What are the risks? Stock market collapse, Financial system collapse, societal collapse
how to prepare for each of these collapses
Stock Market Collapse
Retail investors are all too familiar with a crash in the stock markets. When such events occur, trillions of dollars of wealth are evaporated. Retirement plans and other dreams of wealth are shattered. Due to the easy-money, speculative nature of today’s markets, stocks are volatile and can shoot higher and crash lower without a moment’s notice. It is absolutely imperative that you protect yourself from a potential stock market collapse.
Take the following steps to protect yourself from a crash in stocks:
- Don’t put all your money into the stock market
- Pay attention to sentiment – if everyone you know is talking about buying stocks, you should probably be scaling back
- Pay attention to diversification
- Don’t be afraid to secure profits on winning positions – paper profits are meaningless
- Focus on dividend paying stocks
- Avoid penny stocks
Financial System Collapse
With the economic crisis in late 2008, we were told that we were on the brink of total financial collapse. Whether it is true or not doesn’t matter, the key is to prepare and be able to survive should such an event occur.
What if the financial system that we’re used to were broken? What would that look like? Here are some potential possibilities:
- FDIC Insurance is meaningless
- ATM machines aren’t working and you can’t extract money
- Your dollars might become worthless due to inflation
Some easy ways to protect yourself against a potential collapse of the financial system are:
- Do extreme due diligence with regards to your bank. How sound is their balance sheet? If there is any question to the soundness of the bank, pull your money and put it elsewhere
- Keep 3 – 6 months worth of expenses in cash on your property. Make sure it is secure and hidden from thieves
- Consider keeping physical gold to protect you in the event of a currency crisis. Like your cash, make sure it is secure and hidden.
Societal Collapse
If there is a significant societal collapse, most of the above things won’t matter. This will be ultimate survival, but in this case, you can still preserve your wealth through precious metals and basic nessities like food, water, etc. It is likely that your currency will be worthless in such a scenario.
For the best information on preparing for a societal collapse or any potential major collapse, I strongly encourage you to check out the Alpha Strategy. It is the ultimate plan to prepare you financially for any major catastrophe.
