The economic experts are weighing in around the world. Â Some are predicting that we will see another downturn in a matter of months, six at the most. Â Others experts are firm in their opinion that a double dip recession is not something that can happen in this day and age.
Expert opinions are just that, opinions. Â It's interesting to observe the banter among them, but for the average person, we don't put our whole life in the hands of someone's opinion. Â We want facts. Â We want to be prepared. Â We want to know if the worst is actually yet to come. Â Mostly, we want to know what a so-called double dip means to the common working class family. Â Read more...
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Comments: 2
I considered their opinions and suggestions, and I made a decision to be a contrarian investor, and liquidated 90% of my equities into cash (money market) in January of 2008, and stayed there until January of 2009. If I had taken their advice, I would have lost over 35%, as many of my poor friends did. The same financial planners tried to reverse my initial decision to cash out, so I fired them. My instinct proved to be correct as I watched the market make a sudden turn southward in September of 2008.
I continued on my contrarian stance. In March of 2009 when most investors were becoming more fearful, I jumpted back in with 20% of my cash into equities. I quickly made six figure profits in few months. In one example, my Ford stocks soared from $2 to $6, and I made $50K just from that.
Why am I telling you this? I am now retreating again. I am selling my equities as I see too many dark clouds heading this way. If any keen observber has studied the Great Depression of 1929 - 1933, the initial crash in October of 1929 appeared to be very dramatic (350 down to 230), but this was just a tip of the iceberg. For the next 6 months, the market started to recover from 230 up to 300. But the real damage occurred from the spring of 1930 to the spring of 1933 when the Dow dropped from 300 points down to 50. Those three years created a huge unemployement plus many bank failures.
The moral of the story is this: These so called experts are more than 50% wrong. They are too blind to think for themselves and they follow the herd. Most of them are lemmings that gladly jump off the cliff laughing as they did in 2008 until they realized it too late.
That's why I agree with one line in the article, as its author suggests, "As far as the future goes, we can all hope for the best, but we should prepare for the worst."
I am prepared.
http://www.npr.org/blogs/money/2010/08/02/128937820/understanding-deflation