So I want to ask you a question. Is the world broke? Is the world going bankrupt? I ask you this because the media keeps on talking about this. I also continue to hear people inclusive of other financial advisers at different functions I attend tell me with conviction that the world is broke.
Well most recently by friend and co-author of my book Dirty Filthy Lies my Broker Taught Me, Mark Matson as well as my favorite Economist Brian Wesbury who both have recently been all over Fox Business and CNBC with some great facts I think u should all know. They have both done some excellent research on this that I want to share.
In the last 100 years there have been 73 defaults. This includes Australia, Bulgaria, Hungary, Greece, and Germany.
In the last 200 years there has been over 250 defaults. As a matter of fact in the last 200 years Greece has defaulted more times than they have been current with their debt.
Let’s look at the United States:
Now mind you we all know that government is growing like crazy and deficits are huge (unbelievably huge). But this does not guarantee collapse. However, assets in the US amount to over $150 Trillion in assets and more than $ 15 Trillion in annual output based on GDP. A company that size can definitely afford to carry our current debt level.
Don’t get us wrong. We think government is too big and too intrusive and it will harm the economy over time. But, it will not kill the economy today, or even next year. Productivity is booming. New technology is lifting wealth, and living standards are rising – despite government growth.
So let’s keep some things in perspective. I understand and know that there is a lot of confusion in this information overloaded world we live in and this confusion always brings fear, hysteria, and panic. But like many of the issues we see today, history repeats itself and this has all happened before.
Like I have taught my clients before, being and becoming a successful investor is not as difficult as the financial industry leads you to believe. Being a successful investor is all about behavior. Go back to your fundamental basics and truths which we have taught you. Still to this day, owning equities in your portfolio in the long run is the greatest wealth creation tool known to mankind. Why, well because of the basics of free markets and innovation. Entrepreneurs and people who own and work for those company’s are going to continue to find a way to adapt, innovate, and succeed in order to be able to take care of their family’s. We know that this is always going to be the case no matter what economy we are in.
So what do you need to be doing in order to be a successful investor today?
1.Well the first thing is not to be the common investor or listen to the common financial planner who panics and sells in order to buy annuities or insurance. When you sell during a correction like we have seen is that you are selling low.
2.You need to remain invested in a prudent low cost globally allocated portfolio and use these periods of volatility to re balance the portfolio and sell out of those positions that have had an increase in value and buy into those positions which have decreased in value. This is the fundamental rule of investing which is Buy low sell high.
3.In addition in my recent video which I have linked below titled Volatility is Awesome & Necessary, there are some possible financial planning areas you might want to take advantage of.
So remember, let’s continue to stay focused. Build Wealth, Ignore Wall Street and get on with your life.
If you are looking for a brief, plain-English introdution to investing, don’t forget to BUY my book, Dirty Filthy Lies My Broker Taught Me & 101 Truths to Money and Investing. Order my book now and I will also send you my Investor Awareness Guide and listen to our The Seven Deadly Investor Traps that Destroy Your Wealth and the Three Power Strategies to Fix Your Portfolio Fast! These materials will equip you with the information you need to begin putting your investment experience back on track.