two VERY BAD SIGNS about the U.S. Economy | Episode 114 - a podcast by Bryan Ellis - SelfDirected.org

Warning sirens are sounding as a result of an ominous indicator in the stock market and the devaluation of the Chinese currency.  But what does that mean practically for the self-directed investor?  I’m Bryan Ellis.  I’ll tell you what it means for you RIGHT NOW in Episode #114.

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Hello, my friends.  You’re listening to the podcast of record for savvy self-directed investors like you.  I’m truly grateful that you’re listening right now.  It’s so gratifying to see how you folks are helping us grow.  For the last week or so, I’ve been waking up to see that this podcast has already been downloaded as many times by 8:00am as was happening in an entire day as recently as 2 weeks ago.  The growth is just amazing… thank you, my friends.

I’ll get to the information about the stock market and the Chinese currency in just a moment.  But I’d like to take a minute or two and make sure we’re all keeping our “eye on the ball” and are investing on PURPOSE rather than by default.

Folks, a very positive consequence of the fact that this show is growing and succeeding is that I’m slowly honing the message that I want to drive home to you every single day.

And one piece of that message is that the CORE VALUE of self-directed investors is this:  To respect your own capital.  Nobody else will do it for you.  That capital cost you time, energy and effort… or maybe it’s the result of the blood, sweat and tears of someone who cares about you.  Either way, the time, the energy, the effort it took for you to acquire it – the very LIFE it required for you to acquire it – makes that capital profoundly worthy of respect.

And NOBODY will ever respect that capital more than you will.  Not your financial advisor.  Not the government.  Not anyone else.  That’s why we have to require… we have to DEMAND… that every investment choice we make stringently complies with the S3 Investing Standard of:  SIMPLE and SAFE and STRONG.

But that’s not where the core values of self-directed investors end.  You see, there’s a core value #2 that I’d like to share with you right now, and it is this:

Profit has purpose beyond build wealth.  It’s a means to an, not an end unto itself.

Do you have clarity about YOUR purpose for the profit you’re making?  Certainly, part of your purpose is to create financial security for yourself and your loved ones, and that’s a central responsibility for you as a responsible adult.  But what about beyond that?  What about a broader, bigger purpose… maybe even a purpose that transcends just yourself and engages your entire family, maybe even for multiple generations?

I’m not going to delve deeply into that topic today, but can I encourage you to think about that in the coming days.  I’ll address it more fully in coming episodes… but my friends, I will say this:  When there’s clear purpose for your profit beyond mere wealth building, the clarity with which you operate when making investment and financial decisions steps up another level.  Your perspective becomes greater, your point of view is more enlightened.  Basically, you become wiser.  And wisdom is among the highest objectives to which any of us can aspire.

So, let this question simmer in your mind a bit:  What is the greater purpose for your profit?

Now, let’s focus on building that profit a bit more, shall we?

Folks, two very ominous events have occurred in recent days, and you need to understand them.

First:  China has devalued their currency.

And Second:  The death cross signal in U.S. stocks.

Both of those things sound a bit wonky, so here’s what those things mean in plain language:

About China’s currency:  The net effect of China’s currency being devalued is that Chinese goods will be less expensive, thus boosting sales and exports of Chinese goods, and in turn, the Chinese economy as a whole.  Currency devaluation is an artificial way to spur economic growth.  In effect, this is an acknowledgement from Beijing that trouble is brewing in China.

You are aware, aren’t you, that the Chinese stock market experienced a major crash last month?  Over $3 TRILLION in value was wiped away in a single month.  About a third of the Shanghai Composite Index vanished in just a few weeks.  And if all of the comparisons of the Chinese market crash to the great crash of 1929 prove accurate, then the Chinese market has a lot farther to fall.

Is this relevant to you?  Yes… particularly if you’re relying on Wall Street investments to grow your wealth.  To understand why, you have to look no farther than the long-time darling of Wall Street and the business world, Apple.

Apple’s stock has been very weak this year, in large part due to the realization that the Chinese economy is weak.  Since China is Apple’s primary growth market, Apple’s future looks far less predictable than it’s past.  Thus, Apple’s stock has been very weak, plunging about 14% from its high of the year.

So, follow the chain of events:  Weakness in China’s economy leads to stock market crash and currency devaluation, leading to lowered profit expectations from American companies (like Apple), leading to pressure on stock prices and declining markets overall, which leads to the second ominous issue of the day:

The DEATH CROSS signal in the U.S. stock market.

I won’t bore you with the details of the death cross, other than to say it’s one of those kinds of indicators that propeller-head types use to analyze and predict stock market movements.  The basic idea is that the long-term trend of the market is flattening out while the nearer-term trend has turned distinctly negative.  On a practical level, all it means is that more capital is flowing OUT of stocks than into them.

This signal is certainly a negative indicator, no doubt about it.  But it’s not necessarily a kiss of death.  While there have been some times that this signal has materialized and the stock market continued upward, there have been a few times when it materialized and the stock market took a real bloodbath.

But when considering the death cross in concert with the fact that China is finally beginning to admit to the weakness that all informed analysts already knew was there, well… it’s an ominous signal.

Wow… all of that is complicated.  Very.

The real point is this, my friends:  The stock market is not truly predictable… but the signals it’s giving aren’t positive.

And remember this, my friends:  if you look back at the past 80 years – the average lifespan of an American – what you’ll see is that the average annual stock market increase during that time is in the 6 percent range.

All of this volatility, unpredictability, and overwhelming risk… for a 6% average?

My friends… you have better information… better knowledge… better opportunity.

I want something better for you.

Let me ask you something, my friends, and I ask this with utmost sincerity:

Do you truly BUY IN to being a self-directed investor?  Remember – that means some… it means something specific.

It means that you RESPECT your own capital.

It means that your profit has purpose beyond wealth.

So ask yourself, my friend… is it showing respect to your capital to accept that risk… that unpredictability… that volatility… for something that, in the long run, will equal to 6%?

Will accepting such meager returns enable you to have enough profit for your purpose beyond mere wealth?

There’s a better way, my friends.  Many better ways.

If the time has come for you to think about transitioning OUT of the stock market – maybe even with just a portion of your portfolio – and into some options that are truly SIMPLE and SAFE and STRONG, I’d be delighted to talk with you.

Just go to SDIRadio.com/guidance and pick a time.  Or if you’re not in front of a computer, just text the word GUIDANCE to 33444.  Again, go to SDIRadio.com/guidance or text the word GUIDANCE to 33444.

My friends…  I appreciate you.  Would you do me a favor?  It’s this:

 

Invest wisely today, and live well forever!

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