Short answer is buy Gold, Silver, and Cryptocurrencies...
Let me explain...
Since the last recession about a decade ago (2008-2009), world economies in western countries has been booming and the prices of company stocks are increasing in multiples. This happenned because the central banks in those countries lowered the interest rates and launching Quantitative Easing to buy government bonds to stimulate the economy.
With money flowing like tsunami in to stock market, it pushes the prices of stocks up because for it is easier for companies to borrow money at almost 0% interests. This pushes the profit margin of those companies up and companies are expanding by hiring more people and investing in new plants, etc.
And people who own stocks are happy because they get richer and richer everyday...
But
This also increases the income inequality within the population. People who can´t afford to own stocks are feeling the pinch because their salary are still the same but the prices of goods and services are increases everyday due to the flood of money (inflation) on the market. This is why now there are many populist movements all over the world that challange the current govt.
Therefore, central banks such as The Fed are starting to increase the interest rates again to curb inflation and stopping the buyback program of govt bonds. But historically, everytime central banks are increasing the interest rates, recession or slowing down will happen.
All omen of a recession is already out there, and this time it could be worse. Ray Dalio, the founder of Bridgewater Associates told us that the situation right now is very similar with the situation in 1930s (one of the worst recessions that lead to world wars).
One reason for this because the interest rates are still very low compared to their historical value plus the bond debt that govts has are too high compared to their GDP thus lowering the interest rates and quatitative easing again in the next recession will not have a significant impact anymore on the economy.
The questions now are when will this recession will take place and how to survive it?
The answer for that questions are not easy. Market tends to outlasts the prediction of "market experts" but how to survive it is easy..buy gold,silver and cryptocurrencies..
For gold and silver are pretty much easy to do. just buy them and keep them safe in a safe deposit. Never buy "paper gold" or ETF always buy the real thing.
For cryptocurrencies, its quite tricky since we are deep in bear market.
The way that I can see it, there are two probabilities:
- The Cryptocurrencies enter BULL market before recession happens OR
- Recession happens before Cryptocurrencies enter BULL market
1. Cryptocurrencies enter BULL market before recession happens
This is the ideal scenario for people who own crypto because that means our investments in crypto will give us enough capital to buy gold, silver and wait fot the stock market to crash. And believe me, it will crash hard!!!
And at the same time, Crypto market will also crash alongside with stock market
When that happens, use your money to buy those blue chip stocks at steep discounts and wait while enjoying the dividends from that stocks coming to your pocket. Historically, when recession happens there are an increased yields on those dividends.
2. Recession happens before cryptocurrencies enter BULL market
When this happens, the panic from stock market will push the price of cryptocurrencies up alongside with the price of gold and silver because people will try to find safe haven for their money. And I believe, Bitcoin will jump through the roof since people recognise it as a store of value and digital gold. When BTC goes up, so does other ALT coins.
However, this party will not last for long, once recession is over so does the BULL market of cryptocurrencies. The best course of action is similar like above, have your cash ready to buy gold,silver and also blue chip stocks...
It is my personal believe that the next recession will be once in a life time event of Wealth Transfer and if we prepared, we can ride the wave and profit from it...
What do you think?