There is a sentence in my notes that I still remember vividly!

When the economy is extremely prosperous, do not make additional investments, but slowly turn your "assets" into money.

When the economy is extremely depressed, don't just be afraid, but slowly turn your money into "assets".

You don't have to wait until the economy recovers to buy assets, nor do you have to wait until the economy declines to start selling assets. The best approach is to gradually convert assets.

This may be the best coping strategy for every ordinary person in the economic cycle.

In the eyes of most ordinary people in the village, houses are assets. After all, real estate prices have been skyrocketing for more than 20 years. Our A-share stocks cannot be called assets.

Most of the things we have learned about investment are Western, from the United States. U.S. stocks are either at new highs or on the way to new highs, so U.S. stocks are assets.

Looking at history, the main assets that people can invest in are clear: one is "real estate", the other is US stocks, and of course gold and Bitcoin.

It is obvious that we are now in a period of extreme economic depression. We are in the recession stage of the Merrill Lynch clock. Even Baidu can give us the answer, not to mention that we are in it and have deep feelings about it.

With the continued interest rate hikes in the United States, we have not seen the emergence of a recession in the United States. Instead, our real estate market has definitely exploded, but the U.S. stock market is still setting new highs. This is the reality.

Are our properties still considered high-quality assets today? Is it still possible to invest in them?

I think it is still a good asset in the long run. Although house prices have fallen, rents have not dropped much, and none of my tenants have actively asked me to lower the rent.

But in the short term, I will not invest money in real estate anyway.

What does the Fed’s interest rate cut and increased US dollar liquidity mean?

As the world's main reserve currency, the US dollar has long occupied a dominant position in the international financial system. Most countries in the world price and settle commodity transactions such as oil, raw materials, and Bitcoin in US dollars.

Many developing countries have to rely on the US dollar as a tool for foreign exchange reserves and external payments due to unstable currency values ​​or lack of trust in the international market.

In this context, the supply and demand of the US dollar is closely related to global capital flows. When US dollars flow into a country or region, they are often accompanied by a large amount of capital and investment, driving economic prosperity.

After the Federal Reserve cuts interest rates, capital tends to flow faster in search of higher returns. The arrival of a new rate cut cycle will inevitably bring about a huge amount of liquidity, gradually driving up various assets.

Especially US stocks, Bitcoin, gold, etc. which have global investment attributes.

Starting from the Fed’s 50 basis point rate cut this time, although it will not continue to drop from 5.5% to 0% before the 2020 rate hike, it is almost certain that it will continue to drop to around 3%.

This is because the Fed has to cut interest rates based on the current international situation, but it is uncertain after 3%. At that time, the United States will have great policy flexibility. Mr. Bao can choose to cut or increase interest rates according to the situation at that time. The uncertainty of the financial market will also bring investment risks.

The period from 5.5% to 3% is a definite investment opportunity, which will definitely be beneficial to various financial assets. I think it will most likely last until the whole year of 2025, and it is hard to say after that.

Before 2026, the possibility of a major recession in the United States is very small, so this year and next year are the two years with the most certainty for ordinary people like us to invest in financial assets.

Finally, what should ordinary people do now?

As we said before, when the economy is extremely depressed, don’t just be afraid, but slowly turn your money into "assets". In the last few months of 2024, convert your money into assets and wait for it to take off in 2025.

1. Convert your money into Bitcoin and continue to increase your position, regardless of whether the price goes up or down.

2. Convert your money into U.S. stocks and continue to increase your holdings, regardless of whether the stock price goes up or down.

3. Convert your money into gold and continue to increase your holdings regardless of whether the price goes up or down.

over.

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