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“The Backwards World We Live In…”
Written by Steve | Published: |
Earlier this week I was in my weekly investor mastermind and one of the other participants said something that caught my attention…
He said, “yes, in this backwards world we live in, that is exactly what I meant.”
That phrase “backwards world we live in” continues to ring in my ears all week long.
What this gentleman was talking about was the changes in the Unemployment rate.
Historically, once the unemployment rate gets to a low point, something breaks and then a recession is in full swing. It is a major market indicator on where our economy is.
Look at the low points of Unemployment on this chart below. Right before 2000, then before 2008, then right before the pandemic, and now look at where we are now.
This seems counterintuitive, doesn’t it. You would think having low unemployment, meaning more people have jobs, would be good for investments, however history has shown us that it’s totally the opposite.
Many people that I talk with believe that whenever the market starts to drop they will just sell to preserve their capital.
However, if you are feeling good thinking the market is in great shape because everyone has jobs, are you really going to sell to preserve your money.
There is a reason that they say “investors can’t catch a falling knife” because usually the market doesn’t fall in a straight line, so they can’t even time it.
My overall point is if you have all your money in ‘at-risk’ investments, meaning that their values can change due to market pressures, you are going to have a tough time creating financial peace. When the majority of your investments are speculative you are gonna have to check all your investment positions while you are on that cruise or on the beach etc.
Especially when, “the backwards world we live in” is making you feel like everything is going well but really it’s an indicator that the opposite is true.