RE: Steem Bounty - What is the Best Thing to Do When You Expect the Stock Markets to Plummet in the Next 6-12 Months?
Well, if you expect/know that the stock markets are going down in a few months, as well as the entire economy, then I would say it becomes important to look at some place to 'cash out' into.
Normally I would say 'Sell all your holdings now' and wait for the markets to crash, and then buy back in. Like the big dogs do.
But the differentiating variable here is that the economies of the world are likely to take a hit too. Cashing out into FIAT may be suboptimal if that tanks too. It's tempting to say that crypto will flourish in these situations but this is a large gamble at the very least.
When everything goes to hell I think it's important to look for investments that will always be valuable. Some people swear that Gold qualifies for this but I'm not so sure. You'd have to check the correlations between stock market crashes and the gold price for this.
Other things that will always be in demand are: food, undertaking/burials, high luxury goods (the rich are never truly poor), gambling (according to the Sopranos it's never in a recession!).
You know what's a good investment that pretty much always makes money? an ice-cream stand.
It all depends on how big things are going to crash though. If we're all going to end up in extreme poverty and in hunger, you might want to buy farmland instead. Or land in general, is always a good investment (they ain't making any more of it). So you'd have to know more about the extent of the crash too.
More practical though, you could try looking for economies and opportunities that exist outside of the affected region. Perhaps there is an investment opportunity in some small 2nd or 3rd world country, which trades with a neighbouring country, and which exists more or less seperate from the global world economy. Maybe invest in emerging (asian?) economies.
The more I think about it, the more I think that when the true black swan crash happens - nothing will be safe. No asset can retain value when the mass is selling whatever they can to cut their losses. Possibly the best thing to do is try and acquire human capital or just get land. People will always be able to produce value, and land is limited and will go up again in due time unless millions of people die/disappear overnight.
Or, yeah, buy Bitcoin?
Thanks for the reply @pandorasbox!
Gold seems to hold up pretty well during crashes of the stock market (https://goldprice.org/gold-price-chart.html). Also, gold seems to go up when more money is printed (USD). On the other hand you might say that the gold price is artificially high now since the US started printing a s***load of it in the last 10 years. Not sure what that will do.
Land is indeed interesting, it has its use and supply is finite. I do however think that land and houses are positively correlated with the stock market (based on 2008 crash). But, that is more of a feeling than fact checking from my side.
Extreme poverty is unlikely, I expect something like 2008, maybe a bit worse. Governments saving private companies etc...
I find it difficult to determine what will go up if the rest goes down. I'm also tempted to say crypto, but we'll have to see whether the rest of the world thinks so too. Actually, the big guys getting into crypto and realising nice gains, might temporarily cover up the problems and delay a crash. But that is only when they get in big time, and fast ;-)
We'll see.
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