Oil is now under $30 a barrel, and the economy is continuing to implode. Major markets are continuing to freefall, and unfortunately, fear is starting to overwhelm the emotions of the investors. A 200-300 point move was something that didn't shock investors in the time leading up to 2015-2016, but it's these multiple days of hundred-point moves that are adding up to 1000s of points and trillions of dollars in valuations lost worldwide.
This Money Weekly is going to be addressed to those that want to take what is going on in 2016 as an opportunity to get very rich. The wonderful thing about manipulated markets is that they have severe swings, and if you are positioned accordingly, you can accelerate your positions.
When you talk to your friends who don't follow the economy and who are fortunate enough to have a decent job, to them, the economy is thriving and things are great. They are living in their own bubble of reality, and some of them will weather the economic storm just fine due to their life skills and habits that will help them thrive in one form or another, but some certainly won't.
The old saying is true that when your neighbor losses his job, it's a recession, and when you lose your job, it's a depression.
My suggestion for all of us is to instead of live in a bubble disconnected from the realities of the economy, and build a financial moat that will float in times of hardship. Ideally, you want to be able to look at the current situation and say "bring it on." But can you say that?
- Do you have the life skills necessary to compete in an economy of high unemployment?
- Is your business prepared to compete in an economy with a shrinking supply of qualified buyers?
- Are you financially positioned to pay your bills if your income drastically drops?
- Are you positioned to thrive if the Fed doubles down on QE in 2016?
- How would your portfolio look if the stock market continues to tank?
- Have you considered precious metals, which are also at an extreme in their prices?
The fact is you are going to hear stories about the one guy who strikes it big betting the farm at the casino and walks out a millionaire. However, this is far and few between, and any sort of lasting wealth needs to be managed either by you or someone you trust to manage risk.
Oil is one area that was unforeseen by 99% of analysts going to the $20 range, and here we are. Not to put people I highly respect on blast, but even the best analysts in the markets -- who have the most extensive research -- seem to be wrong one time or another when it comes to their actionable advice. This lets me know that even with the most analyses and research, markets can still be irrational and lose you a great deal of money, and should be respected accordingly.
If someone claims to know that something is for sure and guaranteed in the financial markets, you should run from that person. A financial moat is made up of multiple safeguards and is designed to keep you afloat. Keep that in mind when making financial and life decisions –you need to safeguard your future through multiple angles and be prepared for much more than one.
I just recently interviewed TresKnippa, a man who is removing the blinders that are keeping many people in their bubble and urging people to be prepared for what is to come here in the U.S. and around the world. There is much to be learned from China, and ultimately where their currency is headed and how that relates to the fiat currency of wherever it is you might live. The guest's name is TresKnippa, who is a Commodity Trading Advisor.Our discussion is one that is actionable and applicable right now in the economy of 2016.