What does it take to be an investor in the new normal of a post-pandemic world? Whether you’re a new investor or a seasoned one, there lies both risks and opportunities.
The World is Changing
Or, perhaps it may be more apt to say the world has already changed. And, it will continue to change.
“Change is the only constant in life.” ~Heraclitus, Greek philosopher
The level of debt in the world has hit an all time high at $253 trillion in debt. Interest rates are increasingly lower with cuts and negative rates being increasingly common. A global pandemic has changed how people work and travel. Oil futures prices went negative for the first time in history. The income gap between M40 and T20 is increasing. And there’s increasing tensions between US the dominant global superpower and China as the next emerging global superpower.
An increasingly debt-fueled environment between almost all countries is leading to a situation where countries are all virtually in debt and increasingly dependent on printing more money. This threatens to spiral out of control when central banks lose the ability to print money in low/negative rate environments risking continued devaluation of their currency, defaults and debt crisis. Covid-19 was the trigger (or, some may say, the excuse) for a global economic and market downturn. There was a rush to hold liquid US Dollar (USD), the world’s #1 reserve currency. Every other asset class from equities to bonds to alternate asset classes saw a sell off. March 2020 recorded the largest one day crash in the US Dow market, exacerbated by algorithmic trading, and over dependence on the USD.
It is important to know what has happened and what is happening as it gives us a picture of what is to come.
Shifting from the macro to a personal level, one’s investment journey always starts in knowing yourself. Investing is still a personal journey requiring your investments, goals, and