Successfully Surviving Market Volatility

This Time is Different

Market cycles have always been a part of our history. Ups and downs. Booms and busts. We’ve had downturns and recessions in the past, but usually, they are followed by a big bull market cycle.

Most investors have a recency bias – whatever's happened most recently in our investing, business, and lives is what will keep happening in the future. It is believing that the stability we’ve had will continue.

The issue is we forget that there are market cycles. There will be more market cycles, but this time, we can expect even more volatility going forward than we've seen in the past.

Many long-term economic advisors state we are entering a period of time, a decade or more, similar to an era of the late 60s and 70s when we had stagflation.

Stagflation means a very anemic, low-growth, or no-growth economy with a lot of inflation. Why would that be?

We have a national debt of over $35 trillion, adding $2 trillion annually. This is not sustainable. The only way that the government can deal with this is to “monetize” the debt.

This means printing more money. Expanding credit for as long as they can. But once the reserve currency, the dollar, is no longer the reserve currency, we've got real problems. We may become another Venezuela.

Now is the Time to Prepare

I believe losing the dollar as the reserve currency will probably be years down the road.

I don’t say this to cause panic or be negative, I’m saying it because I believe we still have to prepare right now. We can't become complacent.

How do you deal with the uncertainty in the economy? How do you manage the uncertainty in your own personal wealth and investments?

You know how to do it in your business. Your business is your primary engine. As long as you have an active income in a business, you have your hand on the throttle.

It may be hard, it may not be fun, it's a lot of responsibility, but at least you have more control and safety than most.

You must also create your plan B – Creating wealth and income replacement (cash flow) outside your business.

Today, you must become a primary steward/advocate for your capital. It's not sufficient to put it on Wall Street, hand it over to a money manager, a 401(k), or a fiduciary to take care of it and trust it will be there when you need it.

Financial advisors and money managers will do their best, but the market cycle and long-term secular cycles will be different going forward. Most financial advisors will keep promoting the same models that have worked before, only to find that they have been turned upside down. They do not work any longer.

If you’re one of the few who want to take your financial security and future into your own hands, then there is ample opportunity to still be successful and safeguard your wealth.

Where to Start in Alternative Investments

It starts with education. You can read many books, listen to podcasts and YouTube videos, and gain insight.

However, to invest outside of Wall Street and the financial product markets successfully, you must have access to connections in the alternative investment world, particularly in real estate.

Hard assets, tangible assets, are the premier way to offset inflation and the volatility we will see in the financial markets. Investing in tangible assets with success takes time because it takes time to create a network.

But, it is the inefficiency of alternatives that provide investors with opportunity. It’s about who you know that gives you the knowledge of when and what to invest in.

You can’t have that on Wall Street, where they play with billions and trillions of dollars using high-speed computer algorithms. You just can't beat that as a retail investor. Which means you’re just riding that market wherever it goes.

In alternatives, however, you can play a different game. It comes with risk, but you can offset that risk by what you know and, more importantly, by who you know.

It’s your choice. Keep doing what you’ve been doing, or step outside the box and seek people who are doing well in alternative investments.

The time to act is now. Don't wait until you're ready to leave your active income, sell your practice, sell your business, and say, “What do I do now?”