How to Create Wealth in a Volatile Economy

The inevitable market correction of the Trump administration is here. While the administration’s critics try to blame the natural movement of the market on President Trump and his successful economic policies, real economists know that no market moves up in a straight line.

This sell off is simply people taking a few of the profits they earned from investing in the market at the beginning of the Trump presidency, when stocks took off on a 45 degree angle and didn’t stop making money for about a year straight.

The elephant in the room, Brexit, has also been driving the market from the shadows for many months. The weight of the impending changes in the European Union should have put more pressure on the American economy than it did, according to the rhetoric of many left leaning economists. However, the American market continued to flourish even during the months of controversy with the UK and the EU publicly bickering over sensitive matters of the breakup.

Nonetheless, should the economy correct for a while, it is always good to keep some relevant financial techniques in mind to not only maintain a financial position, but to build wealth. Here are some of the most pertinent tips:

Learn Sideways Market Techniques

If you were in the stock market when Trump was elected, then you enjoyed a rise from Dow 18,000 (approximately) to a high of Dow 23,000 in about a year’s time. Corrections are inevitable in this environment, but what usually follows is a sideways market. You make money in these markets by selling calls and Puts. This strategy plays off of the fact that stocks will stay in a certain range of value for some time after a correction. This is a relatively conservative strategy that you can employ with very little risk to your portfolio.

Invest in Hardware

During market corrections, inflation tends to take a breather as well. You can use this time to invest in resources such as bullets, guns, generators and other items that will go up in value when the market starts moving again. It is best to invest in items such as bullets that can be easily resold in small batches at a premium.

Buy Stocks and Buy More Stocks

Market corrections always cause people to needlessly panic. Smart investors realize that corrections have nothing to do with the internal values of any stock. The reason that prices go down is simply because everyone is emotional and selling at the same time. This is the time for the smart investor to buy, buy, buy. When the market starts moving back up, you will have purchased all of your stocks at a discount.

Start a Comfort Business

When markets fall, people naturally get stressed, which tends to make people fall back on their comfort habits. These habits might include drinking, television, exercise or a number of other things. Ask around. See what people are distracting themselves with during the falling economy, and start a business around it. Even if you just hold a neighborhood barbecue and ask folks to pitch in donations, you are still providing the service of comfort and making money from it.

Buy Staples in Bulk

Just because the economy is unpredictable doesn’t mean that you will use less resources. There is no need to be uncomfortable during these times – buy your staples in bulk so that you do not have to “sacrifice” when “times get tough.” Bulk items at membership wholesale stores usually go down with the economy, so you can get a great price. Because you are not spending as much as you normally would on these items, you are also making money through the savings. Take that money and put it into some of the other pursuits on this list.

There is no reason to panic during a volatile economy or a market correction. News media will try to scare you, mostly so they can use some of the tactics above on you to make themselves money. Do not fall for the tricks. Get on the other side of the equation and use the advantage of a falling economy to become a producer and create wealth for yourself.


Ethan Warrick
Wealth Authority

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