A Once in A Lifetime Opportunity To Build Wealth is Coming | Jaspreet Singh

How do you prepare for a market crash?

*Have cash prepared. Buy in and ride the market.

When 2008 crash happened, there was a lot of real estate millionaires.

ex) there were condos that were 95% off, like 1000sq feet for $8000 cash which used to be $120,000

 

There were many different distressed deals because there were so many over-leveraged owners.

 

Market crashes are part of economic cycles. (ups and downs) Which happens in all asset classes.

2008 was an exception like a cliff.

 

Some most common mistakes are:

1. People assume no crash is going to ever happen. When people get greedy.

- Media amplifies all the success story to bump certain asset class to abnormal level, which becomes a bubble.

(It creates FOMO. There is no shortcut to get rich. You gotta put in the work.)

- When market starts to come down, media amplifies the fear and everyone starts selling.

- There are baseline of what the asset class price should be, but the prices go above or below because of dept and emotion.

- The people that think there is no crash are the people that sell at the bottom.

 

2. People wait and try to time the market.

- Nobody knows when the bubble is going to pop or how big it's going to be.

- You should always have some cash.

- It's especially harder to predict now because of outside factors.

ex) 2020 recession only lasted 2 months because of unlimited quantantative easing by the FEDS printing money.

 

Can the government keep pumping in money so that nothing crashes?

In 2008, banks gave 100% loans to people who didn't have income, assets.

No equity in your home when the home price goes down then the home becomes money pit.

The bubble was 100x bigger, starting from housing, then to financial sector messing up by creating new products like insuarnace to bad investments. They all failed.

Government bailed out big banks using tax money but they were not enought and started printing money (trillions of dollors). This creates inflation and who pays the price? Average person who buys grocery for 25% more than before. 

But they can't keep printing money because that will cause dollar to lose value. If it loses value, people will realize money is fake and ask for more. 

 

Educate yourself about assets, cycles.

Asking someone for what stock should I buy is the worst question because everyone's risk tolerance or goals are different. Stategies are different for each person.

 

What do I do if you think a crash is coming?

If you leave your savings as cash, inflation eats them away. But at the same time, it's hard to choose which asset to invest in. Keep analyzing. Know what you have to do with your moeny today and tomorrow.

Passive strat: Automatic deposit into ETF with trust in American economy, buy real gold. All the time, whether the market is up or down.

Active strat: Invest into real estate, start-ups, stocks. Become real picky, don't base on speculation.

 

Don't chase the hype, buy the value

 

Is the market going to crash

Economy is not growing fast enough. More and more people realize dollar is losing value. If other countries that are holding onto dollar reserves start dumping dollars, it's going to become global economic crisis.

National debt is higher than GDP.