I predict a massive financial case next 5 years
Discussion
Ask yourself, what would you have done in 2007 (had you known the 2008 crash was coming).
Not buy gold.
Perhaps take out the biggest self cert interest only mortgage you could get your hands on.
(Unfortunately both self cert and interest only mortgages are not as readily available)
There was little opportunity to profit from the crash (unless you could short shares etc)
Moreover the opportunity to profit really came from government responses, massive reduction in interest rates (driving up cars, shares, artwork etc etc).
To profit from the next crash, you have to predict what causes the crash and also the likely response.
Not buy gold.
Perhaps take out the biggest self cert interest only mortgage you could get your hands on.
(Unfortunately both self cert and interest only mortgages are not as readily available)
There was little opportunity to profit from the crash (unless you could short shares etc)
Moreover the opportunity to profit really came from government responses, massive reduction in interest rates (driving up cars, shares, artwork etc etc).
To profit from the next crash, you have to predict what causes the crash and also the likely response.
Simpo Two said:
Wilmslowboy said:
To profit from the next crash, you have to predict what causes the crash and also the likely response.
Plan B - keep some cash and buy in after the crash. A fine example of buying low was IM's PHR portfolio, and we look forward to its descendants.The issue with this strategy is that you shouldn't be holding assets or investments when the market crashes, as you'll get caught up in it all with losses So you either need to know when the crash is going to occur or just sit on cash with limited returns until it does happen. Anyone aware of the forum housepricecrash.co.uk - there are people on there that have been predicting the house price crash for the last 20 years, and have been waiting to buy a house all that time. Perhaps not the best long term strategy.
Wilmslowboy said:
Ask yourself, what would you have done in 2007 (had you known the 2008 crash was coming).
Not buy gold.
Perhaps take out the biggest self cert interest only mortgage you could get your hands on.
(Unfortunately both self cert and interest only mortgages are not as readily available)
There was little opportunity to profit from the crash (unless you could short shares etc)
Moreover the opportunity to profit really came from government responses, massive reduction in interest rates (driving up cars, shares, artwork etc etc).
To profit from the next crash, you have to predict what causes the crash and also the likely response.
Gold should 'protect' you (in the long run) from crashes and events more towards the severe end of the spectrum, the more black swan type things. It did track up sufficiently post 2008 to keep it's "retaining purchasing power" moniker, so it wouldn't have been a bad choice, you just have to wait? Not buy gold.
Perhaps take out the biggest self cert interest only mortgage you could get your hands on.
(Unfortunately both self cert and interest only mortgages are not as readily available)
There was little opportunity to profit from the crash (unless you could short shares etc)
Moreover the opportunity to profit really came from government responses, massive reduction in interest rates (driving up cars, shares, artwork etc etc).
To profit from the next crash, you have to predict what causes the crash and also the likely response.
As said above the right move is easy in hindsight but historically Gold always plods up, does what it does (see the 20 year chart), the above "biggest self cert mortgage" path would in hindsight have worked well, but the risk at the outset compared to Gold would have been high and it could have gone very wrong?
I think our overall risk perception is poor, largely due to the responses to previous issues where things are sorted/supported/fixed but also because of the recency bias where in the last few decades taking risk/borrowing excessively has paid off if you've bought assets, caution/frugality/restraint has largely been punished?
The potential reason the OP feels a crash is coming is because this has gone to the extreme? The debt going up and asset prices following, reaches a point that it can't expand any more and perhaps the usual fixes won't work and then I don't think anyone knows the true effects of that, beyond it'll be bad!?
Diversification, not too much correlation in the portfolio. If things go really bad, stuff you can carry....
Of course, you can have a field day with this stuff, interested to know if the OP had an actual Country in mind - I think the UK is a long way don the list of risks right now (although we have a bit of political risk incoming - its probably less than the US / Europe with rise o populist right wing parties). The US runs out of money for MediAid and benefits in the next 10 years, thats gonna be high impact,
Of course, you can have a field day with this stuff, interested to know if the OP had an actual Country in mind - I think the UK is a long way don the list of risks right now (although we have a bit of political risk incoming - its probably less than the US / Europe with rise o populist right wing parties). The US runs out of money for MediAid and benefits in the next 10 years, thats gonna be high impact,
OoopsVoss said:
Diversification, not too much correlation in the portfolio. If things go really bad, stuff you can carry....
Of course, you can have a field day with this stuff, interested to know if the OP had an actual Country in mind - I think the UK is a long way don the list of risks right now (although we have a bit of political risk incoming - its probably less than the US / Europe with rise o populist right wing parties). The US runs out of money for MediAid and benefits in the next 10 years, thats gonna be high impact,
My main homes are all on high ground, in the lee of bigger hills, in old democracies and within walking distance of a water source.Of course, you can have a field day with this stuff, interested to know if the OP had an actual Country in mind - I think the UK is a long way don the list of risks right now (although we have a bit of political risk incoming - its probably less than the US / Europe with rise o populist right wing parties). The US runs out of money for MediAid and benefits in the next 10 years, thats gonna be high impact,
Weirdly I only realised this after buying them.
If there is going to be a massive financial crash in five years, the solution is simple. Pick a few companies which will be impacted by the crash the most (but likely to survive).
Buy shares in the identified companies now but sell them all in four years time. Then, buy the same shares in the same companies just after the financial crash and reap the rewards.
How certain are you the crash will be in five years time........ and not next year or in seven years? What is happening in five years?
Buy shares in the identified companies now but sell them all in four years time. Then, buy the same shares in the same companies just after the financial crash and reap the rewards.
How certain are you the crash will be in five years time........ and not next year or in seven years? What is happening in five years?
OoopsVoss said:
Of course, you can have a field day with this stuff
You certainly can! When I look at other countries that already have currency issues, you see that largely they, legitimately or not, rely on/use the USD in some way.Argentina, Egypt etc and US$ are seen as the currency to have to not be devalued in short order, it's still just paper but trusted paper. I don't know what happens if the USD becomes the same as those domestic currencies ie more unwanted/untrusted, the narrative is it can't as it's the global reserve currency, but then the debt situation is perhaps getting out of control, is the dollar the largest 'too big to fail' thing, but then will the world always stand by if the US go from a Trillion more debt every 100 days to say a month and the recipients of these dollars just buy everything endlessly from across the globe, what's to stop them when they are the reserve currency.......it doesn't make a lot of sense there has to be a limit and we are moving up towards it?
The biggest risk I see from observing other places is this currency risk, combined with the restrictions that can be placed on your money at the same time.
People in affected countries have lost life savings, well they didn't exactly lose it, it just couldn't buy what it used to, equivalent to your maximum premium bond allocation buying you a M&S wrap a few years later. Yes a new system of money comes in and it and wages paid in it can make life livable again but your old wealth has literally 'poof' gone. This has happened elsewhere for sure, no idea if anything similar could happen here/US etc, but the inflation issue is doing similar in a smaller/longer way.
Those that lost money this way, could have bought anything pretty much and preserved more wealth, the risk was and is still? that what security/comfort you have today via bank balances, investments etc etc, won't necessarily provide the lifestyle in the future that you think it will today, and in extremis might provide little to nothing.
Yes these are extremely unlikely scenarios, but they observably do happen and where they did people didn't expect them either?
If you read about historical currencies and monetary issues, they often talk about economic cycles longer than people lifespans and so what 'always happens' is sometimes a misplaced phrase, a myth?
I mean when a 2008 crisis comes up, it's fixed, we can always fix it that's been the case the whole of my 50 year old life...................then looking at all history you see over and over that no currencies last, collapses/resets happen all the time and we survive it but who wins, largely the ones with material things?
That's what's always needed and fought over and what even you base your security on from the wealth you hold, "X" £'s in savings/income will buy me the food/energy etc I need in 10-20 years time. On one can buy everything now that they'll need in the future so we've always had things to represent stored wealth and Gold became the go to, because of it's rarity, looks and inertness (it stays looking the same however it's treated/stored).
We've moved on though haven't we? to backed by promise money, my digital figure is bigger than your digital figure! and I would put myself firmly into the luddite/crack pot category if all the powerful (with much bigger digital figures) had got rid of theirs and we didn't still spend billions looking for and digging it up still? Both ways are a odd in a sense, but I'd say the older/physical based one has more validity.
I'm not sure really how we've got to the point where I feel the logic in the above is sound but that equally I still feel like I'm popping my head on the chopping block of ridicule, for saying it!
I watch/read loads of that stuff, I use here to keep me grounded and am interested in the responses.
I think it's all down to timeline, I look forward and see some sort of 2008 type failure reoccurring but appreciate the timeline could be long.
I don't live my life worrying or being too committed/entrenched in all this but I do find it genuinely very interesting and many parts of it often illogical.
I think it's all down to timeline, I look forward and see some sort of 2008 type failure reoccurring but appreciate the timeline could be long.
I don't live my life worrying or being too committed/entrenched in all this but I do find it genuinely very interesting and many parts of it often illogical.
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