainty over the supply/demand situation for oil. That's the primary reason I suggested energy investments in "The Coming Generational Storm" (MIT Press, 2004). I see no reason to reduce one's asset allocation to energy in 2008. There is a energy commitment in the Couch Potato Building Block portfolios. And there is an energy commitment in the AssetBuilder portfolios. At AssetBuilder we do it with DBX, the Deutsche Bank Commodities ETF which is about 60 percent energy.

Like you, I don't see any "real hedge against doomsday." I've listened to, and read, the doomsday contingent for decades. All I can say is that I have no interest in being wealthy if I am the Last-Man-Standing. The alternative is to build very diversified portfolios, to keep our obligations low, and to remain capable of adapting. Money doesn't adapt. People adapt and adaptation is our strong suit--- if we will only allow it.

Scott