Hedging against the US economic volatility

[ナルゴ]

This thread is for discussing strategies in how to preserve your money in uncertain times.

Common hedges:
-Real Estate
-Commodities, utilities, healthcare, and energy sector stocks. Basically holding shares in industries that have inelastic demand
-Defense and security stocks. Since the US government wants war, they'll be giving more money to the military industrial complex. Might as well invest in them as well.
-Precious metals (Gold, Silver, Copper, etc)
-Some people are also buying crypto, but I ain't touching that dumpster fire.


Why is a US economic reset coming?
https://www.youtube.com/watch?v=sRi9rEpc4JI

[mai72]

I have over $400k invested in the S&P 500. All index, VOO. About $10k in dogecoin that I will probably never recover. This is my thought on the economy.

We are headed into some type of a horrible recession, maybe even a depression. History is cyclical. Look back at the roaring 1920's to see the comparison with the 2020's. Most of the wealth you saw back then and today is FAKE. How fake? Its faker than a $8 bill. Ask most of the people you see who are driving expensive cars to show you their investments. Most don't have any. If you peeked into their bank account you'd probably notice that they have little savings. Paycheck to paycheck.

I drive a crap car. Its a 2006 Hyundai. Has 92k miles, and rust on the hood. Its a very clean car inside so I don't care. No rips. Its very clean. The money that I would be spending on a car payment is immediately invested. It gets me from A to B reliably. While you are in stress because you are having difficulty with your monthly car payment, which for many is $700 a month, I'm continuing to build wealth.

BTW, if you buy from any American company (Nike, Apple, McDonalds to name a few) thank you for making me a wealthy man. Your commitment to looking good, because you sadly care about what others think about you, is money in my bank account.

And for that I salute you.

[funewchie]

โพสต์ดั้งเดิมโดย mai72:

I have over $400k invested in the S&P 500. All index, VOO. About $10k in dogecoin that I will probably never recover. This is my thought on the economy.

We are headed into some type of a horrible recession, maybe even a depression. History is cyclical. Look back at the roaring 1920's to see the comparison with the 2020's. Most of the wealth you saw back then and today is FAKE. How fake? Its faker than a $8 bill. Ask most of the people you see who are driving expensive cars to show you their investments. Most don't have any. If you peeked into their bank account you'd probably notice that they have little savings. Paycheck to paycheck.

I drive a crap car. Its a 2006 Hyundai. Has 92k miles, and rust on the hood. Its a very clean car inside so I don't care. No rips. Its very clean. The money that I would be spending on a car payment is immediately invested. It gets me from A to B reliably. While you are in stress because you are having difficulty with your monthly car payment, which for many is $700 a month, I'm continuing to build wealth.

BTW, if you buy from any American company (Nike, Apple, McDonalds to name a few) thank you for making me a wealthy man. Your commitment to looking good, because you sadly care about what others think about you, is money in my bank account.

And for that I salute you.

...And when the economy gives out, all that money of yours evaporates, and just becomes worthless scraps of cloth-paper.

Like that old adage about men "throwing their gold and silver into the streets", because it's all completely valueless now.

[ナルゴ]

If the economy becomes hyper-inflationary, then fiat will becomes near worthless, yes. The point is to diversify out of the USD fiat.
Because gold has intrinsic value (used in electronics, finance, dentistry, cosmetics, etc). Real estate has intrinsic value. Shares in companies that will survive the bad times have intrinsic value.

When the Weimar republic went into hyperinflation. Enough that people were getting ill from counting all the 0's https://en.wikipedia.org/wiki/Zero_stroke

Those who had shares in companies that produced essential commodities like food were better off. Because they held part ownership over something that had inelastic demand.
People can't exactly just skip eating. Not for long anyways.

[Acetyl]

The government has confiscated gold during depressions before.

[Thadeus]

Buying gold is dumb.

If you have a bunch of money invest in real estate. Not only it doesn't depreciate over time and can't be stolen or confiscated by the government, but you can also rent it out and get way more than what a bank would pay you in interest.

[ナルゴ]

New report from the US Bureau of Economic Analysis
https://www.bea.gov/news/2024/gross-domestic-product-first-quarter-2024-advance-estimate
https://finance.yahoo.com/news/gdp-us-economy-grows-at-16-annual-pace-in-first-quarter-falling-short-of-estimates-while-inflation-increases-123328820.html

The US economy grew at its slowest pace in nearly two years last quarter as inflation topped Wall Street estimates.

The Bureau of Economic Analysis's advance estimate of first quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 1.6% during the period, missing the 2.5% growth expected by economists surveyed by Bloomberg. The reading came in significantly lower than fourth quarter GDP, which was revised up to 3.4%.

Meanwhile, the "core" Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 3.7% in the first quarter, above estimates of 3.4% and significantly higher than 2% gain in the prior quarter.

“This report pours cold water on the misleading narratives of a reaccelerating economy," EY chief economist Gregory Daco wrote in a research note following the print. "As we enter the spring, the underlying growth mix continues to signal robust momentum, but demand growth is gently cooling leading to easing inflationary pressures.”

High inflation, bad energy policy, debt to GDP ratio at a record high, and a stagnant economy.
And the current administration still keeps printing and overspending

[BigBallinChester]

My entire life people told me the world was going to end or the economy was going to get super bad.
It hasn't happened yet, it probably wont with modern economies. All that said, I would stay away from crypto that is just asking to get scammed, it has even less value than fiat money.
I would invest in companies that shown to grow and from countries that have transparency laws, nothing like China where they can effectively liquidate your holdings or flat out be allowed to lie.

I would also invest in land, physical land you can get to. Land will always be valuable, even Russia who has the most is willing to invade it's neighboring countries for it. If you are in the new world, land with trees would be even better.
I would also invest in land near cities as they historically always had some decent value.

investing in your family and friends too if you can trust them. One day you may have to rely on them or them on you.

[BigBallinChester]

โพสต์ดั้งเดิมโดย Nargo:

New report from the US Bureau of Economic Analysis
https://www.bea.gov/news/2024/gross-domestic-product-first-quarter-2024-advance-estimate
https://finance.yahoo.com/news/gdp-us-economy-grows-at-16-annual-pace-in-first-quarter-falling-short-of-estimates-while-inflation-increases-123328820.html

The US economy grew at its slowest pace in nearly two years last quarter as inflation topped Wall Street estimates.

The Bureau of Economic Analysis's advance estimate of first quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 1.6% during the period, missing the 2.5% growth expected by economists surveyed by Bloomberg. The reading came in significantly lower than fourth quarter GDP, which was revised up to 3.4%.

Meanwhile, the "core" Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 3.7% in the first quarter, above estimates of 3.4% and significantly higher than 2% gain in the prior quarter.

“This report pours cold water on the misleading narratives of a reaccelerating economy," EY chief economist Gregory Daco wrote in a research note following the print. "As we enter the spring, the underlying growth mix continues to signal robust momentum, but demand growth is gently cooling leading to easing inflationary pressures.”

High inflation, bad energy policy, debt to GDP ratio at a record high, and a stagnant economy.
And the current administration still keeps printing and overspending :lunar2019crylaughingpig:

Funny you mention current administration when all recent administrations have been printing and spending money.

[Original Cast Recording]

โพสต์ดั้งเดิมโดย Nargo:

...

High inflation, bad energy policy, debt to GDP ratio at a record high, and a stagnant economy.
And the current administration still keeps printing and overspending :lunar2019crylaughingpig:

And consumers can't stop eating Chipotle.

[OoOoOoooOOoOoorgle]

"preserve money" lol
money being meaningless is exactly why (and how) all this ♥♥♥♥ is happening

Folks should acquire and preserve food & water sources, fuel sources, weapons (incl. some that don't run on ammo), bottle caps , and have a portable energy supply or generator

[ナルゴ]

Summary of earnings reports for 3 big tech companies. Microsoft, Meta, and Alphabet
https://www.youtube.com/watch?v=5VeZdJgvV_8

Intel beatings expectations, but Q2 outlook is not good
https://www.youtube.com/watch?v=qx7hVaG-f1w

Tesla missed expectations, but stock went up regardless because the market believe it was oversold.
https://www.cnbc.com/video/2024/04/25/billionaire-investor-ron-baron-expect-teslas-stock-to-go-up-huge-now.html


Love this guy's reaction
https://twitter.com/NorthmanTrader/status/1783227480838422662

[permanent name]

too complicated, too much work. us already doing it itself. wrong area of competition for a single individual who is less than totally focused on this one issue.

[ナルゴ]

Republic First Bank has failed and will likely be sold to Fulton Bank. The first FDIC-insured bank to fail in 2024

https://www.reuters.com/business/finance/us-regulators-set-seize-republic-first-bancorp-wsj-reports-2024-04-26/
https://www.cbsnews.com/philadelphia/news/republic-bank-failure-fulton-bank-pa-nj-ny-fdic/
https://www.forbes.com/sites/tylerroush/2024/04/27/heres-what-led-to-republic-firsts-collapse-and-why-its-different-from-2023-failures/?sh=5b8dd1bc5878


Remember that last year, the Federal Reserve published this:
https://www.federalreserve.gov/supervisionreg/files/board-briefing-on-impact-of-rising-interest-rates-and-supervisory-approach-20230214.pdf

At third quarter end, 722 banks reported unrealized losses exceeding 50% of
capital

Something to pay attention to as more regional banks may be failing soon if the stagflation continues.

Like last month, New York Community Bancorp was narrowly saved by being pumped 1 billion dollars.
https://www.cbsnews.com/news/new-york-community-bank-stock/
https://www.reuters.com/business/finance/nycb-closes-1-billion-capital-infusion-deal-2024-03-12/

[=(^ ^)=]

The whole BRICS doesn't even cover half of the GDP of the European Union. A part from China and a little of India, the rest do not even qualify to the top 10 richest countries in the world.

[ナルゴ]

GDP is a terrible way of measuring wealth. GDP isn't everything.
https://www.scientificamerican.com/article/gdp-is-the-wrong-tool-for-measuring-what-matters/

Whether you like it or not BRICS are in possession of a sizeable portion of the world's global oil reserves, food production, commodities production, and manufacturing.
Real assets > Money