The Prosperity Blog

12 Ways to Prepare a Portfolio for a Bear Market

“Rule No. 1: Don’t lose money. Rule No. 2: Don’t forget role No. 1.”
—Warren Buffet

Last week, we examined seven reasons why it could be time to preserve your gains and get your money OUT of the stock market in our article, “Is Now the Time to Go to Cash?” In summary, we examined:

  • Rising volatility in the markets
  • A stalled stock market teetering on the edge
  • Climbing interest rates
  • Rising debt—both national and personal
  • Bonds losing value
  • A slowing real estate market
  • And the “smart money” pulling out of stocks and heading for safer havens.

It’s not rocket science to realize that the stock market can’t continue to hit endless new highs. But where can you put your dollars when volatility and corrections rule the day? The economic winds have changed, and it could be time to position your portfolio for a bear market. Here’s are some steps you can take:

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Is Now the Time to Go to Cash? 7 Signs Point to “Yes”

“If you got a dollar, soak it away, put it in a savings bank, bury it, do anything but spend it. Spending when we didn’t have it put us where we are today. Saving when we’ve got it will get us back to where we was before we went cuckoo.”

Will Rogers, Daily Telegram, Nov. 24, 1930

Is it time to go to cash? If we only had a crystal ball, we could give you a definitive answer! However, we can look at patterns of the past and analyze the present. As we do this, it’s hard not to notice the warning signs that suggest 2018 may be an ideal time to move more assets into cash and other fixed and safe havens.

Below are seven signs that may indicate that trouble is on the horizon, and some steps you can take to protect yourself. You’ll also find some seemingly relevant quotes from a past era sprinkled throughout, compliments of Will Rogers. A Depression-era American humorist and social commentator, his observations seem particularly appropriate to today’s economic climate.

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Capableism: The Driving Force of Progress and Prosperity

“Every individual strives to become more capable. I believe this is essential to what it means to be human.”
—Dan Sullivan

Why do we seek progress? What drives us to learn, grow and prosper? Two weeks ago, we shared some of Larry Reed’s thoughts on Socialism vs. Capitalism in our article, “What is Socialism—and Does It Work?” This week, we’d like to share some thoughts on what may be the ultimate driving force for progress and prosperity—over and above political or economic systems.

Dan Sullivan calls this force “Capablism,” which he defines as “a powerful instinctive drive in humanity to constantly increase human capability.” Capableism is the desire within us to learn, grow, and improve ourselves. It drives us to be better and do more, whether we are entrepreneurs, employees, students or stay-at-home parents seeking to develop our children’s capabilities as well as our own.

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What’s Wrong with Financial Planning? (and the Solution!)

Did you know that the financial planning industry has been around for less than 50 years!? In the span of just a few decades, the industry has had great influence on how people approach their money, where and how they save and invest.

Is this a good thing? Well, yes and no. Today, we give a bit of history and revisit some video interviews with Partners for Prosperity’s founder, Kim Butler. You’ll get an overview of financial planning—and why we don’t do typical “financial planning”—and the Prosperity Economics solution.

How Financial Planning Began

According to “A Concise History of the Financial Planning Profession” on the website of the Financial Planning Association, the financial planning industry was conceived in a December 12, 1969 meeting of 13 financial service industry leaders at a hotel near Chicago’s O’Hare airport. They were gathered together by Loren Dunton, a sales trainer from various industries who had recently authored a book called How to Sell Mutual Funds to Women. The country was in a recession, and according to Dunton.org, those who gathered were “financial product and service salesmen… driven to find a solution” to the financial challenges faced by Americans, including those in the financial industry.

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What is Socialism—and Does It Work?

“Since this is an era when many people are concerned about ‘fairness’ and ‘social justice,’ what is your ‘fair share’ of what someone else has worked for?”
—Thomas Sowell, American economist

In 2016, Democratic Socialist Bernie Sanders was the first political candidate in nearly 100 years to gain a sizable following running on a socialist platform. This spring, three women running as democratic socialists won primaries in Pennsylvania. Then a few weeks ago, a fourth—28-year-old newcomer Alexandria Ocasio-Cortez, one of Sander’s organizers and a member of the Democratic Socialist Party of America, handily unseated ten-term incumbent Joe Crowley in a New York Democratic primary. Her platform? Medicare for all, a guaranteed federal jobs program, free college and trade schools, abolishing Immigration and Customs Enforcement, and curbing the influence of money in politics.

Days after, we saw a split in Democratic leadership about the significance of the win. DNC Chairman declared Ocasio-Cortez “the future of the party,” while stalwarts such as Nancy Pelosi dismissed the victory as an isolated event in an unusually progressive district. But there is no doubt: socialism is gaining support in America.

A Harvard poll from 2016 found the majority (51 percent) of millennials, America’s largest demographic group, do not support capitalism. Another 33 percent identified themselves as socialists, though it is unclear how well the concept and its history are understood. There are important distinctions between Nordic “Social Democrat” models (a la Denmark) vs. full-fledged socialism, which rejects free markets and private profit. Shockingly, 7 percent of millennials were in favor of communism.

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The Best Investments for Your Retirement Account

Chances are, you either have an IRA, or a 401(k) you plan to convert at some point to an IRA. And chances are, you’re less than confident in how your dollars are invested. What are the BEST investments for your IRA?

In this article, we’ll look at some rules of thumb and pros and cons for choosing assets in your IRA. First, let’s look at an overview of retirement accounts and where your money might be now.

Over 43 million American households have individual retirement accounts, or IRAs. According to Rothira.com, 35 percent of households contribute to a traditional IRA, 36 percent contribute to a Roth IRA, and 9 percent contribute to a SEP or SIMPLE IRA. One in five investors has more than one type.

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Freedom is a Gift. Are You Using Yours?

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.”
– Abraham Lincoln

Today’s post is a guest post from our good friend and marketing coach, Kate Phillips of Total Wealth. Kate is a passionate advocate for entrepreneurship and business ownership and Kim Butler’s co-author of Financial Planning Has Failed.

The battles over our border policies and many people who daily cross our southern border raise some important questions: What does it mean to be an “American”? Are the freedoms we enjoy a privilege? A right? Or perhaps something that too many people take for granted?

While many people literally risk their lives for a shot at living in America, too many Americans don’t exercise the freedoms they already have. What can we learn about independence through the eyes of those who don’t dare assume it? Read on to learn how you can to start using your independence today.

Three Who Saw What Others Couldn’t

Perhaps 14 years ago, I was in a real estate investing seminar in which the speaker introduced one of their most successful students who happened to be sitting in the audience. He had been their top money-maker in the Detroit area, purchasing and fixing up forecloses to either sell or rent. The young man stood up to receive applause, and spoke into the microphone… in halting, broken English.

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