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the average investor does not / will not think about ways to make money or at least protect what they have in a downfall market. |
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Sad but true. My older brother worked hard so he could retire early.
Sold his house and bought a boat.
House prices doubled over 2-3 years.
Diesel prices went up and boat prices went down.
Now he can't afford to buy back into a house.
It was all covered in the news, all you had to do was be aware of what it meant for you, but he chose to live in comfortably numb land and ignore simple obvious realities.
So he made a huge effort over many years to make money, then lost maybe three quarters of it over a few years from not caring to do some basic thinking that would have required no effort at all.
The contradiction staggers me.
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Many just simply cash out somewhere near the bottom. |
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Which is probably when they should be buying in.
I am waiting to see if my brother does this too, his overseas share portfolio is the only other asset he has left and it will have taken a hammering.
Apparently Chinas stability is now a significant part of the equation and it is still not a free economy, it depends on the political regime jumping in the right direction. A person has to have mixed feelings on that one.
If I had significant money in the markets I think I would want to keep it liquid and able to move on short notice. One person's risk is another person's opportunity, perhaps.
I have difficulty picturing a full blown meltdown.
Money is no longer real, it is essentially valueless and governments seem able to invent as much capital as they please.
Individuals do not want to be holding big debts at this time, yet counties are universally heavily in debt and have been for decades without consequences, yet.
What markets and governments seem to fear is a drying up of confidence that leads to a drying up of liquidity, people hold onto cash to avoid risk.
Markets and governments are essentially parasites that take the profit from other peoples turnover. If the turnover stops, their profit stops, jobs go.
Given the size of modern government, the fear might not be job losses in the markets, but governments halving their employees. I have difficulty picturing how a modern economy would go into meltdown. Money does not have a rigid meaning anymore, at least for governments, it seems to be just numbers without any consequences. Yet clearly they have fear, I'm not sure how much though.