No such thing as house money?
Okay, so all winnings are your money no matter what - right?
I disagree. Unfortunately, while investing is NOT gambling, there are many similarities - risk/reward ratios, winnings, losings, opportunity, etc.
The difference being that the game in Vegas is weighted against you, while investing, by and large, is not.
Still, there is house money. I hate to break it to you. Most people, in fact everyone, understands that concept. The only ones who don't are the incredibly wealthy who have played house money from the day they were born and never really expect it to disappear or run out.
So, that concept is real and practical from ANYONE's standpoint.
If things really do go as badly as you predict, all holdings will be essentially worthless. Not just Worth Less. How much can you lose when your banks go bust? When deflation causes gold to tank? Just because they go from a value of 100 to 2 doesn't mean they are Worth Less. They are worthless. Because you'll have a hard time finding buyers even at deflated prices.
Mortgage loans are at historic peaks, but that is a gauge of little. Home ownership is at a peak, too. One can't be a "bad" without the other being a "good". That's a balancing act that generally favors the owner. Admittedly that market can turn bad for the owner, but it is rare, usually brief, and typically picks up nicely afterward.
The market is the ultimate arbiter - and the market abhors predictions.
That is why I don't like predictions. People make themselves wealthy off predictions in 2 ways: getting people to pay for information, or creating psychological situations that financially benefit the predictor by creating a mania or panic....or some other fluctuation.
Look at any WS analyst today. For years I have abhored them. They basically tell people what to do AFTER they should have done it. Yet they are all millionaires. How many of their clients are (who didn't start out as millionaires?).
Good luck. You've got your sights set. I've got mine. |
