This post was originally published on jpfs.com
That’s a song by Martha Reeves and the Vandellas from 1965. It is also the current situation for the whole of humanity.
Having preached about the coming of the present economic situation for over 6-months, I am not going to carry on preaching.
Let me discuss where I am.
I have fared much better than most over the past 6-months because of a widely diversified portfolio, and my massive risk reduction. But that doesn’t mean I am undamaged by this decline. We are all in the same boat, on the same planet.
The big question that most of us face is what will happen to the economy and our financial circumstances over the coming years?
No one has a crystal ball, but there are some things we need to consider seriously.
I am not going to bullshit anyone, it’s going to be tough, real tough, and if you haven’t been preparing for what’s coming, it might be too late already.
I read a great quote this week, and it applies to 90% of the current investment world:
“Today, we are all good at multitasking. We can read, ignore and forget, all simultaneously!”
That explains many of the posts I have seen on social media recently.
From now on, those who survive will be those who take investing seriously and can apply flexibility to their investing.
This weekend, it came to my attention that over 50% of funds specializing in buying cryptocurrencies have closed shop. Furthermore, over 50% of investors who have chosen HODL as a strategy are now losing money (and we are bound to see this number rise!)
As Jack Nicholson famously said: The truth, you want the truth. You can’t handle the truth!”
I’ve got to be honest with you people.
I write to help investors make better decisions, full-stop!
It is great to have a following, but if you write to build a following, then, in my opinion, your priorities are wrong.
One positive thing that will come out of this recession is that many cowboys, who seem in it for the clicks, will be forced to close shop and go elsewhere.
I love the world of investing and speculating, so it makes me upset when I see people unnecessarily losing money because they followed advice from cowboys who do their analysis on the back of a cigarette paper.
Yes, I said it!
So, what can we do?
Everyone reading this will be losing money.
Some of you from bad investments and others from the rampant inflation and economic decline, and this economic downturn will last much longer than we expect or wish.
There is little you can do about inflation, but you can do a lot about how much you spend and what you buy.
Food is a necessity, and there will be food shortages.
I am not talking about the type of shortages we saw at the beginning of Covid when people started to panic buy.
I am talking about real shortages of staple commodities that last a long time.
In November 2021, I wrote that you might be better off buying the farm instead of betting the farm on cryptocurrencies or equities. I have some land, and I am happy about it.
It’s not too late. Agricultural land is a must. It’s a good investment, and if, like mine, it has a water source, all the better.
I have some silver and a little gold. It has not given me any great return over recent months, but I am not getting rid of it in a hurry. With precious metals prices still relatively soft, owning a few precious metals is still good insurance, in my opinion.
I have a basket of currencies I keep, and this helps relieve some of the pain.
As I mentioned in previous reports, the dollar will weaken, but it might do better than other western currencies, such as sterling and the Euro.
So far, this is going well. But I have also expanded out of western currencies into commodity currencies, including the Yuan and the rouble.
People may say this is not politically correct, but to hell with that. Political correctness will only make you hungry! We need to look after ourselves and protect our wealth.
Now to address investors and speculators.
There is more pain to come, especially for crypto holders who championed the idea of HODL. (God knows how often I have said this is not a good strategy, if it is a strategy at all).
I am not saying you should dump your crypto now. Because if you have a quality currency, you might do OK. But there is no guarantee that your coins or tokens will be tradable in 2-years’ time, and I am sad to say, this might include a few stable coins.
I say that as a holder of a few coins, mainly CCD, and as someone who will add to these when the market declines further. However, being a realist, I am fully prepared to lose money on these coins should things go wrong.
Because of my background, I manage my own portfolio and do not feel the need to employ a fund manager for this activity. But I strongly suggest that people with less experience, who have sizable assets and exposures, look for seasoned fund managers to manage their portfolios.
I do not manage funds, so I am not saying this for commercial gain.
I suggest seeking out professional players because too many self-trading investors are getting screwed by taking notice of the poor analysis they receive in their mailboxes and on social media.
When you go to court, the judge will always inform you it is not a good idea to represent yourself. In my opinion, the same applies to investing in financial markets. Get a specialist!
That is easier said than done. (God knows how many glossy brochures with backdated performances I get sent weekly. Few are worth reading, and even fewer have what it takes).
I advise finding a fund with a manager who has been active for at least 10-years and has a proven track record.
Find a fund that trades all asset classes and a fund that trades both long and short.
There is no guarantee that the fund manager will equal their past performances. Still, in my experience, people who have been around for over a decade and can be flexible in their activities consistently outperform a novice investor or someone who has strict noose-like restrictions on what their fund can trade.
This report will annoy a few people, but reading back, it only summarizes many of the comments I have made over the past year.
As I pointed out at the beginning of this report, there is nowhere to run.
Be proactive, do not complain about what has happened.
There might be more problems on the horizon, but you must keep going forward!
The Old Man’s Views
Nowhere to run to baby, nowhere to hide!
appeared first on JP Fund Services.
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