(An article from our January 2015 newsletter)
Our true hope lies in our Lord and Savior, Jesus Christ.
The market has been volatile. I believe we will continue to see volatile swings. Don't get complacent when we have a good week and things are up - it is likely to be down almost as much soon after. I think this will be the order of business at least for now.
As I have been saying, much could be done to put this economy on some sort of permanent footing. You have all heard my analogy that we desperately need to run this car into the ditch before it goes over the cliff. However, there obviously is no will in Washington to do this. I suspect they will not get the car under control until it has plummeted off the cliff.
One vital step Washington could take is to cut spending. Sadly, we can almost rule that possibility out. We probably should not even list it as an option because there is no will or possibly anyone even seeing the need to do so.
Our volatile economy is a global issue. Right now oil has little to do with the volatility in the markets. We live in a world of skeptics right now. Since 2008, no one has believed anything the government has said. They certainly do not believe anything the markets say since they have been all over the place. We continue to see indicators get worse, not better. We are now starting to see corporation earnings a bit lower than expected. Copper prices have slumped to 2009 levels, sparking more global concerns about growth. I suspect we will continue to see turbulent sessions in all markets for some time.
I Say It Again - Wait
Surprisingly, people continue asking me about how to get into the market. Let me say this once again. If you look at my buy list (if you partner with me on the website), it is as small as it has been since late 2008. I would suggest that this is not a time to buy - even good cheap stocks. If they are going to stay cheap for an extended period, then let's wait and see. Let's watch for some good uptick momentum that provides legitimate reasons for those upticks before we even think about buying. Even if you are young, this is what I suggest: Do not get out of any of the positions you are in, but don't put any new money to work in this economy.
Consider These Two Things
I desperately urge you to consider two things as we get deeper into 2015. First is savings. Your family's major focus should be on savings. Savings is not investing. Savings is liquid. Savings is in a bank or in a safe, or maybe at home in a cookie jar. But you must have significant savings.
Second, you need to get out of debt and stay out of debt. Do this as quickly as you can.
Building savings and becoming debt free will help you survive the ongoing volatility - and even worse things that may come. I've said for many years that these steps are important as well:
I am not talking about prepping for five years. I am talking about having enough to keep yourselves out of the chaos that could ensue from an extreme economic event.
Prepare for Economic Armageddon
What if we experience more than an event? What if we experience a complete economic meltdown around the globe? An economic Armageddon. How do we prepare financially for that?
We can't, so let's not even try.
In that case, your finances - savings and everything else - will be devastated.
Global Catastrophe We can't prepare financially for an economic Armageddon, but we can prepare in more important ways. Mentally. Emotionally. Spiritually.
We need to be in a survival mode for our families. We need to accept what God brings and remember that he, not our finances, is our source. In an economic catastrophe, everyone will face the loss of money and possessions. As Christians, we will need to be the stable force in society. To put our faith in God . . . and help others do the same.
I know this all sounds incredibly doomsday-like, but I am concerned about this year and how it will end. Oh, I may add some things to my buy list. I may continue to talk about the markets and where they are headed . . . and you certainly need to continue to listen. I will do my best to be a watchman and a warning sound as long as the Lord allows me to do so. But . . . we must place our trust in the Lord and not in our savings and investments. IF we have an Economic Armageddon, it will not last six months or twelve months or two years. It will be global in nature and will last many, many years.
Our True Hope Jesus Christ I am part of a team working feverishly on a defense strategy during this time. Maybe this will give us a little bit of hope. We all need to save money, get out of debt, and do what we can to see us through the economic volatility. But never forget - our true hope lies in our Lord and Savior Jesus Christ. The treasures we need to protect and guard are the treasures we are storing in heaven. We can place our hope and find peace in that, and only in that.
"Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; 20 but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also. (Words of Jesus in Matthew 6:19-21 NKJV)