By Chris C. (August 2016)
How do you protect yourself in a stock market crash?
Currently, if you own shares in the US stock market, it would be through a third party or broker. These shares are aptly named “Streetname”. You appear to own the shares and receive dividends in your name, but the shares are truly owned by a third party – e.g. Melon Bank of New York. This third party is tied to an entity that will not survive such calamity. Your holdings, managed by them as custodian, will sink with the entity; they are in their custody, and as with anything that involves insolvency, unsecured creditors receive zero.
It does not take a financial collapse or bankruptcy to wipe your investment away. During a big storm several years ago in New York, supposedly there were share records held in a basement vault. The vault was flooded and records destroyed. Many investors could not provide the necessary proof that their holdings were not a part of these records, therefore losing their investments.
There is a solution to navigate around this. If you have shares in foreign exchanges, (NZ and AUSTRALIA being exempt), then you need to have your shares in DRS (Direct Registered Shares). Per request, this can be settled through your broker. This comes at a cost of approximately US $120 per share transfer. Be sure to question the charges, as well as everything those fees cover. You will receive the share documents in your name, and all dividends sent direct through the companies share registrar, e.g.Computershare. It is important you keep the records safe. A great resource is www.JSMineset.com for further research.
If you would like to invest in Silver and Gold here is a link to a safe and secure way to hold physical and give yourself the opportunity to create a holding by encouraging others to buy as well
Happy investing!
Chris.
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