Last chance to rush for the exit.
The question is of course: where do you park your money before the big one hits so as to minimize the damages.
Cash?
High-tech stocks?
Real estate?
Cryptos?
Bonds [lol]?
Art?
[edit] : not sure why the downvotes, this is a legitimate question: if you anticipate a recession in the next 2 years (I do) how do you structure your portfolio to minimize the damage?
Don't need the money right now or for any time in the foreseeable future. Have the appropriate emergency savings to handle short-term needs. Paid cash for my house, so don't need to worry about making a mortgage payment.
Personal feeling is that if the market implodes to the point that this strategy doesn't work, everyone has much bigger problems to worry about.
I know many of us are still emotionally scarred from the last credit crisis...but storing cash under your mattress is the wrong way to respond to those feelings. It was dumb when my grandparents did it 80 years ago after the Great Depression, and it is still dumb in 2019.
Of course, the world is uncertain and could end tomorrow. If you're uncomfortable with that idea, perhaps try religion?
Incidence of "black swans" is much higher than we except. Not only it's a valid strategy, it's how massive fortunes are made, as long as you control losses.
To profit off of a black swan event, you need to do 3 insanely hard things. You need to 1) predict both the exact timing of the the crash & the recovery after 2) predict the scale of the move downward and 3) actually go short and expose yourself to massive asymmetric risk.
Massive fortunes are also made at the casino once in a while. That doesn’t mean it’s a repeatable strategy. Paul Tudor Jones and John Paulson know a thing or two about this.
I don't know if this is that situation though, or if this is part of what he calls "pushing on a string".
It's hard to make sense of all this. Supposedly, every 75-100 years there are Big corrections, but I thought the idea was that that was what we went through ten years ago, with the debt crisis and the "beautiful deleveraging" etc. So if that's true we're more looking at a run-of-the-mill recession coming at some point. But on the other hand maybe that crisis ten years ago wasn't actually the Big One.
I'm not saying you are uninformed or Ray Dalio recommended it to uninformed investors. However, these things then get picked up and parroted by less scrupulous individuals.
Dalio has so far made sense to me, but man... trying to figure out how to dip into gold as a run-of-the-mill investor is not easy, at least not through Fidelity. It's either high fees or buying into gold mining stocks which doesn't seem quite right.
So, in the absence of going full-time into the investor rabbit hole, I'm guessing I'll be in the same boat as everyone else, trying to keep my stock/bonds allocation model rebalanced every few months as it theoretically all goes through the floor together. :-/
Need to park your money? I have plenty of room!
I am asking the HN crowd, not most people.
My guess is, given how many seem to work in the valley, they do have a little more money than most people and therefore skin in this game.
If you have less, generally the best advice is to do nothing and weather it out, because the truth of the matter is that practically nobody can time the market, not even on the horizon of years and any attempts to do so will cost you more than doing nothing would have.
There is no silver bullet unfortunately. Think of it like this, if there was a cheap and easily accessible protection against crashes, people would pile into it and make it ineffective or expensive. Which is exactly what happens.
The one asset in limited supply is land, and the one commodity that we all are fundamentally dependent upon is food and water. Both require the appropriate land.
But not a simple endeavor.
It seems to contribute greatly to the four year cycle that bitcoin has followed so far. Hit play on the graph to see where we are now. The blue lines are the halving dates, where mining rewards are halved, reducing supply.
https://www.ecb.europa.eu/stats/financial_markets_and_intere...