“WATCH THIS” (And Other Suicidal Phrases)
If you believe my friend John who works at a center for spinal injuries, these could be the four most dangerous words in the English dictionary!
John has a tender heart and a tremendous amount of compassion for the patients he treats. But sometimes he has to laugh at the stupid stunts that ultimately lead to some serious injuries.
Like the time a wise guy sat on top of a bucket of dry ice in a swimming pool… only to get launched 40 feet above the deck when the dry ice got wet and exploded.
Just before the incident, he was reported to have yelled to his friends, “Hey guys, watch this!!”
When it comes to the market and your investments, there is another set of four words that can lead to doom for your wealth.
Do you know what they are? If so, you can quickly let me know your guess by clicking here before you scroll down.
The Four Most Dangerous Words…
There’s one phrase that makes my skin crawl every time I hear it.
“This time it’s different”
Did you guess correctly?
It’s the one thing that investors most often say just before pulling a stunt that loses them a ton of money.
Or sometimes it’s what they say just before missing out on a chance to make a life-altering amount of extra money.
Today, I’m very concerned with the rhetoric I’m hearing about the market from so many media outlets.
Thanks to their skeptical mindset, their political biases, and some very sloppy and lazy research, these “experts” are trying to convince you to pull money out of the market. They’re telling you that your investments are at risk, and that a major financial crisis is just around the corner.
This flies in the face of what we know about the way markets really work.
As you know, we’ve been talking about the strength of this market for quite some time.
Corporate profits continue to grow steadily. The job market continues to be strong and wages are rising month after month. Consumers are confident and their purchases continue to boost economic growth. Even the real estate market has been quite strong thanks to strong demand and historically low interest rates.
All of these factors naturally help to boost stock prices. And it’s especially encouraging to see this type of growth in spite of the challenges that come with the current trade war with China.
Imagine how strong our economy and our stock market could be if the trade war was resolved!
As investors, we need to remember to keep our eye on the fundamental issues that actually drive stock prices higher or lower.
And those fundamentals are telling us that we can expect continued strength in the market.
And now, thanks to a new shift that has been introduced in just the last couple of weeks, we can be even more confident in the strength of our investments.
This Time is NOT Different!
While the phrase “this time is different” is responsible for tremendous loss of wealth, there’s another four-word Wall Street statement that is the polar opposite.
It’s a theme that has helped investors confidently accumulate wealth for years by putting themselves on the right side of market trends.
“Don’t fight the Fed.”
The idea is that when the Fed is trying to push the economy in one direction or another, investors are wise to go along with the Fed’s plan.
This idea is particularly important for us today, because the Fed has recently embarked on a major shift in policy. And this shift is set to perpetuate growth in the economy and send the U.S. stock market higher.
Last week, Fed Chairman Jerome Powell took the podium in front of an army of reporters and basically told us to expect a cut in the Fed’s target interest rate. In fact, Powell made it clear that the Fed is considering multiple interest rate cuts over the coming months to help the economy continue to expand.
When the Fed cuts interest rates, it can have a very positive effect for individuals and businesses.
Lower interest rates make it easier for people to pay down debt. It also makes it easier to refinance home mortgages, to finance a new car or appliance purchase, and to spend money on credit cards.
I’m not necessarily advocating those decisions. But it stands to reason that as interest rates fall, Americans will spend more money which naturally helps to drive more growth in our economy.
At the same time, lower interest rates help businesses to borrow money for growth opportunities. Low rates make it cheaper to buy inventory, to open new retail locations, to hire more workers and to sell more products and services.
That’s why Wall Street investors have known for years that you don’t want to bet against the market when the Fed is cutting interest rates. And that’s why markets moved to new highs as Powell made it clear that the Fed is now on a path to cut interest rates.
Media skeptics will tell you that “This time is different.”
Don’t listen to them!
Continue to keep a balanced approach to markets, diversifying your wealth into areas including dividend stocks, growth opportunities, precious metals and even bonds.
But don’t let the fear or hyperbole in the news cause you to miss out on some great opportunities to grow your wealth.
Of course, we’ll continue to track the best investment opportunities here at The Daily Edge and keep you posted on the newest trends and developments.
Here’s to growing and protecting your wealth!