This article was contributed by The Wealth Research Group.
When you’re done reading today’s letter, you’ll be left with a big decision to make, and my message to you is that instead of boxing yourself into a corner and making it today, you can choose to do as I have done throughout my career and diversify your assets, while “living” the environment and the economic conditions.
As 2020 ends, here’s what bulls claim:
- Yes, the stock market is expensive and, yes, there’s a strong sentiment that resembles the Dot.Com days, but the world today is not like it was back then, since there are fewer investment alternatives outside of the stock market. Therefore, this market can remain expensive.
- The unprecedented stimulus of 2020 has not yet been felt. In 2021, this fresh currency supply will flow into Main Street, making the recovery stronger, more inclusive and stocks can actually rally big in 2021.
- Technology, automation, cloud, IoT, and breakthrough medicine are making the world better, more efficient, and more affordable, which, in turn, makes corporations more valuable.
If you’re not buying that, you’re not alone; there are a few bears left out there, and here’s what they say:
- Currency printing has inflated asset prices, at the expense of starving the real economy. It’s causing all sorts of societal mass, the introduction of government dependency, historically-high wealth, and income gaps and it’s an “artificial” economy – a balloon that will pop.
- Debt levels are simply absurd; governments run perpetual deficits, which will collapse and equities will, in turn, drop in price.
- Corporations and households are loaded with toxic debt, which keeps them afloat for now.
It’s a giant house of cards is the bottom line for this camp and they mostly refuse to participate.
Big, macro-economic predictions are not money-makers. It’s extremely difficult to build a screenplay of how the global economy will behave and play your hand, going off one’s forecast.
Many have tried and failed this way; Ray Dalio, the famed hedge fund manager, has been underperforming indices for several years, ever since his switch to macro-economics, as a leading catalyst for results.
The fact of the matter is that many “brilliant” people said Bitcoin is a joke and have been eating their own s**t for missing out on an amazing boom. Plenty of billionaires scoffed at gold, while it has appreciated by 700% in the past 20 years!
Hundreds of hedge funds shorted companies, such as TSLA, only to lose their clients a bundle in the process.
The point here is that one better not comment on what one has no idea about. My chief conclusion from having been at the entrepreneurship, business building, and investing world in the past two decades is that intolerance is the greatest sin of the one whose goal it is to generate returns over time.
Evolution and the ability to admit mistakes, in order to grow, is perhaps the most vital trait of the winner – who isn’t tied to his opinions if they neither hold the water nor withstand the test of RESULTS.
Look at the chart above; it implies that a huge market crash is imminent, but it could also prove that a major surge is coming, breaking out of the resistance line.
What should one do, then?
What I do is live and breathe the action and make decisions, based on current circumstances, not future scenarios. If something makes sense today, I do it.
By definition, if every single day you do only what makes sense, your overall result will make sense.
Don’t fall into traps, hype, or doom. THINK!