We understand that quitting stocks, bonds, and investment real estate is not easy. It’s tough to just give up on investments that we have come to know and love, investments that have provided so well for us in the past—so supportive and so comfortable. It’s almost like giving up on Mom and Dad. These investments have served us so well over the past few decades; how can we just walk away? Everybody invested in stocks, bonds, and real estate, and usually everybody did very well. The world just doesn’t seem right without them. And if leaving Mom and Dad isn’t bad enough, moving to alternative investments may feel like moving to an orphanage. Actually, you can make much more money with alternative investments (see Chapter 7) than you could with stocks, bonds, and real estate in the past, but that will be much harder to do than in the relatively easy glory days of the rising real estate and stock markets. Also, few investors will join you in the alien world of investments that go up when the economy goes down. It just won’t feel the same as the rising bubble economy.
In most economic situations, reading what not to invest in is pretty useless because you probably wouldn’t invest in it anyway. You would invest in typical stock mutual funds and some basic real estate just like everyone else. However, in a bubble economy, what not to invest in can be one of the most important financial decisions you make in your lifetime. That’s because the losses on stock, bonds, and real estate can be so large. At this point, especially with the dollar bubble yet to pop, you have to be very careful about what investments you hold.
There was a great line in the old television show M*A*S*H that essentially said, “In war, there are two rules. Rule #1 is that young men die. Rule #2 is that doctors can’t change Rule #1.” The same logic can be applied to this falling multibubble economy:
Rule #1: No matter what happens, all bubbles eventually pop.
Rule #2: No amount of optimism can change Rule #1.
Being optimistic about your stock, bonds, and real estate investments will not change their future value. We have to deal with the reality we have, not the reality we want.
If you are still not convinced that we are in the middle of a bursting multibubble economy, please re-read the first half of the book. On the other hand, if your head says, “This book makes sense” but your heart says, “I want my bubble back!” then take a few deep breaths or have a few stiff drinks or take a nap but, whatever it takes, get over it and get on with your new life in the new economy. Don’t spend too much time wishing for the good times to magically return. They won’t. It’s time to wake up and change your thinking. You still have time to protect yourself. In a few years, you are either going to look like a genius or you are going to be kicking yourself for waiting until it is too late. It’s really up to you.