Financial Crisis Round #2?

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This site contains advice on a little bit of everything as mentioned elsewhere however financials are the most important parts of our lives. Even if I get you some medical advice (always consult your physician) you still will need to pay the hospital bill on the way out. So trying to help you all understand how to live a smarter financial life, will make your whole life a lot easier and a lot happier. 

We all remember obviously what happened many years ago in 2007 with the disasters where markets across the globe collapsed due to a housing bubble. Although it has been so many years, it still fresh in our memories because the effect that had is still felt in some people today. What I want to do in this article, is point you towards a similar direction. I am not saying that a crash as big as 2007 will take place, but a crash maybe larger will come along very soon. If you are paying attention at the markets at all (and not just the stock market) you will see everything overvalued. With the election of our new president, we had what people in finance called the “Trump Rally.” What that really means for us trying to understand financials, is that this whole uplift in the DOW etc, is only passion and is only emotion: there is no substance to hold these things together. There is nothing beneath this emotion to justify these prices. What I’m trying to say is that companies, since the election of Donald Trump haven’t been earning more – or at least here wouldn’t be enough time to measure such a statistic piece of information. You remember how the night he was elected, the market just sky-rocketed after a quick dip. That is no company performance or anything that has to do with how well a company is perceived in the market. It has to do purely with a hope, a trust in something much brighter and something greater in the future.

I hate to be the one to tell you this (so don’t kill the messenger) but this is all total crap. A president can definitely influence the way the stock market is moving and basically influence the economy, but one person can not clean up so fast the mess that has been left behind under Obama. There is just so much work that needs to get done, and with $20 trillion in debt, it is getting tighter and tighter. So I want you all out there (regardless of whether you are a Trump supporter or not) to understand that no matter who the president is, you personally are not going to be financially well of if you don’t put one leg in front of the other and starting moving. Even if things are well in a country financially, if you personally don’t do something, you will find yourself waiting in a food line. It’s that simple and you need to understand that. When I see people taking vacations (which right of the bad – as a concept is bad) but most importantly spend tons of money either on those trips or in their daily lives, maxing out their credit cards etc,  all I can say to those people is that they are so foolish. I am definitely not suggesting you save for the long run, that is probably more stupid than spending. But what I am saying is don’t do reckless spending at times that aren’t secure one bit. Even when times are good, you can’t go out and spend lots of money. Be smart and invest in the future. Start getting into real estate maybe and make some safer investments (if you are so terrified.) Start building up your investment portfolio. Whatever you do, gambling in Vegas or playing in the stock market without having a clue of what you need to do, won’t get you to financial success I can promise you that.

So getting back to the little crash theory: I can not say when a crash will take place, but within the next 2 years we should see a setback in the markets. There will be a significant dip that we all will feel. Whether that is going to be a huge crash like in 2007, I honestly don’t know: that would depend on the panic selling effect (which I expect to be higher this second time around.) It could be greater than 2007 it could be a smaller financial crisis. In any case, it is going to be something that will affect you, so you should start preparing yourself. You should of done that already in 2009-2010 when everything was so dirt cheap. But even now is not late. Make sure you do something that will make sense years down the road. Partying and going on cruises to the Caribbean isn’t exactly the most wise financial move on your end.

Send me your questions and concerns – happy to help!