What is Your Plan if the Market Continues to Tank?
Warren Buffet has said his Rule #1 about investing is: “Don’t lose money. Rule #2: See Rule #1. Hudson Yards is an enormous project on New York City’s western edge. It will cost $25 billion covering 28 acres and will take 7 years to complete. Stephen Ross, the development company founder, has been quoted as saying: “Hudson Yards is not all about the money. Really, it’s about transforming something and what you leave behind.”
I think rule #3 about investing money should be that if someone says “it’s not about the money ” in reference to an investment you should head for the exit. Sounds a lot like a politician. When completed it will be the most expensive building in the US. You know that it is going to cost more than anticipated and then the developers are going to want the taxpayers to bail them out. Just as in 2004 when City Center was developed in Las Vegas it ended in a shambles and the developers wanted the taxpayers to bail them out.
As I write this article the stock market has dropped 1,392 points in two days. Japan’s market fell 3.9% and Chinese stocks fell 5.2% to their lowest since 2014.
I have been writing for weeks that the market could roar ahead for the next few years…or it could all come tumbling down.
A major US retailer, Sears, is on the verge of bankruptcy. If it closes its doors 150,000 jobs go with it. According to the WSJ on 10/11/2018 creditors of Sears are pushing for liquidation. The value of the real estate the stores stand on is worth more than the company. I can remember as a child when Sears was the first place your parents went for appliances. Last August Sears’ stock was trading around $9 a share (down 95% from its peak). Today shares are worth less than 50 cents.
Around 35% of companies in the Russell 2000 Index haven’t earned a profit in the past 12 months. You better believe their pension accounts are not properly funded. 14% of companies in the S&P 500 can’t cover the interest on their debt. Right behind them is, you guessed it: The US. Government.
Not if but when the economy tanks what are you going to do for additional income? What if your company lays you off? What if you can’t pay your bills? The days of loose money and no restraint on spending is coming to an end. If you do not start planning now you are going to come up short.
What is holding you back from deciding to move ahead? You cannot break out of a prison if you do not realize you are in one. You have to focus on prosperity and abundance or you are going to be in the same place this time next year. As Bob Proctor says: “You have to have a Paradigm Shift otherwise your present paradigm is going to keep you in jail forever.”