How to capitalise on the coming cycle?
Discussion
I'm in my early 30's and have seen/learnt enough watching the last 15 years or so to "get" the cyclical economy.
I'm wondering what is going to be the best way forward to not "miss out" on what is to come in the next 5 years or so, and set my sail accordingly.
Hindsight is lovely - would have been good to see how the 2 years after March 2020 panned out in advance....!
They way I see it, however bad a coming/starting recession is, I think one major opportunity (which will lend itself well to me, working in manufacturing/industrial supply) will be a big push for the unwinding if you like of globalisation and re- or near- or onshoring again of production. It's already in the works, and can foresee major changes with China especially in the next few years.
What do other's crystal balls say?
I'm wondering what is going to be the best way forward to not "miss out" on what is to come in the next 5 years or so, and set my sail accordingly.
Hindsight is lovely - would have been good to see how the 2 years after March 2020 panned out in advance....!
They way I see it, however bad a coming/starting recession is, I think one major opportunity (which will lend itself well to me, working in manufacturing/industrial supply) will be a big push for the unwinding if you like of globalisation and re- or near- or onshoring again of production. It's already in the works, and can foresee major changes with China especially in the next few years.
What do other's crystal balls say?
Always good to see somebody keen to make a few quid out of everyone else's misfortune! 
Debt collection, Bailiff, Boarding up services, Counselling services, to name but a few of the occupations/trades that will benefit when things get bad.
I guess its a case of thinking what skills do I have, or things can I make, that people will need more of when they get into debt troubles. And just take it from there...
Debt collection, Bailiff, Boarding up services, Counselling services, to name but a few of the occupations/trades that will benefit when things get bad.
I guess its a case of thinking what skills do I have, or things can I make, that people will need more of when they get into debt troubles. And just take it from there...
King David said:
A good strategy for the next 5 years would be to be rich.
You'll be able to take advantage of any increased savings interest rates to be had and then use all that spare money to buy up residential and commercial property at auction.
You'll be able to take advantage of any increased savings interest rates to be had and then use all that spare money to buy up residential and commercial property at auction.
So the correct strategy for the OPer was that from 2008 to today he should have been building a tidy sum and not blowing it all and having fun during the good times.
Luxury & non-essential items always fare badly in hard times, especially those with high running expenses such as hot tubs.
Expect prices on jewellery, watches, tech items, expensive cars, jetskis, boats & similar to dip. Whether you'd choose them as an investment or for your lifestyle is up to you. I acquired some lovely toys during recessions; some I resold, some I still have.
Expect prices on jewellery, watches, tech items, expensive cars, jetskis, boats & similar to dip. Whether you'd choose them as an investment or for your lifestyle is up to you. I acquired some lovely toys during recessions; some I resold, some I still have.
If you've been watching and studying the economy for the last 15 years then you haven't actually seen any aspect of what a traditional 'cyclical' economy does... because all we've seen for the last 15 years is a zombie economy propped up by constant QE and 'emergency' ZIRP.
I don't think anyone can predict just what will happen next as the economic and fiscal policies of the last 15 years have been unprecedented throughout history.
I don't think anyone can predict just what will happen next as the economic and fiscal policies of the last 15 years have been unprecedented throughout history.
Dylano said:
If you've been watching and studying the economy for the last 15 years then you haven't actually seen any aspect of what a traditional 'cyclical' economy does... because all we've seen for the last 15 years is a zombie economy propped up by constant QE and 'emergency' ZIRP.
I don't think anyone can predict just what will happen next as the economic and fiscal policies of the last 15 years have been unprecedented throughout history.
But is this the new norm?I don't think anyone can predict just what will happen next as the economic and fiscal policies of the last 15 years have been unprecedented throughout history.
Have governments tipped over the edge and bailed out too many over the last 15 years such that they can never pay the national debt and can only keep the economies going by bailing out/printing more money?
I'm no economist (but not sure whether that helps) so I wouldn't know the impact of that going forward. In the past, knowing the governments were going to order money printing meant that markets would be inflated so it was good to invest in equity. Now, the markets go down if they see growth because it means inflation is still taking hold.
leef44 said:
But is this the new norm?
Have governments tipped over the edge and bailed out too many over the last 15 years such that they can never pay the national debt and can only keep the economies going by bailing out/printing more money?
I'm no economist (but not sure whether that helps) so I wouldn't know the impact of that going forward. In the past, knowing the governments were going to order money printing meant that markets would be inflated so it was good to invest in equity. Now, the markets go down if they see growth because it means inflation is still taking hold.
New norm as it's their only option?Have governments tipped over the edge and bailed out too many over the last 15 years such that they can never pay the national debt and can only keep the economies going by bailing out/printing more money?
I'm no economist (but not sure whether that helps) so I wouldn't know the impact of that going forward. In the past, knowing the governments were going to order money printing meant that markets would be inflated so it was good to invest in equity. Now, the markets go down if they see growth because it means inflation is still taking hold.
The rate rises have already caused banking issues, but again the deposits were guaranteed to stop any contagion. What happens when the rises effect companies, and large parts of society.
I spose it comes down to when debt matters? when we as a country are again (like the gilts issue re Truss) called out on it?
I 'think' the balance here is that continual flagrant support/bail out/printing eventually gets called out and if not reined in then confidence in the currency can be affected, which I think (looking around the world where it has happened) is very much the worse case scenario?
Who knows how much and/or how long for before it's next unacceptable?
There are arguments that over 100% debt to GDP it gets harder to get real growth from more debt, there is some push back on this as Japan seem to be defying logic with their huge debt to GDP?
You/I are here picking up bits and bobs, but even economists can't agree a consensus, it's an inexact 'science' and there is so much global interconnectivity that really who is the master of it's own destiny any more?
There is also an argument that things have gone so far correcting them would be too painful/hard, so the problems are patched and pushed into the future, the status quo being largely in everyones short/medium term interests. History though tends to point towards this eventually catching up with everyone and when it does it's much worse than it might have been if dealt with earlier.........but it never is.
A recession serious enough to see quite signifcant increases in unemployment has to risk defaults and then the chance of contagion?
We've already observed what happened with SVB (and others) https://medium.datadriveninvestor.com/the-rise-and... and it shows the fragile nature of things, the FED not taking action and it was starting to sound like doomsday contagion?
Credit suisse " The bank ranks among the world's largest wealth managers and crucially it is one of 30 global systemically important banks, whose failure would cause ripples through the entire financial system." but this was resolved too.
In both cases huge deposit withdrawals caused issues, then the word comes out that your balances are insured and so people relax and stop doing it, but it fundamentally shows that not everyone can have their money back without the bank going under? In a non supported case, those withdrawing funds early would have saved themselves, others would have had the max insured limit and lost the rest above this.
The vast majority of the public find it hard to fathom that money you deposit in a bank cannot simply be returned, I put it in there (sometimes physically) so it's there to give back when I want it!? When they do see this isn't necessarily true they are still then made comfortable as long as it's insured by the FED/Government, when that's simply a statement and arguably a confidence trick?
I genuinely feel like it's an area where the more you look into it the more questions you end up having and most people, despite money being a fundamental in everyones life, don't even delve in to a basic level?
Makes me think of this Henry Ford Quote
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
I found this a very interesting read and like it could almost apply to today.......
Franklin Roosevelt 1933
https://www.fdic.gov/about/history/3-12-33transcri...
Franklin Roosevelt 1933
https://www.fdic.gov/about/history/3-12-33transcri...
Scootersp said:
New norm as it's their only option?
The rate rises have already caused banking issues, but again the deposits were guaranteed to stop any contagion. What happens when the rises effect companies, and large parts of society.
I spose it comes down to when debt matters? when we as a country are again (like the gilts issue re Truss) called out on it?
I 'think' the balance here is that continual flagrant support/bail out/printing eventually gets called out and if not reined in then confidence in the currency can be affected, which I think (looking around the world where it has happened) is very much the worse case scenario?
Who knows how much and/or how long for before it's next unacceptable?
There are arguments that over 100% debt to GDP it gets harder to get real growth from more debt, there is some push back on this as Japan seem to be defying logic with their huge debt to GDP?
You/I are here picking up bits and bobs, but even economists can't agree a consensus, it's an inexact 'science' and there is so much global interconnectivity that really who is the master of it's own destiny any more?
There is also an argument that things have gone so far correcting them would be too painful/hard, so the problems are patched and pushed into the future, the status quo being largely in everyones short/medium term interests. History though tends to point towards this eventually catching up with everyone and when it does it's much worse than it might have been if dealt with earlier.........but it never is.
A recession serious enough to see quite signifcant increases in unemployment has to risk defaults and then the chance of contagion?
We've already observed what happened with SVB (and others) https://medium.datadriveninvestor.com/the-rise-and... and it shows the fragile nature of things, the FED not taking action and it was starting to sound like doomsday contagion?
Credit suisse " The bank ranks among the world's largest wealth managers and crucially it is one of 30 global systemically important banks, whose failure would cause ripples through the entire financial system." but this was resolved too.
In both cases huge deposit withdrawals caused issues, then the word comes out that your balances are insured and so people relax and stop doing it, but it fundamentally shows that not everyone can have their money back without the bank going under? In a non supported case, those withdrawing funds early would have saved themselves, others would have had the max insured limit and lost the rest above this.
The vast majority of the public find it hard to fathom that money you deposit in a bank cannot simply be returned, I put it in there (sometimes physically) so it's there to give back when I want it!? When they do see this isn't necessarily true they are still then made comfortable as long as it's insured by the FED/Government, when that's simply a statement and arguably a confidence trick?
I genuinely feel like it's an area where the more you look into it the more questions you end up having and most people, despite money being a fundamental in everyones life, don't even delve in to a basic level?
Makes me think of this Henry Ford Quote
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
Yep, what he said The rate rises have already caused banking issues, but again the deposits were guaranteed to stop any contagion. What happens when the rises effect companies, and large parts of society.
I spose it comes down to when debt matters? when we as a country are again (like the gilts issue re Truss) called out on it?
I 'think' the balance here is that continual flagrant support/bail out/printing eventually gets called out and if not reined in then confidence in the currency can be affected, which I think (looking around the world where it has happened) is very much the worse case scenario?
Who knows how much and/or how long for before it's next unacceptable?
There are arguments that over 100% debt to GDP it gets harder to get real growth from more debt, there is some push back on this as Japan seem to be defying logic with their huge debt to GDP?
You/I are here picking up bits and bobs, but even economists can't agree a consensus, it's an inexact 'science' and there is so much global interconnectivity that really who is the master of it's own destiny any more?
There is also an argument that things have gone so far correcting them would be too painful/hard, so the problems are patched and pushed into the future, the status quo being largely in everyones short/medium term interests. History though tends to point towards this eventually catching up with everyone and when it does it's much worse than it might have been if dealt with earlier.........but it never is.
A recession serious enough to see quite signifcant increases in unemployment has to risk defaults and then the chance of contagion?
We've already observed what happened with SVB (and others) https://medium.datadriveninvestor.com/the-rise-and... and it shows the fragile nature of things, the FED not taking action and it was starting to sound like doomsday contagion?
Credit suisse " The bank ranks among the world's largest wealth managers and crucially it is one of 30 global systemically important banks, whose failure would cause ripples through the entire financial system." but this was resolved too.
In both cases huge deposit withdrawals caused issues, then the word comes out that your balances are insured and so people relax and stop doing it, but it fundamentally shows that not everyone can have their money back without the bank going under? In a non supported case, those withdrawing funds early would have saved themselves, others would have had the max insured limit and lost the rest above this.
The vast majority of the public find it hard to fathom that money you deposit in a bank cannot simply be returned, I put it in there (sometimes physically) so it's there to give back when I want it!? When they do see this isn't necessarily true they are still then made comfortable as long as it's insured by the FED/Government, when that's simply a statement and arguably a confidence trick?
I genuinely feel like it's an area where the more you look into it the more questions you end up having and most people, despite money being a fundamental in everyones life, don't even delve in to a basic level?
Makes me think of this Henry Ford Quote
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
Krhuangbin said:
I'm in my early 30's and have seen/learnt enough watching the last 15 years or so to "get" the cyclical economy.
When you “got” it, did you take into account that cyclicality is only part of the picture and it’s the event triggers are as (sometimes more) important than the notion of there being cycles?cookie1600 said:
King David said:
You'll be able to take advantage of any increased savings interest rates to be had .
Well that isn't working currently anyway, as the banks aren't passing the rate rises (to any real degree) to us savers!My mortgage repayments are almost higher than the rent I charge but is fine as it's just serving to clear the mortgage faster than previously anticipated.
LooneyTunes said:
When you “got” it, did you take into account that cyclicality is only part of the picture and it’s the event triggers are as (sometimes more) important than the notion of there being cycles?
As demonstrated very well by Covid in 2020 and Ukraine in 2022. Covid was an opportunity to buy affected stocks cheaply; unfortunately IM never did a 'PH Ukraine' portfolio... 
Zero Fuchs said:
My BTL mortgage has just gone up to 9.24% which would normally be a nightmare but strangely, it has an offset facility so will be clearing it down at a rate of knots.
Surely with an offset you don't care if its 1% or 50% and you wont pay it off any quicker or slower either assuming you are "fully" offsetting it.... 
cookie1600 said:
Well that isn't working currently anyway, as the banks aren't passing the rate rises (to any real degree) to us savers!
That narrative is nonsense though isn’t it. You wouldn’t expect a zero percent credit card forever so why expect all banks to give up margin on lazy money. Fact is there’s risk free +6% rates out there for those that wish to spend more than half an hour shopping round and moving their cash. Gassing Station | Finance | Top of Page | What's New | My Stuff