Another Economic Crisis?
Seems like the world is going to hell in a handbasket, with a crisis at the American border, Afghanistan, labor shortage, supply shortages, Covid, debt ceilings, and do not forget the tons of money we have been printing and inflations and rising rates. The question is are economies really growing, will they grow in the future, become stagnant, or shrink?
Remember one thing, no one is going to look out for you and your money better than you. Anything that is expected to grow over time is always the best place for your money, which is why I like growth ETFs or mutual funds. Sometimes it is wise to reposition your portfolio. If you look at SPY from 1995 to August of 2000 it increased 250%. Then we see an 50% pullback over the next couple of years, it then took 5 years to touch those highs again in October of 2007 and then we have a 50% pullback within slightly over a year. Then it took another 4 years to recover those gains. Of course, there are always reasons for these pullbacks, and we all know what happened in 2008. If you averaged down and bought when it was at its lows, you have still done well over the years. A 50% pullback from this area would put us back to 2016 levels. Will it happen? What should you do?
No one knows if it will happen or not, but we all can see what is going on around us and a lot of people are predicting it to happen. It may go on a 2-year decline, something drastic could happen and cause a quick decline or it could continue to go up. Looking around right now though looks like a suitable time to reposition a portfolio. You always want your money working for you, and like Warren Buffet and others say you never want to be out of the market. Look around and see what you think will have huge growth over the next couple of years and put your money there. Right now, I have sold all my positions besides DIV which is a dividend ETF that pays about 5.6% on your investment. Looking at its holdings and knowing I at least own an asset that will pay me regardless of any market fluctuations or crashes. I also do not plan to make any trades anytime soon. I do love trading leveraged ETFs but right now does not seem like a suitable time to buy the dip.
No one knows what the future holds but look around and decide on your money. Remember you need to keep your money safe and working for you, there are many ways to do that, and you should decide and feel comfortable about it. It seems like situations around the world is getting worse. I am not going to try and predict an economic nightmare, but looking around at the labor shortage, the supply chain shortage, inflation, an administration that thanks money is free, and a ton being printed this could blow up quick or see it decline over the next couple of years.
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