Remember when interest rates were zero? When stocks were booming? Now with tiny interest rate increases, the NASDAQ is down a third, bitcoin is in ruins, and cryptocurrency accounts are in lockdown. What gives? In a word: Speculation.
When the risk-free rate of return is nothing for years and years, and then investors stick their necks out with retirement money into areas where they don’t belong, it’s dangerous.
This isn’t to say there won’t be a rebound. In my observation, when investors start losing more than, say, 15%, the sell orders start flying. They can’t handle the losses, and in many cases, they head for the hills. They sell until they can sleep. Instead of riding that roller coaster, focus on being paid to be an investor, not a speculator living and dying on prices.
Action Line: Focus on dividends, and interest like you do for rents from your income property. Slow and steady wins the race. It’s just that most investors can’t handle making money slowly. If you want to try a different approach, get in touch with me.
