While some say the economy and many asset classes are already rebounding, others are wary this is the fake recovery before the real dip.
If we are on the verge of a deep and nasty economic downturn, what are the keys to winning and thriving through it?
If it turns out that we are on the front end of a new bull run across the board, then these same principles and tactics will only help ensure you do even better in it.
Succeeding Amidst Uncertainty
According to Bloomberg the banks just aced their stress tests, clearing the way for big payouts. Of course, this in itself seems like a red flag. Especially when the Fed is simultaneously saying that banks and lenders will face higher capital reserve requirements.
There is the AI bubble. Full of venture capital bets, with a very murky outlook. Not to mention rising interest rates which appear to have been a major trigger for the last great recession. All while consumers find themselves in very fragile situations.
Of course, with an election year looming, there are all kinds of wild cards that could be played, and artificial stimulation could stretch out the current situation and cover up any weakness.
If it’s a bull run, then it may be hard to lose money. Though if it gets bearish, that is when the most wealth is made. How do you make sure you are one of the winners in this highly anticipated shift in wealth?
1. Surround Yourself With The Best People Possible
Above all else, success is about surrounding yourself with the best possible team. That can include tax experts, financial advisors, legal counsel, money managers, and the investors you invest alongside.
2. Make Your Money When You Buy
Whatever you are investing in, you should be locking in your wins when you buy in. Don’t just be gambling on future performance, or potential for appreciation. That should just be the icing on the cake, if it comes.
This may mean buying at a discount, buying into existing cash flows, or lining up an exit plan.
3. Acquire Tangible Assets
The biggest financial risk out there today seems to center around ‘investments’ that don’t have a floor, or enough tangible hard assets behind them. This can apply to investing in public and private companies, cryptocurrencies, and according to some like Robert Kiyosaki, even paper money.
4. Invest For Passive Income
It’s glaringly clear that there is no job security, not even for Goldman Sachs directors. Other sources of income can easily be cut off as well. Invest in assets that can continue providing passive income.
5. Spread Your Risk
Spread risk by diversifying. Share risk by investing in syndications, partnerships, and by using leverage.