There is no more time to sugar coat things, World War 3 is here. And it did not start with spy balloons. Large global powers with very different ideologies and ways to govern will clash at various tension points for the foreseeable future.
The question for savvy investors: Are they preparing for what is coming next?
Perhaps it is the Gen X in me. My whole life has seen one crazy world event after another. The fall of the Berlin Wall, the end to the first Cold War. The dotcom bust, Cold War, 9/11, Great Recession, Iraq War, Afghan War, Pandemic, etc. What is next?
Raging 20’s
The Money Vikings continue to strategically manage assets and investments during what we call the “Raging 20’s”. You remember flapper girls and the guided age of the roaring 20’s, well this 2020’s is a whole new world.
World War 3 is Here
Unfortunately there are some awful governments in the world run by dictators that are literally rotting from the cancer within. The masses of people in these countries are powerless and just trying to get by. The increasingly neurotic leaders will do anything to cling to power and expand their influence. This brings an ever increasing instability to the global world order and trade.
The good news for the US, Canada and Mexico
The American hemisphere can pretty much sustain itself and enjoys a peaceful alliance among all nations. Sure, there are little squabbles here and there, but all normal stuff. For the most part, the American hemisphere can sustain itself. Unfortunately western Europe has proven to be way to dependent on cheap oil from corrupt nations. Here’s hoping for no World War 3
The Bad News
The bad news is less stability in the world, increases expenditures on military activities, less free trade, less cheap goods, loss of life and assets in other parts of the world. And for investors, volatility is the new normal.
Synopsis of investing strategies
Here are the major muscle movements a person can use to invest and thrive during these unpredictable times.
Mighty Dollar
Say what we want about Bitcoin and other cryptos, the fact of the matter is that the dollar is here to stay.
Real Estate
I still believe in the power of US real estate as a long term asset class. BUT, the real estate needs to be acquired in strategic locations that are more resilient to climate disruptions (or world war 3) and where people are moving to. I still think high quality REITs are the way to go for maximum exposure, risk management and diversification.
Quality US and European Stocks (Some Defense Plays)
I am sticking to the Warren Buffett game plan and never betting against the US. US companies will continue to dominate for many decades to come. Most of the worlds greatest companies came from the US and will continue to do so. I do seek exposure to emerging markets, but I am going to chose these even more carefully going forward with an eye on geopolitical risks.
AI and Tech
AI and Tech are other fields that I believe will continue to flourish and dominate in the years to come. Humans want progress and they love technology and knowledge. None of this can be stopped.In terms of AI and Tech, this may also be a time to invest in defense industry tech that will be used to push back on rogue states and actions should it come to world war 3, or just war. Raytheon has been a favorite dividend player for quite some time.
Quality Bonds
The raging 20’s all about risk management and diversification of assets. We will win some and lose some. But volatility can historically be smoothed out using quality bond allocations.
More Cash
It is never a bad idea to have some percentage of assets in cold hard cash. Now with inflation running so hot, and fears of world war 3 this became tricky because money sitting in low interest rate cash accounts loses purchasing power quickly. But, inflation should hopefully continue to smooth into next year and having cash has many advantages. For one, cash gives you opportunity. It is opportunity in an unmanifesred potential to jump on market dips and pick up assets on sale.
Reduce Costs and Debt
I think we need to get used to living more simply over the next decade. And in many ways I believe this will be good for our health, our communities and our future. There may be significant supply chain disruptions as large countries jockey for position. But we should ask ourselves, did we really need all the throw away stuff to begin with?
How Are You Preparing for World War 3?
Please share other ways we can prepare for geo political turbulence over the next 10 years. It has already arrived and the time is now to make yourself strong and prepared.