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RE: Building Wealth; Market Cycles... And You Can Too!

in #economics8 years ago

I have a friend at work that is convinced the stock market is going to crash. My theory is since the fed keeps inflating our dollars away the stock market will just continue to go up over time. I'm about 50% stocks, 20% REIT and the rest in Bitcoin. I'm not sure I have the guts to pull out of the stock market with the constant gains over time.

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The way you find out if you're making true gains is not by looking at the dollar value of your holdings, but looking at your shares purchasing power in comparison to other assets like Gold, Real Estate, a gallon of milk etc. The gains made in the stock market over the last 20 years have been completely inflationary. The price of stocks are going up, yes, but the price isn't out-running inflation.

The market is kind of like those credit cards that give you cash back. They give some customers cash back, but at what cost? Great news though, investment skills transfer just fine to crypto.. Crypto is just another set of markets anyway. My advice, don't put up with the fraud, find the guts somewhere. I took baby steps but I didn't waste any time doing it.

Agreed. My advice is just to do your diligent research and whatever you decide to do, stay out of the dollar long term.

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