Are You a HODLer?

By SJ Spence

During the 2008 Great Financial Crisis (GFC) I remember seeing my house value plummet as well as my 401K value almost cut in half. As we all talked about our losses I recall saying “You don’t lose if you don’t sell”. Well, that was over 13 years ago, and I have a bit more experience and understanding of our economy and what to expect. I am pretty sure that the statement I made back then was more of a statement that would surely comfort me as it took nearly 10 years for the values to return to pre-GFC values. I, as most others, did not see this destruction of wealth coming then nor did I know what to do when we were all going through it.

The ‘me’ today can see the wealth destruction that is ahead of all of us once again and not only am I taking action for myself and my family, I am also screaming to the top of my lungs to everyone else about the warning signs we need to pay attention to as well. Ignore the warnings at your own peril. The cracks are beginning to show now and the most obvious impact Americans feel is the effects of inflation as measured by the CPI (Consumer Price Index) that is 8.3% in April, 2022. See article here: https://cnb.cx/38dKQod Another may be that fuel for cars has doubled. For parents with babies, it may seem odd that baby formula is becoming unobtainable…not just expensive, but very scarce! See article here: https://www.axios.com/2022/05/06/baby-formula-shortage-abbott-recall And now, you may begin to notice the downturn of the stock markets, and crypto currencies. So, what do you do?

That is where HODLing comes in. Now let’s be clear, I’m not providing financial advice other than that everyone is at risk and should have a good and clear understanding of what is happening with your money, er, I mean currency and assets that you may have through simple education. Fair? Now back to HODL; this means Hold On for Dear Life. Wait, what? This is an investment strategy? Look it up for yourself if you don’t believe me. This is what most people do in the crypto currency market when it drops like a rock. Oh, by the way, Bit Coin is down 57% from its all-time high in November 2021. And now the Dow Jones Industrial Average has lost all gains since March 2021. How about the FAANG stocks? Are they performing well? If you don’t know these are the top five best performing companies in the USA. This is where a lot of retail investors put their money. Let’s see in 2022; F= FaceBook, down over 46%, A=Apple, down over 19%, A=Amazon, down over 38%, N=Netflix, down over 73% and G=Google, down over 23%.

For many, investing is a very emotional act. It is very easy when everything goes up, but it is very hard when it goes down. Right now, it seems that if anyone vested in stocks, bonds and crypto is like trying to ‘catch a falling knife’ and should be very careful on their next move. And yes, if you have a 401K, you are most likely in this as well. It is well known that most retail investors experience FOMO (Fear Of Missing Out) and will normally buy high and sell low.

Do you HODL? Do you sell? If you don’t know, that is why you must have an idea of what to expect next. I try to start you off understanding the basics of the game with my book Money Plain and Simple; What the Institutions and the Elite Don’t Want You to Know. From the book, you will awaken to the fact that the money game is rigged against you but you can work this to your advantage. From there, you should have a better sense of whether to HODL or to not to HODL.

Final thought to this, recall what leveraging is and what a margin call is (both are in the book). If the market does start a more aggressive downturn, these two terms will be the talk of the town.

Let me know what you think about this or anything else you would like to read about.

sjspence@moneyplainandsimple.com

The book is now available in English (audiobook too) and Spanish. For more information check out www.moneyplainandsimplebook.com .

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