What has grown in recent years are stock markets around the world, led by the U.S. stock market since 2009. But what’s wrong with this picture? How can the consumer be so weak and tapped-out, when jobs and the stock market seem so strong? The answer is financial engineering, which may now have run its course.
The intervention of Central Banks has kept economies afloat with low-interest rates and increased money supply, but this has failed to resurrect consumer spending in meaningful and sustainable ways manifested from organic demand and productivity growth. This financial manipulation may have bought time and hope, but it has not changed the fundamental picture. This is why it’s more important now than at any other time in your life to take control of your financial future.
Learning to trade puts you in control because you are not dependent on the economy or government to provide you with growth and prosperity. As a trader, you can play any side of the market and benefit whether it’s going up or down — and you manage risk with every dollar you put to work for you. There is no downside protection in the stock market, or in your 401k, 403b, IRA or other long-term retirement accounts. Your financial future will depend on your ability to manage risk and your ability to trade — not what investments might do for you.
Money has to find a home somewhere, and the smart money is not leaving their cash exposed. At some point in time — maybe sooner rather than later — the punch bowl will be empty, and the stock market party will be over.