Avoid Helplessness In The Next Downturn
Nobody likes to feel helpless – powerless to change their economic situation…
Many of us recently experienced this in the early days of COVID as nationwide lockdowns and social distancing orders shut down workplaces, schools, and businesses. Some saw their jobs eliminated. Others saw reductions in responsibilities and reductions in pay.
In 2008, many experienced similar helplessness as the housing bubble burst – sending the financial markets into a tailspin. There was no worse feeling than what impending retirees experienced as they saw the values of their 401k’s halved in a matter of months when the stock market crashed.
In the current economic environment, talk of recession is growing louder by the day. Many feel the recession is unavoidable – mostly of our own doing. Inflation was inevitable after flooding the market with trillions in printed money from three rounds of stimulus checks. With runaway inflation, the Fed announced a series of interest rate hikes to cool the markets and corral price hikes, which had reached forty-year highs.
Inflation isn’t the only tinder in the recession fire. War, fuel prices, and political firestorms are also fueling uncertainty, volatility, and recession fears. It’s all enough to create feelings of mass helplessness again.
YOU DON’T HAVE TO ACCEPT HELPLESSNESS!
You don’t have to be a victim of economic circumstances. You can take specific steps to avoid helplessness in the next downturn. The first is to take a cue from the ultra-wealthy.
The ultra-wealthy are highly skilled at taking the emotion out of their investments. By taking the emotion out of their investments, they can avoid the helplessness that everyone else might be feeling. How do they do it?
The ultra-wealthy are attracted to assets uncorrelated to Wall Street and the broader markets. If you’re not invested in the stock market, you won’t experience a 30, 40, or 50% drop in your 401k. This is why the ultra-wealthy turn to private investments to avoid uncertainty, volatility, and helplessness in the public markets. By allocating to productive long-term assets that are recession and inflation-proof, wealthy investors are insulated from the herd behavior and mass hysteria that plague the public markets in times of economic uncertainty.
Consider getting off the sinking boat onto a firmer footing to avoid the helplessness induced by a future recession.
Private cash-flowing assets like commercial real estate and productive businesses – especially ones that are tied to essential goods and services – with long lockup periods that prevent market sell offs are ideal for insulating your finances from recession, volatility, and inflation.
Michael Foley, president and CEO of Humabilt Capital, oversees the entitlement process, funding, and operations for Humabuilt Capital. Mr. Foley has been a full-time real estate investor since 1995 during which time he has developed hundreds of single-family homes, townhomes, condominiums, and apartments. Mr. Foley started his investment ventures in Long Beach, California, and has expanded to Apex and Durham North Carolina. Mr. Foley is a graduate of the University of California at San Diego.