If a large amount of white collar workers are jobless, your SPY calls would also become worthless.
It's a good idea to invest in index funds, but investing in index funds expecting a economic apocalypse is not good reasoning.
It's a good idea to invest in index funds, but investing in index funds expecting a economic apocalypse is not good reasoning.
Perhaps I am wrong, but could you provide details as to why?
The actual effect is that capital in the companies that are taking advantage of the new globoticized future does great. FANG does great. Upwork does great. AirBnB and Stripe do great, once they go public.
Labor and capital of old-line companies do terribly. This type of economic transformation doesn't just result in layoffs, it results in whole companies going out of business. Their value-networks are adopted to the cost structure of the old world; as that cost structure changes, they have no reason to exist as a firm.
When you buy an index fund, you're buying both of these types of companies. You should probably do okay, because the public market is actually pricing a lot of this phenomena in already: multiples on old-line companies are severely depressed while FANG shares are soaring, and the capitalization-weighting of the index is taking this into account. But you're leaving money on the table: many of the biggest winners will be new fast-growing startups that aren't public yet.
If the economic credibility of the nation goes, so too does the value of its cash currency.
What’s a “more white collar workers than jobs” economy look like?
Personally, I’m leaning into useful life skills, like growing food, reconnecting to hunting, low level electronics, rebuilding my car, and home myself with my money now.
I’d rather have deep experience in head and hands than a wheelbarrow full of dolla dolla bills y’all with the buying power of East German currency.
Not that I have any way to be sure the implosion is coming any time in my remaining years. But still, if we’re talking about how to prepare for such a thing, let’s get real: investments in today’s ephemeral value stores are the worst idea for securing yourself against economic collapse
If we're looking at a benign-ish revolution with redistribution it won't matter much.
Personally I think the most realistic medium term risk scenario to protect against is that capitalism will hang in there, but that jobs become more scarce. An outright economic collapse or major social upheaval is likely to take more time. If you start seeing job scarcity hitting, then sure, start converting some of those index funds just in case things accelerate in the wrong direction.
Business operations as a whole are so reliant on the legal rails, like it or not, they’d have to fail spectacularly to create “economic apocalypse” to my mind.
I forget some people see run of the mill loss of wealth status as akin to loss of life. So perhaps apocalypse to them means going from $100 million in wealth to merely $10 million, but the social foundations that support that wealth largely remain intact
If it is world wide collapse than productive skills may be the best - since even if you have guns you may be outgunned but if you can supply food any remotely smart bandit or warlord would prefer the reliable food stream of a living serf under their protection than just a storehouse's worth.
Of course these are all very long odds and preventing a collapse is likely a far better use of resources.
1 - Invest in yourself. - Health - Education - Social circle
2 - Invest in your living space. - Buy an apartment anywhere on earth where you can afford, you can take cheap flights to anywhere on earth these days. Even the remotest part of Africa can be reached within 1 day and less than 500 dollars. ( you are normally paying more than 700 dollars in rent anywhere in the developed world ).
3 - Buy high yielding government bonds, preferably multiple countries.
4 - Buy index funds.
I do not prefer gold / silver, there is severe restrictions in moving them around, and high taxation in audit and transaction. government bonds are generally tax exempt. You are better off investing in guns than gold if the economy collapses.