Let’s discuss the current state of the stock market, why so much volatility, and what you might be able to expect for the future – enjoy!
It all starts with the 26th of February
We were all thinking ..Why do the market simply went like this?Do not spend too long thinking about this,because….
THE VERY NEXT DAY…..
If you thought that these is the end of world, and the only currency that we will remain to use will be BitCoin and whatever…Hold your horses!
On 2nd of March…
So that is a new record in the history of the stock market as well…
This is simply the economy’s way of saying- IT WAS JUST A PRANK,BRO!
It was not just a prank,because the
next day, on
Then, the market acted like a toddler that did not have his nap,and this is what we get
And then it dropped …
Now ,the market is down again…
So ,let us start to explain this rollercoster ..And try to offer you solid and direct advice with what you should be doing with the money that you own…
First, lets start here with the Federal Reserve suddenly reducing interest rates by half a point, out of nowhere.
Now, this is REALLY GOOD if we start to see INFLATION.
So, if they RAISE interest rates…debt become more expensive, and – in theory – the cost of goods should come down. On the other hand, though…when the Federal Reserve is CONCERNED about the future of our economy, and wants to TRY to maintain stability…they’ll LOWER interest rates to reduce the cost of debt, encourage more people to borrow money, and encourage more investment within the markets.
When the FED posted a sudden rate cut of half a point, OUT OF NOWHERE…it signaled to the markets that maybe the economy is more fragile than we thought, and if the FED felt the need to reduce rates so quickly…maybe they know something we don’t.
Hence the drop in stocks that day.
First, the most notable difference we’ll see is within our Savings Accounts:
When the FED reduces rates like this, it has a direct implication on how much you get paid in your Savings Account. So basically, in other words…savings accounts just aren’t as profitable.
Second…the other big change we’ll see coming…is actually really good news for real estate…mortgage interest rates are hitting all time lows.
From an interest rate standpoint…there has pretty much NEVER been a better time to buy real estate than right now. That’s because, the cheaper it is to borrow money, the less a property will cost you – which means, theoretically, you can buy MORE of it.
This should, in turn, cause real estate prices to go up depending on the market…and, nearly everyone who has a loan right now, would be HIGHLY incentivized to refinance and lower their interest rate.
Third…overall…we’re not really sure how this will effect our economy, long term.
I mean, honestly…if I had the answer to this…
I probably wouldn’t be sitting in my garage making this post on a Monday morning.
Because, on the one hand…lower interest rates SHOULD help us out, it SHOULD raise the price of stocks, and it SHOULD allow us to borrow more money.
If you want to see past events and how they’ve impacted the stock market – here you go, as mentioned in the in my newsletter: https://books.google.com/books?id=wAb…
In the event we DO see a recession, your NUMBER ONE priority – over everything else – is to stay employed, and keep making money.
Secondly, if you can cut back on your expenses, you’ll be in so much of a better position to take advantage of lower prices, and keep buying into the markets.
Third, I know I just recently said this…but I’m going to say it again: keep a safety fund of 3-6 months worth of your expenses on the sidelines.
Fourth, if you can’t handle this type of volatility without worrying…then, either don’t check the markets every day, or rebalance your portfolio so you don’t see such intense swings.
Fifth, if we DO enter a bear market…just understand, it’s not something that’s never happened before…. the markets NEVER just go up indefinitely, and you’ll need to do your best to hold out.