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How To Prepare For Volatility

user profile picture Chris Martenson May 06, 2016
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Executive Summary

  • What Fort McMurray is teaching us about situational awareness
  • The wisdom of planning, testing & executing your plans in advance of crisis
  • Preparing in case your entire country starts failing
  • The value of emotional preparedness

If you have not yet read Chaos And Volatility On The Rise, available free to all readers, please click here to read it first.

Okay, so what can any of us do to really prepare ourselves for volatility and the sorts of uncertainty that the world is presenting to us?

Quite a lot actually.

In the case of financial market volatility, the easiest thing to do is to simply not play the game. Keep money in cash and just stay away from the rigged casinos until such a time as attractive valuations return and/or the playing field is leveled.

If you remain in the markets, for heaven’s sake hedge! If you click on the link to the left there, you’ll go to an article written by Adam Taggart that describes the basics of portfolio hedging.

Our recommended financial advisors use very proactive hedging strategies to limit downside volatility and minimize the sorts of punishing losses that can result from bear markets.

I am personally sitting in cash, gold, silver, real estate, a local investment, and a small short position on the S&P 500. That is, I am mainly on the sidelines as I await the inevitable correction that our feckless ‘leaders’ have engineered for us all.

Other people prefer to be more actively invested in the stock and bond markets, which I completely understand. I still would caution those individuals to be ready to exit those positions at a moment’s notice, or to hedge them now.

When the turn comes, it will happen quickly, again courtesy of the hyper fast and interconnected universe of computer trading.

The Importance of Preparing in Advance

In Prosper!, Adam and I advise that while preparing in advance is responsible, scrambling for supplies during a panic is irresponsible, and maybe even constitutes hoarding.

Further, we note that emotional resilience is among the most valuable forms of capital to build.

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Top Comment

This "Long Emergency" makes it difficult to stay on ones toes over long periods of time, so I really appreciate your reminders to "wake up!"
I...
Anonymous Author by pinecarr
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