Good analysis!
But with negative real interest rates, and the market still overinflated, what’s a saver to do?
Suggestions?
Buy physical silver and gold, as well as making the usual domestic preparations.
Wish I knew. I’m retired and facing the same dilemma as everyone. I’ve been involved with the markets since the early 70s.
Been bearish on the financial markets for some time due to 1- US boomer demographics (i.e IRAs/401Ks hoping to retire boomers drove it up, and retired boomers will crash it) and, 2- a belief that the system is being gamed at all levels from banks to politics (both aisles) to CEOs. Crony capitalism doesn’t work. We need capitalists and business taking risk and they alone paying the price if they fail (not taxpayers). Kickbacks and govt connections are subsidizing every level of business.
We are still in a period of fraudulent accounting driven by excessive greed from those at the top. Corporate CEO compensation is tied to manipulable short term changes in stock prices. To be honest my market skepticism began when Ken Lay and others were able to easily scam the system. Except for a small 10-15% allocation I was out of the financial equity markets even before 2008.
Diversification is a must in asset investment classes including prec metals and real estate, and among those institutions where you hold your nest egg. i.e. Not only have many different colored eggs but keep them in different refrigerators. Twenty years ago the market “gurus” were claiming 10% annually could be attainable into the future with minimal risk. They lied. Everything we are told by the financial media is to benefit a certain segment and it is generally not Joe average. The Central Banks as usual are working against you.
Today we need to be in defensive mode and scale back everything from expected returns to expenditures and expect minimal returns on fixed income. If you stretch for yield by increasing risk you risk losing it all at these levels. This gradual perception that consumers must scale back in demand is killing the economy too and feeding into the hunkering in psyche.
But this is about catch up time from the debt driven excessive bubble good times during the 80s, 90s and some of 2000s. The credit card was an illusion of wealth that the US government and consumers used and now the debt is coming due. We used it for foolish wars and to cover up for the fact that Congress gave away our economy to China, etc.
Take care and at some point we’ll look forward to good times. Sorry for my blabbering. What are your thoughts?