Recession Proof Portfolio (Bulletproof Investing Strategies)

invest wisely and grow your money no matter what happens to the economy I'm gonna show you two ways to do that in this video hey everyone I'm rose and welcome back to my channel the number one place for financial education empowerment and inspiration today we're gonna talk about recession proof investing I know it can be scary to get started investing given all of these financial news headlines predicting doom and gloom and that's why I wanted to make this video so I can educate you a little bit about how you should approach your own investing ahead of a market crash yes there are some indicators that point to how some aspects of the economy are shaky right now and how it looks similar to the economy before the 2000 komm crash and the 2008 financial crisis and I do talk about all that in this video right here however the problem is that when you avoid investing completely because you're afraid of experiencing a downturn then you also miss out on a lot of returns in fact if you have listened to all the doom and gloom headlines that you see in the news then you would have missed out big time I mean just check out all these articles people were predicting catastrophic stock market crashes ever since 2013 they were predicting it in 2014 2016 2018 I mean every year there's literally someone who is predicting a stock market crash and you know what meanwhile the S&P 500 between 2013 and now has almost doubled can you imagine how much it would suck to have sat in cash all those years just because you've read something in the news that's why not investing at all because you're expecting a recession sometime soon isn't a good idea either yes we need to be mindful of cycles and whatnot but in general it's always better to be invested than to not be invested cash is the absolute worst place to be in long term it doesn't grow and only loses purchasing power from inflation over time and that's a guarantee that being said it's important to have a good investing strategy now any sort of market timing investing strategy is a really dicey way to invest because as you saw with all those r2 it's really hard to call the exact timing of a recession sure if you can do it well all the time then yeah you'll get rich really fast in which case I want to be your friend and you should totally share your money with me but the average person can't time the market get lucky once or twice short but investing by trying to predict where the economy is headed is not a reliable strategy and look I'm speaking from personal experience back in 2015 I started reading a bunch of articles about a coming US economic collapse and how the US dollar was gonna lose all of its value and all this crazy stuff and so I moved a lot of my money out of stocks and bought a bunch of gold and about a year or two later I essentially broke even on that gold investment and I actually missed out on a lot of stock market growth so all in all that was a really humbling experience for me because I pride myself on being pretty smart and well-informed but I was totally wrong about what I thought was gonna do well I speak from personal experience it's really hard to time the market no matter how convinced you are that you're gonna be right it's just impossible to know because the markets are so large and dynamic that's why I'm convinced that these two strategies that I'm gonna share with you in this video are the best way to go both of these strategies rather than relying on market timing in other words predicting correctly when the recession is going to happen instead these two strategies rely on timeless investing principles timeless principles that are gonna make you money in all markets regardless of a recession or no recession so the first strategy that I want to talk to you about is Ray Dalio all-weather portfolio Ray Dalio is a master investor he's the founder of Bridgewater associates and he is regarded by many to be one of the best investors in the world in an interview he did with Tony Robbins in the book Ronnie master the game Ray Dalio explains that the best way to invest is by creating a balanced portfolio that is designed to succeed in any economic environment even during recessions his reasoning is that there's only four things that move the price of assets there is inflation and then the opposite of inflation deflation there's economic growth and then the opposite of that which is declining economic growth and depending on what economic season were in there will be an asset class that is performing better than all the others for example stocks they do well during times of rising economic growth and moderate inflation bonds they do well during times of declining economic growth and deflation and gold does well during times of hyperinflation or really out of control inflation kind of like I was explaining with my own personal story if I had been right and gold was the asset class to be in you know I would have done really well but the problem is it's actually hard to know when these economic seasons will hit or even if they'll hit and when they do how long they're gonna last so right now we're in a season of strong rising economic growth and moderate inflation so stocks are doing really well and if you're all in stocks right now you're probably doing really well however we don't know how long the season is gonna last it could be two more months or even two more years and then when that season ends we don't know what season is gonna be next and therefore we don't know which asset class to be invested in so going back to the all-weather portfolio this portfolio is designed to have the ideal ratio of gold commodities stocks and bonds so that it's gonna make money regardless of which economic season were in the all-weather portfolio has earned an average of nine point seven two percent in the 30 year period between 1984 and 2013 and what's crazy about the all other portfolio is that it only had four down years in all of those thirty years its worst year was in 2008 and it lost 3.9 3 percent however we all know what happened in 2008 the S&P 500 actually lost 37 percent a loss of 3.9 3 percent for the all-weather portfolio is peanuts compared to what most people experienced during that crisis so I would say the all-weather portfolio is pretty bulletproof and as recession-proof as it gets now here's how to create your own all-weather portfolio the proportions that Ray Dalio recommends of each asset class is the following 30% in stocks 40% in long-term Treasury bonds 15% in intermediate term Treasury bonds seven and a half percent in gold and seven and a half percent in commodities now the way you can do this for yourself is either invest in a combination of ETFs or mutual funds according to these percentages so for the stock portion you can invest in for example vanguards total stock market ETF BTI or if you prefer mutual funds which is my personal preference you could do vanguards total stock market mutual fund 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