Yesterday afternoon, I sat in my anti-gravity chair looking at my small pond garden, listening to the birds, and thinking. My thoughts drifted to the specific anxiety I have about our political/fiscal crisis and its potential economic impact on our lives. Amidst the harmonics of bird chatter, it occurred to me that I am transferring my anxiety about our budgetary debate to you. Immediately, I thought that a bad thing, and then, just like that, I didn’t.
I educate about trading, investing, markets, economics, and money. The constant in this process is what I know (or don’t know) which derives from my experiences. One of my experiences profoundly taught me my greatest lesson. The lesson learned derived from the financial collapse of 2008. The lesson? Pay attention to the signposts, never dismiss my intuition, and, most important, listen to the voices of reason. I now consider my voice a voice of reason, and so I will use it as such for those who might be where I was in 2008, not quite sure about what to do …
I am a novice in what I should do to prepare for our uncertain financial future. We own our home, but are not wealthy. Thank you for keeping me posted.
The voice in this simple email carries with it some fear, and rightfully so, as we have all seen what can happen to our lives when our economy collapses. I don’t have much information from this woman, so I will speculate that she is reading my column because [they] have money invested in the market in one form or another. So, here is my advice to her …
Pay attention to the big picture. Watch the news, at least the unbiased kind if possible. Listen to whatever intuition you have about the market or the economy. Short that, find a voice or two of reason that will keep a light on the movement of things. Keep in mind you are responsible for what happens to your money. You just might have to make a decision soon regarding what investments you have, and that will be difficult, but if you do as I suggest, when you make the decision, it will feel right. Base your decision on what you know and what advice you can get from someone who knows his or investment “stuff.” Don’t panic; just be calm and decisive if you feel you must protect your money and, thus, your family.
As to your home … I think you are in good shape here. I detect from you no pending reason to sell, and since this is the case (hopefully), if you protect your other investment assets, your economic future should be safe, or, as a safe as anything can be in this uncertain world. I am confident that if we get past this political/fiscal crisis, the real estate market will return to a normal 3-5% annualized appreciation within a year or two.
It might not seem like it, but I am becoming more confident that the money powers do not want another collapse, so, in the end, after some heated rhetoric and ensuing market volatility, our politicians will strike a deal to raise the debt ceiling. After that, all we have to do is watch what effect that deal will have on the recovering U.S. and global economy. Yes, that is all we have to do …
Trade in the day – Invest in your life …