For the last four years, ordinary Americans have struggled to rebuild their wealth in the wake of the Great Financial Crisis.
Last week, the Federal Reserve Bank of St. Louis reported that the average U.S. household has recovered only 45% of its wealth lost during the recession.
Of course, the Federal Reserve won't acknowledge that its Chairman, Ben Bernanke, has been a principle driver in the underperformance of the middle class' return to financial normalcy. Bernanke has removed incentives for anyone to keep their dollars in a savings account by knocking interest rates to near-record lows.
Meanwhile, nearly 50% of Americans do not own any stocks or bonds. Given recent memories of their wealth evaporating, it's been difficult to instill much confidence for those who lost so much.
Low rates and lost confidence in the markets have left more Americans vulnerable to inflation, accelerating costs of staples, and uncertainty about their financial future.
But there is good news.
As the U.S. policy continues to exhibit how government intervention in the financial markets favors the rich and leaves the middle class out in the cold, there still are ways that the average investor can make money. Â
And it all starts with one simple piece of economic advice.
You need to take charge of what's available in the markets and put your money to work with investments that offer a healthier dose of confidence than Ben Bernanke's economic alchemy ever could.
Let me explain...
Embracing the Free (Energy) Market
Right now, keeping money in a savings account is going to cost you due to inflation. And putting much faith in the U.S. government's rates will not do much to instill much confidence.
But by investing in companies engaged in the procurement and distribution of valuable commodities will provide a steady return on your investment in any economic environment.
Embracing these companies that have the capacity to expand globally and pay strong dividends can help beat back Bernanke's war on savings accounts.
That's because publicly owned American companies, despite new regulations and government intrusion, find a way to perform around the rules and policies meant to hold them back. They perform through innovation and competition. They thrive off their ability to provide a need in a market.
Simply put, investing in companies that facilitate global trade are the best investments to defend against government's reckless fiscal policies. Yes, the markets do go up and down, but investing for the long-term is an important strategy to help rebuild wealth in these tough times.
Of course, this sounds so simple.
But for a person like me who is fascinated by global trade, innovation, and problem solving, I tend to "geek out" by what's happening right now in this world.
And of course, the money that can be made...
The Importance of Technology When Profit Hunting
One thing to embrace when finding these best investments: technology.
Technological innovation, in any shape or form, is a remarkable thing. And most important to us, it's extremely profitable when the government gets out of the way and allows business to transpire.
I find it incredible... and I repeat incredible, that someone can invest their money in a natural gas producer and the following story transpires within days.
Due to incredible technological innovation, a natural gas producer in North Dakota has the capability to drill through thousands of feet of sedimentary rock that has been there since the dinosaurs, extract billions of cubic feet of natural gas, ship it through a complex pipeline system to ports in Louisiana, convert it to liquefied natural gas (LNG) through an engineering process that few people understand, ship it across two oceans, convert it back to the state required to generate power, and then transfer it on trucks and trains to a remote area of Japan to a manufacturing plant where they make the cars that we ultimately purchase.
And after all of those components moving fluidly, after all of the cooperation and companies taking part in this process for their own expected gains... we can go back to the pipeline company that transferred millions of cubic feet of natural gas per day, and they'll pay us more than 7% on our money.
Meanwhile, the best that the United States government can do right now is pay us a little more than 0.2% on a two-year bond.
We will take the free market every time.
The Best Investments to Beat Bernanke
By dissecting the story about how natural gas gets from the depths of North Dakota shale fields to Japanese manufacturers, one can uncover some of the best investments for yield. The value chain of natural gas companies provides ample opportunity for share appreciation and higher than average dividends.
And the best opportunities for both come from midstream companies connecting the producers to the downstream consumers.
This includes a Master Limited Partnership like Regency Energy Partners LP(NYSE: RGP) or Enbridge Energy Partners L.P. (NYSE: EEP) both provide annual yields above 7%, and are poised for even more growth as the companies experience greater demand for their pipeline, transportation, and storage services.
Naturally, it's important to own U.S. bonds as the part of any portfolio for its security, but the markets, despite bias against what happened in 2008, continue to offer reliable streams of return on investment as the global recovery continues and stability returns to the markets.
By ignoring dividend stocks in a strong growth industry like natural gas, you'll be leaving money on the table over the next three years while watching your buying power decline.
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