Investing for a Worst Case Scenario
The past two years have seen endless bailouts and rescue attempts initiated by the government toward those who are financially inept, clueless, or reckless (e.g., Wall Street). (OK, in some cases – a minority – the bailees have just been unlucky.) Some folks think that these massive government interventions will lead to a more calamitous economic conditions in the coming years.
That is the subject of the second installment of Farrell’s survival series. Keep in mind that part of Farrell’s image of the future includes the risk of devastation caused by the nuclearization of rogue states like Iran and North Korea.
Farrell asks us first to accept the realities of human failure that will produce economic disaster. He then urges us to adopt a two-prong strategy. First, we are to use some of our existing resources to prepare to isolate ourselves from disaster (e.g., outside a nuclear blast zone) and to stockpile food and other emergency supplies for the long term.
Second, we should stay active in the market but looking for opportunities that exploit the same “ethics” (greed being one) that guides Wall Street. In other words, accept what is real, let go of the anger, and do what is necessary for you and your family.
Here is a link to Farrell’s article. Mr. ToughMoneyLove would be interested in hearing your reactions.