Where to put money in financial market crisis?

[Crypto Crude]

Discussion...
Say next year we have stockmarkets meltdown...where do you put your money?...
Financial market crisis bigger than 2008, housing market crashes, commodities crash, crypto crashes, banks could crash... so where are you putting your money?
cc

[TeslaGod]

Buy tsla before its too late!!

Doomer_1cb919_8417264.jpg

[Swala]

Under the bed!

[Aaron]

Under the bed!

Agreed, if you knew it was all going to crash, cash would be best and you can buy up some bargains at half price when they go on sale.

If you thought that they will destroy the value of a dollar before letting asset prices correct then, it gets tricky. Maybe gold?? just putting it out there.

Getting nervous CC? Seems odd from someone so definite about things. I would have thought crypto currencies were your go to investment. Lots of value there I would have thought.

[FTG]

First things first.

Before making any significant & defensive investment decisions, one would want to have a good understanding on what key factors precipitated the crash in the first place.....

Keeping in mind that how things appear at first glance may not be actuality.

The good news is that, unless it is a true Black Swan event, there will be various signs & indicators that the astute will see. Providing sufficient time for them to position financial affairs accordingly.


Cash MAY be an option (especially if the crash is a rapid deflationary type event), but of course that may not be the situation. However, generally speaking, more 'tangible' assets will prevail over fiat currency during tougher times. Moreover, if the crash is coupled with a loss of confidence in the monetary system (USD for example), then "which" cash/currency you have becomes very important . Especially if a "bail-in" scenario, for which now the legislature & mechanisms are in place, is activated by the Poli's & central banks!

Learning from history, in previous "crashes" ('29, '87, '00, 09 etc), it is clear that life still goes on. It doesn't grind to a total halt. People still need 'to trade in various services & products. In fact some sectors of the economy & some select industries can go on to boom.

An interesting factoid that illustrates the point. In the USA, far more millionaires were created in the 1930's than were in the roaring 20's.

[Aaron]

Maybe cash is not best after considering the Open Bank Resolution. Your money in the bank gets frozen and only released as the bank allows.

https://www.nzherald.co.nz/business/...JKS4DXWYBJEQA/

I suppose a diversified portfolio remains the best answer.

FTG as I am not very astute what would be a couple of main indicators things were going to go South. I appreciate they are not a guarantee of disaster but might indicate disaster.

[SBQ]

Maybe cash is not best after considering the Open Bank Resolution. Your money in the bank gets frozen and only released as the bank allows.

https://www.nzherald.co.nz/business/...JKS4DXWYBJEQA/

I suppose a diversified portfolio remains the best answer.

FTG as I am not very astute what would be a couple of main indicators things were going to go South. I appreciate they are not a guarantee of disaster but might indicate disaster.

I'll have to agree with FTG's view. History is a good basis and throughout the GFC that started in 2008, NZ banks operated unscathed (mostly because of strong Australian backing and our geographical remoteness to the financial markets that conned investment firms abroad.

Banking stress tests is important considering NZ has no depository insurance common in places like Canada and the US. So cash amounts are at risk. The issue of a 'bank run' are scenarios from the old days in developed nations. Nowadays when we see a bank run, we see it happen in poor developing nations where their gov'ts have reek havoc in their economy (ie, hyperinflation). I can assure you NZ is not and will not be in that camp. We are a far more productive nation and our assets are far more diversified.

My neighbour has cold feet about cash he's left in the bank account for the past 6 or 7 years. Coming from a sale of a home he had long ago, at the time, I thought it was a mistake of him selling it. Imagine how much house prices in NZ have come up over the past 7 years? (well over double?). His fear was waking up one day and realise the $ in his bank account is only worth half. He could not say exactly the cause of action ; if it was due to some major economic impact, massive devaluation of the NZ currency?, i'm not sure. But the fact is, he feels owning a bit of dirt with a house on it is a far safer bet.

Let me post this graph: https://static.seekingalpha.com/uplo...ons2-hires.png

Earlier in the year I showed him that chart titled "Human Innovation Always Trumps Fear" and the direction of the squiggly line trends up. However, his wife is not convinced so investments in equities were not their thing.

Oh, we've had a financial market crisis in the 3rd week of March 2020. So in 20 months time are we due for another? I would say a -10% correction would not be out of the norm, but to believe stock prices will go back to March 2020 lows is extremely unlikely.

[Crypto Crude]

First things first.

Before making any significant & defensive investment decisions, one would want to have a good understanding on what key factors precipitated the crash in the first place......

I think Evergrande is the trigger... Chinese construction company with 300 billion of debt (equal to 2% of China gdp) and its not going away... Basically what's happening is house prices are so far out of whack in China, valuations on spreadsheets are too high and not reflecting actual values... I would suspect that many of the large Chinese companies will be in the same boat... these debts are held by local banks and businesses which could in turn go under starting a house of cards... production of goods and services that we buy from China will halt
.. aswell as already supply issues mainly transport...aswell as covid related contagion... debt levels worldwide are far too high and very close to never being able to pay back... the US is so close to max debt ceiling beyond belief...'real' inflation is very high and there's a huge movement in America against working mainly because standard wages don't even cover basic standard of living (look at antiwork group on reddit) phenomenal discussion and movement against working !!
People losing jobs because of forced vaccinations will have them selling assets to get through aswell and many other covid related factors I won't get into... also covid related business (just like earthquake repair, natural disaster repair etc) does not add real GDP its like a fake growth...
I'm sure that it's all coming down next year... the Global financial crisis of 2008 was very similar in nature... 4th quarter of 2007 we got some corrections and triggers as it unwound in 2008...
I think this crash could be twice as big as GFC crash...
This is the great reset remember...

cc

[Snoopy]

Discussion...
Say next year we have stockmarkets meltdown...where do you put your money?...
Financial market crisis bigger than 2008, housing market crashes, commodities crash, crypto crashes, banks could crash... so where are you putting your money?
cc

I will be investing in companies that produce stuff that everyone needs, financial crisis or no financial crisis: food, power , NOT shelter as I think house prices are too high, and telecommunications. Companies in these sectors were all quite expensive a year or so ago, but the prices have come off a bit.

Still not keen on the retirement sector, as I think most of the local forum heroes who have done well at this have realised that, despite their essential nature, these retirement village companies are really just extended property plays in earnings growth terms. Having this attitude over the years has cost me a few fortunes I otherwise might have had. But whatever doesn't keep you awake at night is probably as good a measuring stick as any as to where you should put your money in troubled times.

Of all my investments right now, I am feeling probably the most nervous about my share investments in banks and finance companies. Don't get me wrong, I am not expecting any NZ/Oz based banks to fail. But I have had it said to me more than once that banks are a good place to have your money when interest rates rise, as interest rate margins lift (there is a bit of 'being fearful when others are greedy' for me in here too) . I have always been more concerned with 'net profit margins', of which 'net interest margins' are only one ingredient. And there seem to be an awful lot of niche 'fintech' players nibbling away at what used to be profitable niche markets for our (or at least the Ozzie's) 'big banks'.

SNOOPY

[Crypto Crude]

Snoopy,
To be investing in companies (listed companies I presume) through a very likely financial market meltdown is a cabbage patch kid move... in bear markets no companies are spared no matter what they do or how important they are.... small companies, big companies they all get smoked....
You need a huge reality check....
Buying companies and hedging with a short sell now that's smarter...
Next year from mid year on will not be a time to scalp profits... it will be a time to maintain as much wealth as possible and really pump it back on after the crash.....

I'm considering where to store money... I'm thinking perhaps just a cheap house which won't lose much money in a bear market and spread some money around and wait for the bear market... its coming...
100%... and this will be a real nasty one... of a generation
cc