Whether you
are a high net worth investor or an average Joe, you must reconsider all you
think you know about investments. The economic climate has undergone an unheard
of evolution. Common sense financial staples no longer contribute to the growing
trends in the markets. Change has always been a purveyor of obstacles, yet most
of these obstacles are self-inflicted.
The ability
to embrace change and actually warm up to it has always been a gift of being
counter-intuitive. The vast majority of our population doesn’t take well to
change. The obvious emblem of this was the vastly popular book “Who Moved My
Cheese” in which Ken Blanchard made the case for counter-intuitive thinking.
I submit
that we are now in the greatest time of change that our society has witnessed
over the last century. Everything old is not going to become new again.
Unfortunately we raced towards moral hazard and have accepted the fate that
comes along with ignoring the simple and common sense principle of moral
hazard. The issue is not debating the virtues of moral hazard, the issue is
accepting change and enriching your life through a counter-intuitive mind set
about investing.
Hockey Icon Wayne
Gretzky said that his success was due to the fact that his philosophy on the
ice was to “go where the puck was going to be and get there first” now this is
highly counter-intuitive behavior. Well, as an investor you need the same
philosophy, “understand where we are headed and make decisions based upon this
forecast.”
Here are
several points to consider in your counter-intuitive approach:
1. The US will be heading into recession
once again.
2. Invest in companies that are
recession proof and thrive during recessionary periods.
3. Avoid all dividend paying companies
that are not recession proof.
4. The US will continue to expand debt
at an unheard of pace.
5. Follow the financial products and
services that correlate positively with increasing debt.
6. Commodities, oil&gas, precious
metals all trend upward as debt increases.
7. The US government has set their
sights on the qualified retirement plans (401k, IRA, SEP, Keogh, any ERISA
based plan) which have approx. $13-16T in assets under control.
8. The government snatch on these plans
will begin with a plain vanilla tax reform act which will reduce maximums,
limited tax deductions and moderate the percentages of investment vehicles.
9. The second stage assault on qualified
plans will be a mandate on what types of investment vehicles the funds may
invest in (The government will require a huge percentage be invested in US
treasuries)
10. The final assault will be a GRA
(government retirement account) much like social security this account will
freeze your principal funds and turn them into an annuitized retirement payment
with you having no control over your funds.
At the
Advocacy Network our goal is to inoculate and insulate investors and consumers
from scams, fraud and predatory sales tactics. This is a preventative process,
not a reactionary one. In order to fully insulate you requires a
counter-intuitive approach. Most people will not agree as they will stay put in
the normalcy syndrome continuing to believe that things will return to the same
as they once were. The rubber band has snapped and we are not going back to any
familiar circumstances. The change is already occurred and is continuing to
evolve, don’t allow it to consume you. Self-reliance will be at a premium and
those who take a proactive counter-intuitive approach will be the biggest
winners.
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