11-21-2018, 03:49 PM
In my mind market risks appear very high now and in recent years due to US and international macro economic risks.
Some of these include trade wars, Chinese debt and banking instability, Turkey currency and economic uncertainty, questionable long term European market growth prospects, Russian and Chinese cyber aggression, US DOJ dysfunction and bias, US political push into socialist policies, questionable US fiscal policies (tax cuts without spending cuts), the new US military Space Corps branch and additional unconstrained spending activities - I worry about these kinds of things. Many of these macro level risks appear to hold potential catastrophic consequences. And for a melancholy kind of a guy like me, well, the "don't worry be happy" mantra doesn't really fly.
Two risk mitigation strategies I use include (1) diversification (defined by a minimum of 123 stock in a portfolio), and (2) covariant markets (investing in markets which generally go up over time but behave differently from other asset classes (e.g. SP500 index, US REIT index, and European index). And I prefer to buy ETFs to participate in these markets. So I have some knowledge of how to mitigate financial market risks. But how does one guard against world wide systemic risks? Much of which enter US financial markets by way of loony tune governments and economies and threats outside of our control.
(And thanks in advance to charter captain's ever solid advice to sit on my boat and drink a beer - that DOES help!)
Some of these include trade wars, Chinese debt and banking instability, Turkey currency and economic uncertainty, questionable long term European market growth prospects, Russian and Chinese cyber aggression, US DOJ dysfunction and bias, US political push into socialist policies, questionable US fiscal policies (tax cuts without spending cuts), the new US military Space Corps branch and additional unconstrained spending activities - I worry about these kinds of things. Many of these macro level risks appear to hold potential catastrophic consequences. And for a melancholy kind of a guy like me, well, the "don't worry be happy" mantra doesn't really fly.
Two risk mitigation strategies I use include (1) diversification (defined by a minimum of 123 stock in a portfolio), and (2) covariant markets (investing in markets which generally go up over time but behave differently from other asset classes (e.g. SP500 index, US REIT index, and European index). And I prefer to buy ETFs to participate in these markets. So I have some knowledge of how to mitigate financial market risks. But how does one guard against world wide systemic risks? Much of which enter US financial markets by way of loony tune governments and economies and threats outside of our control.
(And thanks in advance to charter captain's ever solid advice to sit on my boat and drink a beer - that DOES help!)