Doing Nothing Might Be a Good Strategy

Many investors have been burned by the recent market fall. As a result, some people have sworn off stocks all together and have moved all their money to CD’s. Some want “revenge” and are attempting to earn all their money back in short time. However, with current market forces pushing in all directions, and with various governments trying to sway their economies and currencies, it may make sense to make “do nothing” your investment mantra for the time being.

A couple of possible alternatives (for example) could be… to try “trading” or options strategies – two ideas that might work but are often above the skill level of the average investor. I know earning 0.5% in the bank or 2.5% in a CD sounds really depressing but I’m sure many of you would have traded that with your 2008 performance!

So, does doing “nothing” really mean nothing? What do you look for? Yes, nothing means nothing and as far as what to look for, I’m not sure yet. I have been studying trends daily, and trying to  understand how things  will interrelate. I have pondered the effects of massive government intervention, irresponsible monetary policy, and semi-nationalization of some industries.

All I know is, I fear what these people will do. Seriously, do you honestly think that Senators Schumer,  et al know how to “run” an economy? Who can run an economy?  The Answer: No one can. And unless you’re a complete fool, YOU tend to make the best economic decisions for yourself – it will always be the case and hence you  can be certain, if you allow someone else (say for example politicians) to “plan” the economy, they will mess things up.

Therefore, it may be best to focus away from trying to be an investment “genius” this year and focus on planning issues – increase SAVINGS, find more tax deductions, cut silly spending, make sure you’re properly insured, and have good legal planning. And lastly, pay down some debt while rates are still low.

These are examples (not an exhaustive list) of ways that you can boost your net worth and/or overall financial position no matter how well/poorly the market performs.

Chris Grande

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