​Many people today are overwhelmed with their bills. We’re juggling school, family, soccer, test scores, skinned knees, taxes, college funds and our aging parents. Acckk! It’s easy to just get swallowed up by the system, which is one that will have you making everyone else rich at your own expense.
 
Part of the solution is to reduce your big-ticket bills. Smarter choices in housing, transportation, utilities and taxes will offer you savings of thousands of dollars annually. That’s a bucket list vacation each year! Learn more about those strategies in the 2nd edition of my bestseller, The ABCs of Money. Cutting out café lattes can save you a few hundred dollars, but it is not your ticket to financial freedom.
 
Another piece of the winning formula is to start earning money while you sleep. When your assets (home, retirement plan, savings, etc.) increase in value, everything becomes easier. Your assets to debt increase, which raises your FICO score. Your wealth increases.
 
You can read how investing was my springboard out of almost losing my home to a dream come true lifestyle in my book, You Vs. Wall Street. The math is simple.
 
If you earn $100,000 a year and you put 10% of your gross salary in a 401K, IRA and/or health savings account, and that money earns 10% annually (what stocks and bonds have done over the last 30 years, on average), then you'll have $50,000 in your nest egg within four years, over $100,000 in seven years and by year 25, your money will earn as much as you do in your annual salary, and you’ll be a millionaire.
 

Investing alone can make you a millionaire before you’re 50 (if you start at 25). It will offer your child half a million in her college fund within 18 years. Investing yields four times (or more) the money you gain if you were just saving it.  (25 years of $10,000 annual deposits with zero interest is $250,000.)
 
Now, you might say, “I don’t earn $100,000 a year!”  But the ratios work the same, even if you earn minimum wage. If you deposit 10% and that earns 10% returns, then your nest egg will equal your salary in just seven years, and by year 25, your nest egg will earn as much as you do.  By comparison, if you are just saving, you only earn a fraction of that – missing out on all of the gains that compound year after year. If you’re not saving at all, you’re overspending and trapped in the vicious cycle of debt and debt consciousness.
 

​If you’re investing in an account that is not tax-protected, then you’re also getting killed in capital gains taxes. (401Ks, IRAs, college funds and HSAs offer many protections, including savings on income and capital gains taxes).
 
Qualified retirement funds are also financial predator-proof. No matter who you owe money to, they can’t touch your retirement accounts. This is just one of the reasons why you must pay yourself first, even if you’re in debt. If you wait to pay off debt before you start investing in your own financial freedom, wealth and future, then you’re just making the debt collector rich at your own expense. You’re missing out on compounding gains. You’re suffering from debt consciousness. Your financial freedom depends upon you adopting wealth consciousness and providing for and protecting your own livelihood and future first. (Yes, you’ll still want to pay down debt. However, you’ll understand how increases your own assets and money while you sleep is one of the most effective tools to doing that.)
 
Over the last two decades, stocks have been pretty rough sailing – for Buy and Hope investors. The NASDAQ Composite Index lost 78% in the Dot Com Recession. The Dow Jones Industrial Average dropped 55% in the Great Recession. Buy and Hope has investors losing more than half every 8-10 years, then crawling back to even, only to see another plummet.
 

​The financial indicators today are even more troubling than they were in 2000 or 2008. However, investors that diversified properly and used annual or quarterly rebalancing, earned gains during the last two recessions and have far outperformed the bull markets in between. That strategy is easy as a pie chart. You can read about this time-proven system in my books. You can learn and implement it firsthand by attending my Investor Educational Retreat. Check out Nilo Bolden’s testimonial by clicking on her name.
 
The most important first steps to take are to open the account, put 10% of your income on auto-deposit and to switch your thinking about money.  Which is why I’m encouraging you to toss out the phrase "retirement plan" and select a sexier name for your personalized “Buy My Own Island Plan" or “Send My Kid to College Fund” or “Trip Around the World Dream.”  Why? Because you’ll want to grow the gains of the fund that is working toward a goal. Whereas, odds are, you’re filing the “retirement plan” statements directly in some drawer without looking at them, hoping they’ll surprise you one day -- pleasantly.  That is, if you have even bothered to sign up for the 401k, Individual Retirement Account or Health Savings Account in the first place. If you want a pleasant surprise, you need a time-proven plan.
 
So, if you really want to go from paying bills to life’s a beach! get started now. Once you learn and implement a winning strategy, and commit to rebalancing it 1-3 times a year, you’ll be on the right track. Wisdom is the cure, and the time is now. Call 310-430-2397 to learn The ABCs of Money that we all should have received in high school.  
 

Other Blogs of Interest
The Manufacturing Recession. An Interview with Liz Ann Sonders, the Chief Investment Strategist of Charles Schwab, Inc. 
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

The Manufacturing Recession. Trade Wars. Junk Bonds. A Crystal Ball Reading on the U.S. Economy with the Chief Investment Strategist of Charles Schwab, Liz Ann Sonders. 

Liz Ann Sonders is one of the most respected investment strategists on Wall Street, with over three decades at the top of her game. On August 19, 2019, I asked her to peer into her crystal ball on what the rest of the year, and 2020, have in store for equities, and what Main Street investors should be doing to both profit and protect themselves.
 
Natalie Pace: Let’s start off with your crystal ball for 2019 and 2020.
 
Liz Ann Sonders: My crystal ball is cloudy these days. It’s a tricky landscape. We continue to think that we are late in the cycle. The manufacturing economy is quite weak, on the verge of a recession. The global manufacturing economy is arguably in a recession. So far, it has not transferred over to the services or the consumer side to a significant degree. That’s what is important to watch as we head into the latter part of the year.
 
NP: Are you concerned about the weakness in manufacturing causing a downturn in the stock market?
 
LAS: Right now, the weakness is concentrated in manufacturing. We had that a couple of years ago, which didn’t bring the overall economy down with it. You can have manufacturing only recessions. If we don’t see a lift from here, either driven from lower interest rates by the Fed or a trade deal, and manufacturing continues to weaken and it starts to filter into the consumer side, then the risk of a recession goes up. Current conditions do not suggest that. But we have to understand how the manufacturing weakness historically can morph into broader economic weakness. That is why manufacturing indicators are leading indicators. They tend to weaken first, before the consumer side of the economy.
 
NP: This year is projected to grow 2.1% compared to 2.8% last year. That is far below the 3% or higher GDP that is needed to pay for the tax cuts. What happened?
 
LAS: Tax cuts were put in place on the corporate side to stimulate capital spending. We were hoping to see business spending take over from consumer spending. Then, a few months after the tax cuts, the trade war was launched. That caused business confidence to come to a screeching halt. That offsetting force is the reason why we’ve seen the economy slow. In this environment of uncertainty, where a Tweet can change the landscape, businesses are basically saying, “We’re going to keep our powder dry here.”
 
NP: The White House Tweets boast about all of the money we’re making on the tariffs. However, aren’t tariffs simply a tax on businesses and consumers that flows into the government coffers?
 
LAS:  We pay the tariffs. Tariffs on Chinese goods are basically taxes that U.S. companies that are importing goods from China have to pay. As tariffs persist or increase, companies basically have decisions to make. Yes, they can adjust their supply chain and move manufacturing from China to Vietnam or Indonesia, but that can’t be done on a dime. That’s a longer process. In the short term, companies can eat the higher cost in their profit margins, or pass on some or all of the higher costs to consumers, or some combination of both.
 
NP: Businesses have weighed in en masse against the tariffs. However, Main Street doesn’t seem too concerned, at least not yet.
 
LAS: This next round of tariffs – which were supposed to kick in on September 1st, some of which were delayed until September 15th – are much more heavily weighted toward consumer goods. That’s why you’ve seen some consumer goods companies, like Wal-Mart (which just had great earnings), say that they are going to pass at least some of those higher costs onto consumers. In the beginning of the trade war, it was a bit more esoteric. There wasn’t as much understanding about how tariffs work. Now it’s starting to hit home.
 
NP: Are we seeing any negative impact from tariffs on corporate earnings?
 
LAS: Deere & Co. last week reported negative earnings which was very much tied to trade. More and more, companies on earnings conference calls are starting to quantify the impact that tariffs have had and likely will have. The landscape has definitely changed.
 
NP: Analysts point out that the French should make wine, not the English – that each area has natural strengths and weaknesses, which should be played to for the benefit of all. However, the pendulum has swung from globalization to nationalism and protectionism.
 
LAS: There is nothing perfect about the way our world works. There are flaws and hopefully things we can try to adjust. What has happened over the last decades is that the United States has moved away from traditional manufacturing and toward the intellectual side, in areas like artificial intelligence, robotics and new-age manufacturing. We’ve become more of a services-oriented economy. We’ve outsourced some of the traditional manufacturing to other places where it can be done more cheaply. Again, this is not a perfect system. However, globalization, and the competition that comes from globalization, has kept inflation very much in check around the globe. If we continue down this path toward protectionism and nationalism that potentially has implications for inflation.
 
NP: What’s the bottom line on tariffs? Are they good or bad?
 
LAS: Trade wars are not easy to win. Everybody involved gets hurt. What we are seeing is the impact on psyche, the impact on animal spirits. That’s happening. That’s not just perspective.
 
NP: Our concerns have been deflation for so long that inflation is just not on the radar. Are you concerned about inflation?
 
LAS: I’m always at least as intrigued by the story no one is telling as the story that everyone is telling. The story everyone is telling right now is that inflation is dead and buried forever. I can’t help but to play Devil’s Advocate in my own head and think, “If this very pat consensus turns out not to be true, what could be the factors that cause a surprise away from that consensus?” Deglobalization/protectionism could be one of those forces. We don’t see [inflation] now. I don’t think we see it in the near-term.
 
NP: Globalization has also kept the interest rates on our rather substantial $22.46 trillion public debt quite low…
 
LAS: For now, we’ve had no problem attracting investors to our Treasuries. We’re in an environment where $16 trillion of global debt has negative yields. Even though our yields are low, relative to negative yields in much of the rest of the world, it’s a pretty good bargain. At some point, that’s not going to continue.
 
NP: So, does the recent rate cut of the Federal Fund rate have you concerned that we’ll move closer to that negative yield range, where the appetite for our Treasuries might abate?
 
LAS: I hope we’re not in an environment where we are going to see negative rates here in the United States. What has been proven by having $16 trillion in negative yielding debt is that taking rates negative did not solve the economic problems in those regions. There was this idea that it would help pull these economies out of deflation, if you disincentivized hoarding money. But the exact opposite happened. It actually cemented the deflationary mindset and didn’t solve their economic woes. This idea that ever-lower interest rates is the elixir for what ails us, it’s just not the case. I certainly hope that we don’t feel that we need to go down that same path. It’s been a failed experiment globally… so far any way.
 
NP: Interest rate cuts helped bonds to keep nest eggs buoyant in the last two recessions. We’re starting out so low this time, at 2%, compared to 4.75% in June 2007 and 6.50% in June of 2000. Should Main Street investors rethink the safe side of their portfolio?   
 
LAS: We continue to think that you want to stay pretty defensive by using treasuries as a diversifier. In the equity market, be defensive. This is not a time to get out over your skis and take on a lot of risk.
 
NP: The Feds have been pointing out that 50% of the investment grade bonds are at the lowest rung – just above junk bond status. Are bonds carrying more risk than Main Street realizes?
 
LAS: [Investment grade fixed income] is a risk that we’ve been pointing out. If there is any area within markets that you can attach the bubble label to, it would be that. There is a heavy shift toward a large percentage of the so-called investment grade that are down in the triple B, the lowest rung. If things deteriorate, and you move into junk status, that can cause a lot of problems. This highly indebted, weak component of the corporate sphere will mark the end of this cycle in some way. But we don’t think it represents something akin to what happened to housing in 2007.
 
NP: Do you have any other tips for navigating your nest egg through the late stage of this business cycle?
 
LAS: For two years we’ve had an overweight to large cap and an underweight to small cap. A record high percentage of small cap companies don’t have profits. Many are zombie companies, where they just don’t have the cash flow to pay debt. They’ve been feeding out of the trough of low interest rates to survive. In a normal interest rate environment, they would never survive.
 
NP: We’re both big fans of rebalancing. Will you explain why this is such a key part of a sound investment strategy?
 
LAS: Rebalancing should always be part of a disciplined strategy. Think about the old mantra of “Buy low, sell high.” We all know as investors we’re supposed to do this. Unfortunately, when left to our own devices, we often do the opposite. The stock market is the only market where when things go on sale, we tend to run in the opposite direction. We seem to be more enthusiastic buyers when things are expensive. If Neiman Marcus had a 50% off sale that might be more intriguing to me than if they had a 50% markup.
 
What investors need to think about is that rebalancing does two very important things. It forces us to do what we know we’re supposed to do, which is to buy low, sell high, or add low, trim high. If you have a big move up in domestic equities and [your exposure] goes from 45% of your portfolio to 55% of your portfolio, your portfolio is telling you it’s time to do something. It puts investors on the right side of the trade.
 
It also means that you don’t have to worry about short-term market timing. We should never think about our portfolio as get in/get out, all or nothing. That is a losing strategy. The data has proven it for decades.
 
NP: Any last words of wisdom?
 
LAS: This entire bull market, until about a year and a half ago, didn’t get any respect. Everybody was skeptical about why it was moving up and when the next shoe was going to drop. In January 2018, it was like somebody flipped a switch. I’ve seen these bursts of optimism. I saw it then. I saw it again in September of last year, and started to see it again in both April of this year and July.
 
Sentiment is a contrarian indicator. At extremes of optimism, the market has historically done quite poorly, and at extremes of pessimism, quite the opposite. It’s not every single day that we look at it. But at extremes over the long term, it is an extremely valuable indicator. So, watch how sentiment shifts.
 
 
If you’d like to listen to my entire 25-minute interview with Liz Ann Sonders, go to BlogTalkRadio.com/NataliePace.
 
 
 
More About Liz Ann Sonders
Liz Ann Sonders analyzes and interprets the economy and markets on behalf of Schwab's clients. She is a regular guest and guest host on many CNBC programs, as well as on Bloomberg TV & Radio, CNN, Fox Business News, Nightly Business Report, PBS NewsHour, Yahoo! Finance and TheStreet.com. Liz Ann is also regularly quoted in financial publications including The Wall Street Journal, The New York Times, Barron's, Financial Times, Market Watch and Associated Press articles. 


If you're interested in protecting your nest egg before the next full-blown recession, and would like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, come to one of my Investor Educational Retreats (links below). You can also call our office at 310-430-2397 or email info @ NataliePace.com to learn more about receiving an unbiased 2nd opinion on your current plan. Be the boss of your money. 
​

Other Blogs of Interest
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​Gold has been in a rally for the last year. Since 2018, gold mining ETFs have almost doubled. Two of our hot slices are gold miners, so this is a great way to add performance to your portfolio. It’s also a reminder of how important annual rebalancing is. If you were annually rebalancing and you’ve had gold miners as hots since 2016, you’ve actually been able to double your money twice.

Adding Heat to Your Investments
A diversified portfolio has 10 funds, small, medium, large value, growth, and four hot slices. The hots are there to bring the heat. So, this is where you can invest in something that you think is emerging, and have a time-proven gauge of just how much you should be betting on this new industry, country or trend (like cryptocurrency). In investing, it’s never a good idea to be all in or all out on something. Hail Mary investments are similar to the Hail Mary football pass. When it works, it is epic – mythic even. Most of the time, however, you’re putting yourself at great risk for an interception – for the opposing team to score on your desperation.
 
In investing, trying to score big often results in a buy high, sell low strategy. That is the case because investors who jump all in are often doing so because of a hot tip or a headline. By the time you hear about something, chances are the price is already too high. (In the worst-case scenario, it’s a pump and dump scheme, which happens far too often today.) When something falls completely out of favor and nobody’s talking about it, that’s a good time to be buying low. Of course, it won’t be on your radar if you’re used to acting on hot tips and headlines, so you’ll miss the true opportunity – unless you’re doing your homework and understand how to analyze beyond what you are reading in a marketing email or article.

And that brings me to the importance of Annual Rebalancing.

Annual rebalancing is an easy way to do exactly what you’re supposed to do in your nest egg. If you have your nest egg properly diversified and are able to mark it up an easy to understand pie chart, then your annual rebalancing allows you to buy low and sell high on auto pilot. When you are just looking at gains and losses on a summary page of your account, you’re actually tempted to do the opposite – the losing strategy of selling low and buying high. Here’s how it works.
 
Annual Rebalancing is a Buy Low Sell High Plan on Auto-Pilot
1. Know What You Own. Mock up what you currently have into an easy to understand pie chart. Put all your large-cap growth funds and stocks in one slice, all your large cup values in one slice, all your mid-cap value into one slice, and the same for your mid-cap growth and small cap growth and value. Then put in the value of your four hot industries. You should then have 10 “at-risk” slices of your nest egg.
 
If you have pages and pages and pages of holdings, and it’s not easy to mark them up into an easy to understand pie chart, that’s a red flag. Most people with those dozens of pages of holdings actually only have large-cap growth and large-cap value. They are not properly diversified – typically far overweighted in these two assets – and missing small and mid caps, hots. There is typically not enough safe, and what is safe is at risk of losing money. I’ve been doing second opinions on nest eggs for the past year, and I’ve discovered that even on the safe side many people are holding a lot more risk than they realize. I’ll discuss that later on in this blog.

2. Know What a Diversified, Time-Proven Plan Looks Like. Once you know what you own and have marked it up into an easy to understand pie chart, mark up a sample pie chart based upon your age and market conditions. (If you need help with this, email info @ NataliePace.com or call 310-430-2397. Also view the sample pie chart directly below.) 

If you are worried about it being the 11th year of the bull market, and are concerned about reports that the world economy is going to weaken this year, then just overweight a little safe.
What’s the right answer on how much you should add safe? You could overweight anywhere between 0 to 20% safe.
 
I find overweighting or underweighting based upon market conditions to be a far better tool than risk tolerance. The reason for that is very similar to why you don’t go all in or all out on any asset. The chances that you get it wrong are high. Risk tolerance measures your emotions. However, your emotions are a terrible investment tool. When the markets are super high and everybody is partying like it’s 1999, you’re tempted to buy high. That’s always a bad idea. When the markets tank, and everybody has lost half of their assets, which is what happened in the last two recessions, then most people are tempted to sell low because they’re worried that everything is going to go to hell in a handbasket. That’s a buy high, sell low plan, in other words, a losing strategy.

3. Get Hot.  If you think that cryptocurrency is hot, or cannabis, technology, clean energy, gold or some country in South America, simply add that hot industry to one of your four hot slices. This adds performance to your portfolio when you’re right, and limits your losses when you are wrong.
 
4. Annual Rebalancing.  And here is where annual rebalancing comes in. Each year, mark up what you have, You’ll notice that some of your at-risk slices have gotten fatter and some have gotten thinner. The fat slices have made a lot of gains. Trimming them back to the right size is selling high. The thin slices need to get beefed up a little bit. A slice has gotten thinner because the price is lower. So, when you buy more, you’re buying low. This simple strategy would have saved your nest egg from the Great Recession and the Dot Com Recession. It also would have allowed you to make even more gains on gold.
 
5. Gold Miner ETFs Have Doubled in the Last Few Months. RING, the iShares MSCI Global Gold Miners ETF, was trading at $23.79 on August 26, 2019. On September 14, 2018, you could have purchased that fund for $13.33. The current gold rally actually began in 2016. On January 26, 2016, you could have purchased RING for $10/share. And here is where annual rebalancing could have really enhanced your gains in the gold miners. By August of 2016, RING was at $26/share. So, if you were rebalancing 1-3 times a year (which is a good strategy), then when you noticed that your one or two slices of gold were now four slices, that’s your signal to sell high and trim back to the exposure that you want. You could have captured your double gains in August 2016, and then purchased more at a lower price in in December 2016 or September 2018. Here again, you would be in a position to consider capturing gains.
 
Also note that the hot industry on my sample pie chart is gold miners specifically, not just the price of gold. The reason for that is that, at the time, gold prices were down about 38% from the all-time high. Gold miners were down 75%. So, the upside potential for gains was far greater in the gold miner stocks – which has proven to be the case. While gold miners have doubled this year, gold prices are up 19.7%.
 
6. Each Year What’s Hot (and What’s Safe) Can Change, so in addition to doing your annual rebalancing and trimming back your slices of small, medium, large, value and growth, you’re going to be evaluating what is hot and what is safe. So, for instance, if gold is an asset that typically goes up when stocks go down, and goes up if the dollar weakens, and both stocks and the dollar are very high right now, then you might predict that weakness in those assets, which is predicted to start later this year, might extend the gold rally. In that case, you wouldn’t sell off your gold slices and replace them with another asset. In fact, if your one slice of gold has doubled, you might consider keeping two slices of gold at this time.
 
Cannabis is the fastest growing industry on Wall Street. There’s nothing that comes close. Look at these gains in revenue growth on the stock report card below. The problem with cannabis is that the industry is very, very volatile. Tilray is the poster child of that. Tilray is currently trading under $30 a share. In September 2018, it was trading at $300 per share. So, you have to play this industry more like a trader than a nest egg slice. 


​

​Another challenge for cannabis is that the industry is so new that there are not any established cannabis funds. You’re not going to be able to find a Black Rock or Invesco or Goldman Sachs ETF. So you are going to have to create your own mini fund of individual stocks.
 
When you combine the volatility of individual stocks with the volatility of cannabis, then you’re really going to have to babysit your holdings. You’ll need to cherry pick the great companies from the laggards. (There are even still some penny pot stock scams lurking in the shadows.) You’ll need to buy low and sell high, rather than just wait for your 1-3 times per year rebalancing moment. Limit orders can help you to do this. (This is something that I teach in my Investor Educational Retreats and Stock Master Class.)

7. What’s Safe? For anyone over the age of 40, the biggest slice of your pie will be the safe side. It will actually be more difficult to stay buoyant in the next recession because bonds are what saved the day in 2000 and 2008. This time, interest rates are starting out too low for bonds to be of much help. So, you need to understand what’s safe in today’s world.
 
Bonds lost money last year and are more vulnerable than you might be aware of. Over 50% of the investment grade companies are at the lowest rung, just above junk status. Also, most bond funds can have up to 20% junk bonds in them. Money market funds have liquidity fees and redemption gates. Annuities are the only investment product I know where you lose money the minute you purchase them. Also there are no guarantees for annuities. They are not FDIC insured. So, if the insurance company that is holding your insurance or annuity gets into trouble, like AIG and many insurance companies did before we bailed them out in 2008, your future is at risk. Insurance companies typically do poorly in market downturns because they invest heavily in stocks.



The Bottom Line
 Getting hot is a performance enhancer for your nest egg in any market. Being properly diversified is critically important in all markets, both Bull and Bear. Annual rebalancing is by low sell high on auto pilot for your nest egg, and is the single most important factor for protecting your assets and increasing your performance. Proper diversification, getting hot and knowing what is safe in a world where bonds and stocks lost money in 2018 is important to do right now – before the next downturn. If you wait for the headlines that the economy is in trouble, it will be too late to protect yourself.
 
The 2nd estimate of the 2nd quarter GDP growth will be released this Thursday, August 29, 2019 at 8:30 am ET. The advance estimates were very weak at 2.1% -- compared to the 1st quarter growth of 3.1%. Many economists are predicting an even weaker 2nd half of 2019, for an annual GDP growth gain of just 2.1% on the year.
 
 
 If you'd like to learn stock picking strategies from a #1 stock picker, join Natalie Pace in one of her investor educational retreats. (See links below.)  Click to access a link to Natalie Pace's bio. 

Other Blogs of Interest
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

We’ve had a series of Initial Public Offerings lately that would have been better labeled as Insider Liquidity Events. We Work is another in a long series of these, which makes 2019 IPOs look a lot like 2000 all over again.

The revenue growth of the We Company is amazing. Sales doubled in 2018 over 2017 and look on track to do that again in 2019. That is as long as the economy doesn’t start weakening (which it is predicted to do). The cash burn and net losses are eyepopping, at $1.9 billion in 2018 and $905 million in the first six months of 2019. Some of the success stories are inspiring, like the fact that Bird Co. launched out of a WeWork shop in Santa Monica, California. Karlie Kloss’ Coding Camp partners with WeWork to inspire teen girls to enter the technology industry. So, the company is indeed bringing a culture and community to office space in a way that companies like Boston Properties and other commercial REITs haven’t.

However, the business model itself is troubling. The We Company isn’t a real estate company. In fact, WeWork’s co-founder and CEO buys real estate and leases it back to The We Company. The We Company enters into long-term lease contracts (15-years or more) with Adam Neumann (and others), but banks its own business upon short-term commitments from small and mid-size businesses. This becomes even more troubling when you consider the amount of credit card debt that is held by Americans, many of who are launching their hobby on a dream with high-interest debt. Consumer credit card debt in the U.S. is $870 million. Small companies in the U.S. are so rife with cash negative operations that Charles Schwab’s Chief Investment Strategist Liz Ann Sonders has an underweight on this area of the marketplace.   

WeWork promotes CEO Adam Neumann as a guru celebrity, in the same way that Apple and Facebook have capitalized upon in the past. Founder CEOs like Jobs and Zuckerberg cement the promise that visionary disrupters are best left unencumbered and highly empowered to lead the company to greatness. However, opportunist founders, like Marc Pincus and Eric Lefkofsky, who cashed out hundreds of millions before the Zynga and Groupon IPOs (respectively) give the idea a black eye. Which type of founder/CEO is Adam Neumann?
​
Although the We Company S-1 filing claims that “the last time Adam sold any shares was October of 2017,” there has been a lot of borrowing against shares to purchase real estate, some of which is then leased back to The We Company. The Wall Street Journal reported on July 18, 2019 that Adam Neumann has cashed out $700 million in stock and loans pre-IPO. If this is true, then Neumann has cashed out far more than Pincus or Lefkofsky before him. (The We Company did not respond to an email requesting additional information on The Wall Street Journal claims.) As you can see in the chart below, companies that launch IPOs while their business is still cash negative haven’t been faring very well on Wall Street.

Companies that launch their IPOs once the business is profitable fare far better. Beyond Meat is the exception of a company that was cash negative, but has had an amazing run-up this year, post IPO. ​

With the sole exception of Zoom Video this year (and Google in 2004), the other eight IPOs listed above were cash negative when the company went public. Uber reported a 2nd quarter 2019 net loss of $5.2 billion. The We Company (WeWork) has been cash negative at least since 2016 (the earliest date reported on its IPO filing). The losses in 2018 were $1.9 billion, with $905 million lost so far in the first half of 2019. It’s easy to see the correlation between profitability and IPO success in the above charts.Here is how WeWorks fares compared to Google, when lining up management, business model, first mover advantage, disruption, etc. 

Click 
The We Company IPO joins a long list of companies trying to turn paper profits into cash on your dime, now, while the stock markets are still nice and high. (It’s difficult to launch an IPO during a recession.) Although the company’s mission/vision is touchy-feely new-agey (the annual summer camp featured Deepak Chopra), the age-old idea of a beneficent dictator appears to be more in play. Neumann holds all of the voting power, has cashed in big-time on a cash-negative company and doesn’t have enough experienced executives in the C-suite to pivot into profitability when the economic storms hit and venture capital becomes more difficult to access. Additionally, the We Company is grossly overvalued compared to its competitor IWC Plc (based out of London), which is currently profitable and paying dividends.
​
So, the long and short of an investment in WE at this time is that it really doesn’t add up (IMHO).
​
If you'd like to learn stock picking strategies from a #1 stock picker, join Natalie Pace in one of her investor educational retreats. (See links below.)  Click to access a link to Natalie Pace's bio. 

Other Blogs of Interest
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Last October 2018, a few cannabis stocks had been beaten up. However, the growth was astonishing, and Canada had just legalized marijuana for recreational use. So, I included Cronos on my hot funds list in my nest egg pie charts. Within just a few months, by March 2019, Cronos had doubled. At that time, it was a good time to take profits, so I blogged about the rather lofty prices in cannabis. The industry was still strong in revenue growth. It was just a valuation thing.
 
Now, cannabis is again beaten up, with Tilray, Cronos, Aphria, Aurora, MedMen and other reputable publicly traded companies trading at 52-week lows.
 
Cannabis investing can be a bum trip if you buy high, hold too long or don’t do the work to separate the great companies from the scams. So, below are a few tips to ensure that your cannabis adventures are a delight, without the dreaded hangover.
 
Keeping Cannabis Investing a High (Not a Hangover)

1. The growth is real
2. CBD is ubiquitous
3. The execs and board are A list
4. The share price volatility is sobering
5. There are still some stock scams out there.
6. Not every company is great quality and not all will thrive.
7. Which company is the best investment?
8. What’s your best strategy in this volatile market place?
 
And here is a little more THC on each point.
 
Keeping Cannabis Investing a High (Not a Hangover)

1. The growth is real. Check out the Stock Report Card below. There is no other industry showing revenue growth of 100-1000% year over year. Even Tesla, a super-hot market disrupter, was only at 59% revenue growth year over year in the last quarter. 

2. CBD is ubiquitous. The 2018 Farm Bill decriminalized hemp, cannabis and products that are low in THC. 33 states have legalized medicinal marijuana. Recreational marijuana is now legal in 11 U.S. states and Washington DC. (See map above.) A recent poll by the Pew Research Center found that 62% of Americans, including 74% of millennials, said they supported legalizing marijuana. Cannabis is legal in Canada and Uruguay, which is why so many publicly traded cannabis companies are based out of Canada and were listed on the Toronto Stock Exchange before going public in the U.S. 

​The next big move, other than having more states legalize recreational cannabis, will be when the FDA approves the use of CBD in food and nutritional products. Currently, CBD is not legal in “interstate commerce.” When this happens, new investors to the space could get a bit giddy.

3. The executives and board are A list. Not all companies are equal. Some are run by retail executives, like Green Growth Brands. Others, like Aphria, have a natural food guru at the helm. Still others are owned in large part by big tobacco or alcohol, including Cronos and Canopy Growth. Incidentally, Irwin Simon, the former founder and CEO of Hain Celestial who is now running Aphria, averted a hostile takeover bid from Green Growth Brands. Green Growth will have to pay Aphria $88 million for the unwanted courtship.
 
Tilray enjoys a very strong international advisory board, including Governor Howard Dean, the former vice chancellor of Germany and government officials in Portugal, Australia, New Zealand and Canada. Acreage Holdings boasts the endorsement of former Speaker of the House John Boehner, and a date-card takeover invitation from Canopy Growth (once marijuana is legal nationwide in the U.S.). Medmen’s board includes former LA Mayor Antonio Villaraigosa. Charlotte’s Web executive team is strong, with Deanie Elsner, the former president of U.S. snacks division at Kellogg in the CEO seat and a former Coca-Cola VP as the Chief Growth officer. However, the Charlotte’s Web board of directors isn’t as well-diversified as the other cannabis companies. The 6-person board includes two founders, four finance executives and one marketing specialist.
  
4. The share price volatility is sobering.
Due to the massive growth and tremendous upside potential, it’s tempting to just hang on, even when your company has doubled or more in share price. However, as 2019 has proven, a better strategy could be to capture gains, and wait for another opportunity to buy low – i.e. trading around the core. If you leave a little of your investment on the table, then you’re able to shoot the moon, should that occur. And if you’ve captured your gains, you’re in a great seat to buy low, if the share price corrects again.
 
The reason for the volatility is three-fold. First, it is happening because many of these companies soar to overpriced heights, and become too expensive. Second, hedge funds and experienced traders like capitalizing on volatile industries. Also, since 2019 is the late stage of the economic cycle, weakness in the overall market can affect everything, including this hot industry.

5. There are still some stock scams out there. There are still penny pot stock scams that are preying on unsuspecting investors. So, you must know the company and who’s running it before you click the buy button. Do not just trust the promises you receive in a marketing brochure, in an email or in a social media campaign.

6. Not every company is great quality and not all will thrive. At some point, there will be more differentiation by product. Which offers the nicest experience? Which are non-GMO or sustainably grown and harvested? Which company will be the first to infuse CBD or cannabis into an adult beverage or Point of Sale product? Which company will become the Coca-Cola of cannabis?

7. Which company is the best investment? In a rapid-paced marketplace like this, a competitive edge of 1% can snowball into a market share of over 100-fold. So, today’s rock star could be tomorrow’s has-been. This is an industry and an investment that you’ll have to babysit. Stay in touch with what’s going on with the FDA, which states and countries are legalizing and new products that are coming to market.

8. What’s your best strategy in this volatile market place? If you’re not willing to apply a trader’s strategy, you might not have a great experience with your dabble into cannabis. Anyone who jumped at Tilray for $300/share is pretty sobered up with a share price of $31/share. And even though the revenue growth of this hot industry is likely to continue to be astonishing, as more and more states and countries loosen their cannabis, CBD and hemp policies, we still have to deal with the fact that the stock market itself could go down. The GDP growth numbers are widely predicted to weaken this year worldwide, including in the U.S. and Canada.
 
 
 
The highs and hangovers of cannabis are largely because this is a very new industry in terms of legality, but a very old industry in terms of product. Pot has been around for decades. It’s now partially legal, so companies are able to book their revenue (instead of laundering it through fake businesses). Some of the old gangsters are running the companies, and others are now cultivating the product as the experts.
 
The simple truth is cannabis and CBD are here to stay. It’s only a question of when your state or country gets on board. And it is the fastest growing industry in terms of revenue growth on Wall Street. Nothing comes close.


 
Full Disclosure: I have positions in a few of the companies listed in the above Stock Report Card.
 
If you're interested in learning the strategies I developed, which earned me the ranking of #1 stock picker above over 830 A-list pundits, then join me at an upcoming Investor Educational Retreat. Visit my home page at NataliePace.com, click on one of the flyers below or call 310-430-2397 or email info @ NataliePace.com for additional information. 

Other Blogs of Interest
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​I’m often asked today if the economy this time around could ever have the devastating downturns that we have seen in the last two recessions – when the losses were more than 55%. 

​Take a look at the chart below, and you’ll see that the financial indicators this time around are more troubling than they were in 2000 or 2008.
 

​I discuss this more in depth in my blogs “A Check Up on the Economy,” “The Weakening Economy” and more. (See the end of this blog for a list of recent blogs).
 
So, the short answer is that, sadly, “Yes. Today’s economy could have losses like we suffered in 2000-2002 and 2008.” In fact, with today’s policy impotence, the downturn could be longer lasting and more severe. And, with the expansion of wealth in the upper 1% and the squeeze and debt-load of the Middle Class, this is all happening on the backs of the Average American. 

So, what can you do about it? You’ll do well to start adopting the money strategies of the 1%, many of which are outlined below. Wisdom is the cure.
 
Recession Proof Your Life with Strategies of the 1%.
 
Home.

1. Can you afford your home? Is it time to down-size or monetize?
2. Align your mortgage pay-off date with your retirement date.
3. Lock in a fixed rate. 

Retirement

1. Is your financial plan longer than just a few pages? Did you lose more than 1/3 in the Great Recession? If you answer yes to either of these questions, then it’s a good idea to get an unbiased second opinion now to ensure that your plan can hold up in the next downturn.
2. Apply the easy-as-a-pie-chart nest egg strategies that are outlined in The ABCs of Money, 2nd edition.
3. Know what’s safe and how to get safe in a world where bonds are losing money and are over-leveraged, and money market funds have redemption gates and liquidity fees.
4. Be the boss of your money. Ask your “financial advisor” for a chart of the returns of your portfolio for the past 15 years, compared to the S&P500. Most people are tracking the index, but performing about 1.5-2.0% less due to fees. If the chart shadows the S&P500, then you are very vulnerable to the next downturn and should secure an unbiased second opinion now.

 
Budget

1. Are you struggling to make ends meet or using credit cards to fill in the gaps?
2. Adopt a Thrive Budget. 50% to survive and 50% to thrive. Yes, this requires thinking in a brave new way about your big ticket items. Cutting out café lattes isn’t going to fix things.
3. Stop making the tax man, the debt collector, the utility company, the gas station, the insurance salesman, etc. rich at your own expense.
4. Learn how to save thousands with smarter big-ticket choices, i.e. housing, transportation, medical insurance, insurance, utilities. Learn smart strategies that are healthier fiscally and physically for you.
5. If you are paying an arm and a leg for health insurance, and you are healthy, then you should consider a Health Savings Account (HSA).

 
Income

1. Increase your income by depositing 10% of your net income into a tax-protected retirement account. Deposit as much as possible into tax-protected retirement accounts first, including your HSA.
2. Learn how to properly invest the money in your retirement plan and your brokerage accounts. Buy & Hope hasn’t worked at all in the New Millennium. Modern portfolio theory, annual rebalancing, getting hot, knowing what’s safe in a world where stocks and bonds are overleveraged and in bubbles (i.e. our easy-as-a-pie-chart nest egg strategies) has worked fantastically – earning gains in the last two recessions and outperforming the bull markets in between.
3. Consider safe, income-producing hard assets that you purchase for a good price (including solar). Real estate is not a good price right now. However, could your existing home be more income-producing? Should you look now for partners for an apartment building project, so that when prices abate, you’re ready to swoop in?
4. Keep your job. If you’re looking for a job, try to secure one sooner rather than later. Employment is more difficult to obtain during recessions.

 
Debt

1. Is debt the first thing you think about when you get a windfall, or when your paycheck arrives? Shouldn’t you be thinking about protecting your assets, providing for your future and figuring out a budgeting solution that doesn’t require taking on debt to make ends meet?
2. Start depositing as much as you can into financial predator proof accounts, including your 401K, IRA and health savings accounts.
3. Should you put the unthinkable (Chapter 11 or 7) on the table?
4. Learn what options are available for restructuring your debt and/or renegotiating the terms, payments and/or principal.
5. Avoid debt consolidation scams that promise you the moon… for an upfront payment.

 
Family

1. Keep the money in the family.
2. Solve money problems as a family.
3. Student loan debt is a crisis. Start early to save, invest and compound gains in your child’s college savings plan. Prepare them for life at college by teaching them The ABCs of Money that we all should have received in high school. Help them to reduce their big-ticket spending at college, so their college savings plan can cover their expenses and they can take on minimal or no college loan debt.
   
   

 
These are all strategies that I cover in my books and retreats. If you want to read about them, call 310-40-2397 or email info@NataliePace.com and ask for the links to the most recent editions. If you wish to learn and implement the strategies as soon as possible, before the next recession, join me at my next retreat in Arizona Oct. 19-21, 2019. Call 310-430-2397 for additional information and to register now. Click on the retreat banner ad below to access the 15+ things you’ll learn and master and to read testimonials. Teens and college students may attend the Arizona Retreat for half off the regular individual price.
 
I am also offering a 2nd opinion on your current budgeting and investing strategy. So, if you wish to know what you own, and just how safe, protected, diversified and hot you really are, call our office for pricing and information on the 2nd opinion.
 
Wisdom is the cure. You must be the boss of your money. If you relinquish your power and give it to a “financial advisor” and that advisor loses your money, it is you who loses. No amount of gnashing of teeth will bring the losses back. It took 15 years for the NASDAQ to crawl back to its 2000 highs, and 6 years for the Dow Jones Industrial Average to claw back to its 2007 peak. In the meantime, your credit will be shot, and many people risk losing their homes. There are time-proven solutions. Now is the time to learn them. 

​

Other Blogs of Interest
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

In the 2nd quarter of 2019, Apple sank to the 4th position in global smartphone sales, behind Samsung (75.1 million shipments), Huawei (58.7 million) and Oppo (36.2 million). Apple’s sales/shipments were 35.3 million for the quarter (source: IHS Markit). According to Jusy Hong, IHS Markit’s research and analysis director, “Huawei was able to replace falling international shipments with increased sales in China. However, the full effects of the ban likely will be felt by Huawei’s international business in the third quarter of this year.”

​Actually, Huawei’s sales are strong in both China and Europe – costing Apple market share in both regions. (The ban is in the U.S., Australia and Japan.) According to Apple’s 2Q 2019 earnings report, net Apple sales in Greater China and Europe fell in the 2nd quarter year over year, by -4% and -2%, respectively. Sales in the Americas were also down 1%, while the rest of Asia Pacific and Japan increased 13% and 5.6%, respectively. Apple is projecting flat revenue growth of $61-$64 billion for the next quarter (its fiscal 4th quarter). 

​What is perhaps just as relevant as slipping to 4th in smartphone sales is that Apple’s diluted earnings per share actually dropped 7%, despite a massive buyback attack from Apple of $17 billion in share repurchases. Apple has the largest corporate share buyback plan in the U.S. by far, having repurchased $74.2 billion in shares in 2018 and $41 billion already in the first half of this year. The current buyback program authorizes up to $75 billion in share repurchases. The company has $94 billion in cash and marketable securities, and $135 billion in total current assets.
 
So, is Apple’s new strategy to wage war on Huawei through the White House, while repurchasing its own shares to keep investor interest piqued? Or will there be a new exciting product launch on the horizon? In the 3rd quarter 2019 earnings press release Apple CEO Tim Cook promised, “The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.” However, since Steve Jobs transitioned, the business strategy has been built more on political warfare and financial engineering than innovation. Apple’s Chief Design Officer Sir Jonathan Ive, the creative technological mind behind the Mac and the iPhone, left the company to launch his own on June 27, 2019. However, Apple will remain one of the new company’s primary clients, according to both Jony Ives and Tim Cook.
 

With 17% of Apple’s revenue coming from Greater China and 22% coming from Europe, Apple can’t afford to continue to lose market share in these countries. The tariffs and trade wars exacerbate the problem in these regions, while the Huawei ban should help Apple sales in Japan, the U.S. and Australia. A weaker yuan and stronger dollar mean that Apple’s already pricey products become unaffordable in China and Europe – even more so when compared to the prices of Huawei and Oppo. A general anti-White House sentiment in China doesn’t help. Tariffs and trade wars, and the fallout of this strategy, are problems that the White House can’t blame on the Federal Reserve.
 
Apple can afford to keep its share price afloat with share repurchases this year. However, declining sales will send a message to Wall Street that could taint investor appetite, particularly if Apple misses its revenue target in the fiscal 4th quarter of this year. That report won’t be released until the first week of November…
 
 
If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Register for the Florida Feb. 8-10, 2020 Retreat by Sept. 30, 2019 to receive the best price and a complimentary private prosperity coaching session (value $300). Call 310-430-2397 or email info@NataliePace.com to learn more now.  

I'm also offering an unbiased 2nd opinion on your current retirement plan. If you're worried that you have too much Apple in your portfolio, or would like to be sure that you are safe and properly diversified, then call 310.430.2397 or email info@NataliePace.com for pricing and information. ​​​​​​​

​

Other Blogs of Interest
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

The numbers you need to know about what’s really going on. A check up on the latest indicators, and a sobering look at what is really driving the market, and emerging industries, like cryptocurrency, cannabis and the gold rally.
 
The Federal Reserve Board is widely predicted to lower interest rates by 25 basis points today at 2:00 p.m. ET. However, it’s important to remember that even though the White House and Wall Street are pressuring the Feds to act early, that doesn’t mean they will. December 2018’s rate hike is proof of that.
 
A slight majority of governors on the federal reserve board are keenly aware that pervasive low interest rates have created financial imbalances, overleverage and asset bubbles. Actually, all of them are aware of this. However, Randy Quarles, one of the current Administration’s recent additions to the board, believes “monetary policy should be guided primarily by the outlook for unemployment and inflation and not by the state of financial vulnerabilities.” (It’s hard to imagine a board governor actually saying this a mere 12 years after the worst bank meltdown the world has seen since the Great Depression.) Lowering interest rates at this time should keep unemployment low and inflation from sinking further. However, this is a risky move due to the level of leverage (which is eyepopping astronomical) and because the U.S. is already too close to zero to really get help from lower interest rates when the economic storms start swirling. 

What financial vulnerabilities? Which Feds are more hawkish? Check out my blog on these subjects by clicking on the blue highlight. See the data below for yourself.
 
Below is what I’ll cover…
 
Slow Growth
 

• GDP
• Real Estate
• Wall Street’s Massive Share Buyback Plan
• Foreign Investments in U.S. Real Estate
• Foreign Investments in U.S. Treasuries

 
Astronomical Debt
 

• U.S. Public Debt
• Consumer Debt
• Business Debt and Loans
• State & Municipal Debt
• Underfunded Pension & OPEB Plans

 
Market Highs and Elevated Risk
 

• Real Estate
• Stocks
• Bonds
• Money Market Funds

 
Emerging Industries
 

• Libra & Cryptocurrency
• Cannabis
• Gold

 
 
And here’s the data on each point.
 
Slow Growth
 

• GDP is slowing down. (See chart below.) This is an issue for many reasons. The White House and Treasury Secretary assured Americans that the tax cut would be paid for with GDP growth above 3% for the next decade. Economists warned that these projections were fairy land and that the deficit and public debt would soar. Today, the U.S. public debt has hit to $22 trillion, and will balloon ever higher in the coming days. The budget deficit in 2018 was $800 billion.

​

 
Everyone loves lower taxes. However, in your own home, if you reduce your income, you know you had better cut your costs. Otherwise, you might lose your home or end up in bankruptcy court. The same holds true with the Federal government. The tax cuts dramatically reduced the income of the federal government. This was not made up for in economic growth, as the American people were promised. And now, debt and deficits have soared to all-time, perilous highs.

• Real Estate. Real estate prices have soared to all-time highs and are unaffordable to 74% of Americans, even with the lowest mortgage interest rates than we’ve seen in decades. U.S. sales are also pulling back, albeit slowly, with a drop of 2.2% year over year in June of 2019 (source: National Association of Realtors).

 

• Wall Street’s Massive Share Buyback Plan. 25% of the S&P500 had their earnings per share significantly pushed up in the 1st quarter of 2019 by share repurchases, according to S&P Dow Jones Indices Senior Index Analyst Howard Silverblatt. Of the 208 issues that have reported in the 2nd quarter of 2019, almost 30% (61) have reduced their share count by 4% or more, creating at least a 4% tailwind in their earnings. 73%  of the companies in the S&P500 have an active share repurchase program. As Howard Silverblatt warns, “We need to separate EPS growth in two categories – actual growth verses growth from share count reduction. You don’t want to pay the same multiple for buybacks as you do for growth.”
• Foreign Investments in U.S. Real Estate. Foreign investment in U.S. existing homes sank by 36% over the last year.
• Foreign Investments in U.S. Treasuries. In 2016, Russia had $90.6 billion in long-term U.S. treasuries. By May of this year, that number had dropped to just $12 billion. At the same time, Russia is dramatically increasing its gold reserves. Learn more in my Russia blog. China’s long-term U.S. treasuries holdings were $1.2 trillion in 2016. This year, the holdings are down to $1.1 trillion. China’s sell-off hasn’t been as swift as Russia’s. However, the trend line is headed down, and the trade war isn’t helping.
  
  Astronomical Debt
  
  
• U.S. Public Debt. The U.S. public debt is currently at $22 trillion – and will soar even higher once the Debt Ceiling is officially lifted. When the Tax Cuts were announced the Treasury Department and the White House assured Americans that economic growth would mean they could start paying down the debt. Few economists believed that sustained growth of 3% or higher was plausible. The Congressional Budget Office warned that soaring debt and deficits were likely to occur. Sadly, that has happened. 
  ​
  

• Total Debt and Loans. Total debt, all sectors, is at $45.4 trillion. Total loans are at $27.4 trillion. For a grand total of debt securities and loans of $72.8 trillion. This astronomical level of debt is accompanied by market highs in real estate, stocks and bonds. (See below.) What’s the risk? According to the Federal Reserve Board’s May 2019 Financial Stability Report:

 
Elevated valuation pressures tend to be associated with excessive borrowing by businesses and households because both borrowers and lenders are more willing to accept higher degrees of risk and leverage when asset prices are appreciating rapidly. The associated debt and leverage, in turn, make the risk of outsized declines in asset prices more likely and more damaging. Similarly, the risk of a run on a financial institution and the consequent fire sales of assets are greatly amplified when there is significant leverage involved. 

In other words, the economy today looks a lot like it did in 2008, when we had to bail out the banks. Next time, however, the banks will resort to a bail-in program – on your dime. (Keep reading.)
 

• State & Municipal Debt. Detroit and Stockton bankruptcies (and more) and the current pension crisis in Illinois, New Jersey, Connecticut, Kentucky and Colorado (and other states) remind us that borrowing from Millennials and Gen Z to pay the Baby Boomers is an unfair and disastrous plan. Many corporations and governments have made pension promises that they are having trouble keeping. And this is in good times, with stocks are at an all-time high. According to Pew Charitable Trusts, almost half of the U.S. states (24) were 70% underfunded on their state pension funding. As of 2017, there was only $2.9 trillion set aside to cover $4.1 trillion in liabilities. Only 8 states were at least 90% funded (Wisconsin, Idaho, Nebraska, New York, North Carolina, South Dakota, Tennessee and Utah).

 

• Underfunded Pension & OPEB Plans. According to a 2018 report by S&P Dow Jones Indices, U.S. corporate pensions and other post employment benefit plans (like health care) are underfunded by $453 billion. Since this is at a time when stocks are at an all-time high, it’s a huge red flag. As you can see from the chart below, when markets fall, so do pension funding levels. At the last two market highs (before the Dot Com and Great Recessions), pensions were actually overfunded!

 
Market Highs and Asset Risks.
 

• Real Estate. According to the National Association of Realtors, the median price of existing homes (all types) increased to an all-time high of $273,800 in June of 2019. Up to 74% of denizens cannot afford to purchase a home in their own community.
• Stocks. Stocks hit an all-time high this month. The rally began after the June 18-19, 2019 Federal Reserve Board meeting, when the Feds began “signaling” a willingness to cut rates if the economy needed it. So, the rate cut may already be priced in.
• Bonds. Over 50% of investment grade corporate bonds are at the lowest level, just above junk status. In the 2019 Financial Stability Report, the Feds describe a potential scenario where the economy weakens and there is a snowball effect of losses and illiquidity.

 

1. First, there are credit downgrades.
2. Then investors panic and want to sell.
3. However, the junk bond market is small and not very liquid.
4. Therefore, you could be stuck with your bond, which may not be able to be sold, or will have to be sold in a fire sell, if you desperately need the funds.
5. In other words, you need to understand exactly how much debt and how vulnerable your investment grade bonds and bond funds are. Now…

 

• Money Market Funds. Money market funds now have redemption gates and liquidity fees, meaning you could be charged to withdraw your money, and you may be limited in the amount you may withdraw. This is part of a new bank “bail-in” plan on your money.

 

Emerging Industries
 
Libra & Cryptocurrency. Facebook’s Libra cryptocurrency has a vision to create a more globally inclusive currency, based in block-chain and backed by a basket of assets (unlike most cryptocurrency that have no asset backing). The obstacles include a pervasive, inherent lack of trust that users have about Facebook. Additionally, government entities, like Congress and the Federal Reserve Board, want a thorough examination of Libra before it is allowed to infiltrate the monetary system. As for Bitcoin, Ethereum, Litecoin and others, these are mostly trading platforms. Very little actual consumption purchases are happening with the coins themselves simply because you can’t have a currency that is valued at $20,000/coin on one day and $6,000 just a few months later.

• Cannabis. Cannabis products and CBD are the fastest growing industry on the planet. Well, in fairness, this has always been a popular industry. It’s just legal now, at least in Canada. However, investors have to be quite adept to profit at this early stage of the game. Tilray soared to $300/share in mid-September of 2018, crashed to $99/share in less than a week, and is currently trading at $40/share. Check out my last three cannabis blogs, listed in the end credits of this article, for an example of how active and astute you must be to capitalize on this volatile industry.
• Gold. The Gold Rally has begun! Will it last? Click to access my Gold Rally blog.
  
  

 The Bottom Line
If the Feds cut interest rates, that, historically, kicks Wall Street back into gear. However, the “smart money” knows that the cut is coming due to economic weakness. Additionally, a rate cut is already built into the current record-highs.
 
If the Feds don’t cut interest rates, something that few on Wall Street are expecting to happen, it’s because they are concerned about financial stability. The “smart money” will understand quite clearly that the Feds are deliberately taking away the punch bowl of this bull market, which has been largely built upon businesses and consumers borrowing from Peter to pay Paul. In this case, we may see another Wall Street tantrum, such as we saw in December of 2018, when the Federal Reserve Board dared to defy the White House and raised interest rates. Stocks sank 10%, for the worst performing December since the Great Depression.
 
In either scenario, it seems very clear that we are in the latter days of this business cycle. That’s not what you’re going to hear from your broker-salesman. They will tell you how great your investments are doing (now that stocks, real estate, etc. are at an all-time high). That is why you have to be the boss of your money, and adopt a time-proven plan that doesn’t have a leaky roof that floods your financial home when economic storms hit.
 
I’ll offer comments on the Fed decision on my Twitter feed around 2:00 p.m. ET today. You can access it on the home page at NataliePace.com.
 
 
 Now is the time to fix the roof while the sun is shining (while the markets are at an all-time high). 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by July 31, 2019 to receive the best price. 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 or email info@NataliePace.com for pricing and information. ​​​​​​​
​

Other Blogs of Interest
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

The Boeing 2Q 2019 earnings report was, as expected, pretty ugly. As the company admitted in the press release, revenue was down 35%, to $15.75 billion from $24.3 billion last year. The net loss was $2.94 billion, compared to net income of $2.2 billion in 2Q 2018. The 737 Max remains grounded. According to the earnings press release, “Disciplined development and testing is underway and we will submit the final software package to the FAA once we have satisfied all of their certification requirements.”

Chairman, president and CEO Dennis Muilenburg stated in the press release that “During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals.” However, the devil is in the details. Below are a few operational red flags that are listed in the fine print of the earnings report (and elsewhere), but certainly not highlighted in the press release.
 
Red Flags in the 2Q 2019 Boeing Earnings Report
 

1. Corporate Buybacks
2. Increased Dividends
3. Borrowed Money
4. Insider Selling
5. Pensions and OPEBs
6. Price to Earnings Ratio
7. Book Value

 
And here are the details behind each point.
 
1. Corporate Buybacks
Boeing repurchased $2.65 billion of its shares in the 2nd quarter of 2019. In 1Q, Boeing repurchased $2.574 billion. $9.257 in shares were repurchased in 2018.
 
2. Increased Dividends
Boeing paid $1.2 billion in dividends in the 2nd quarter. That’s 20% higher than last year.
 
3. Borrowed Money
Boeing borrowed $4.5 billion in the quarter. Cash and marketable securities are now $9.6 billion. Total liabilities and equity, including pensions and other post-employment benefits, total $126.2 billion. FYI: The last casualty to borrow in bonds to repurchase stock and pay dividends on such a level was General Electric. As you’re likely aware, the GE dividend is now just 4 cents, and the share price has imploded by 70% from its 2017 highs.
 
4. Insider Selling
So, why is Boeing so intent on buying back its own shares, instead of keeping the borrowed money to shore up operations, and perhaps hire more engineers and specialists, to return the 737 Max to operations? (The costs of products and services were lower this quarter than last year.) It’s clearly to keep the share price shored up and keep investors from selling the stock, by baiting them with a 2.2% yield on their dividend. Insiders at Boeing, however, have already dumped $30 million of shares since the first Lion Air crash on Oct. 29, 2018. The selling began on the exact day of the crash.
 
5. Pensions and OPEBs
​Boeing was $22.3 billion underfunded on its pensions and other post-employment benefits, as of 2017. From the 2Q 2019 earnings report, it does not look like the company used any capital to reduce this underfunding level. (We’ll get the full 2018 funding status by S&P Dow Jones Indices shortly.) In past market rallies, corporations were overfunded on their pensions. However, this time around, even with markets at an all-time high, pensions remain severely underfunded, as you can see in the chart below. 

6. Price to Earnings Ratio
The forward price to earnings ratio of Boeing is 28.27 – very high for a company that is losing so much money. So far, Boeing’s 3Q is not shaping up much better than 2Q was.  
 
7. Book Value
​Boeing’s book value per share is now just 22 cents. Economist Benjamin Graham is signaling caution to investors from his grave.
 
 
Will Boeing Pull Through?
Just as General Electric is still in business, Boeing is going to pull through this. However, that doesn’t mean that there won’t be investor casualties along the way. By many value measures, Boeing is overpriced. If you’re being lured in by the dividends, it pays to remember the age-old market aphorism – “Never reach for yield.” If you’re a pensioner, and you’re being offered a buy-out, then it’s worth considering. The current underfunding status, and the apparent lack of commitment by the company to fix it while the sun is still shining, is of great concern.
 
In the next downturn, the underfunding status will likely increase, and there will be fewer resources available to address it. That can mean a forced hair cut on pensioners, as it has for other companies faced with legacy costs, such as Boeing has.  
 
What Lies Ahead?
On Friday at 8:30 am ET, the Bureau of Economic Analysis will release the 2Q 2019 GDP growth report. Current estimates have it coming in at 1.4-1.6% growth. That is far below 1Q’s 3.2%. Investors are not likely to be happy. So, making sure that your portfolio is properly protected and diversified, and that you know what’s safe in a world where both stocks and bonds lost money in 2018, is a top priority.
 
 
Now is the time to fix the roof while the sun is shining (while the markets are at an all-time high). 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by July 31, 2019 to receive the best price. 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 or email info@NataliePace.com for pricing and information. ​​​​​​​

Other Blogs of Interest
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

So, the markets are rallying because the economy is weakening… Hmmm… What might we be missing here?
 
Tune into my free July 2019 Teleconference for additional information. (Click to access.)
 
The economy is weakening by more than a few economic indicators, which has prompted Wall Street to believe there will be an interest rate cut on July 31, 2019 from the Federal Reserve Board. The cut excites everyone because low interest rates mean you can borrow money very cheaply. Err. That is if you are a corporation or you have an outstanding credit score. Main Street folks are borrowing on credit cards and paying 28% interest. Many banks have even stopped making mortgages because of the inverted yield curve. (The secondary market, like Quicken Loans, are lending like crazy.)
 
How does a weaker economy translate into higher stock prices? Is that a good thing, or is it a short-term high with long-term consequences? What should you do? Buy? Sell? Hold?
 
Below we’ll discuss:
 
1. Signs of a Weakening Economy
2. The 2Q 2019 GDP Report
3. The Shocking 36% Drop in Foreign Investment in U.S. Real Estate
4. The U.S. Budget Deficit and Skyrocketing Public Debt
5. The Federal Reserve Board Meeting on July 30-31, 2019
6. Financial Stability and Asset Bubbles
7. What You Should Do.
 
And here is additional information on each subject.
 
1. Signs of a Weakening Economy
​
The 2Q 2019 Corporate Earnings Decline (happening now).
The benefits of last year’s tax cut are last year’s news, and now corporations must return to selling more product (or buying back their own stock) to increase their earnings per share. So, which companies are hot, and which are using financial engineering?

Wall Street continues to be a tale of two cities. The newer growth companies, like FANG, are reporting strong (real) sales growth, but are overpriced. As you can see in the Stock Report Card below, valuations are lofty. You can also see that stocks that miss the growth boat are punished pretty heavily. Micron is down 26% from its 2018 high. Nvidia is down 40%. Apple repurchased $28 billion in buybacks to keep its stock price up. And this is at a time when the general market is back near its all-time high. 

The old-school blue chips have high debt, slow or negative growth, and are also overpriced. 

As you can see from the Stock Report Card above, many of the Dow Jones Industrial Average components have a negative book value, meaning that their debts are far above their assets. I’ve included General Electric because even though GE’s implosion was in 2017, few have learned the lesson. (GE was a Dow component since the beginning of the index through June 26, 2018.) GE was borrowing cheap money, repurchasing its own stock and paying dividends, instead of fixing its systemic issues – something that other Blue Chips, including Boeing, are doing. That burned through a lot of cash, but kept the share price high for years – until the banks put too many conditions on the borrowing, and the company had to slash its dividend first by half, and then to almost nothing. The GE share price dropped by 50% overnight and is still down almost 70% off of its 2017 high of $31.60. Buybacks are set to hit another all-time high in 2019.  
Last century’s name brands don’t appear to be as over-priced as the hot 21st century disrupters because buybacks are at an all-time high. Corporate buybacks take earnings per share higher (by reducing the share count), which then takes the price to earnings ratio lower. Apple tops with the list of corporate buybacks in the 1st quarter of 2019 with $23.8 billion shares repurchased, with Microsoft in the top 10 as well, with $4.8 billion in buybacks. Boeing is another top repurchaser of its own stock, along with Pfizer, Cisco, JP Morgan, Wells Fargo, UnitedHealth and Walgreen’s (and others).
Meanwhile, the Retail Apocalypse continues, with J.C. Penney seeking help from restructuring experts (i.e. bankruptcy). The company’s stock (symbol: JCP) dropped under a dollar today, making Penney’s a penny stock.
 
More Earnings
Boeing announces 2Q 2019 earnings on July 24, 2019 at 10:30 ET, about an hour after the markets open. On July 18, 2019, after the markets closed, Boeing announced a $4.9 billion charge ($8.74 per share) + increased costs of $1.7 billion. In other words, the 2Q 2019 earnings report should be ugly. This is something that investors should have seen coming. Learn more in my Boeing blog from 4.8.19. (Click to access.)
 
So, why did Boeing stock go up on July 19th, after the warning? The company is likely using buybacks to keep the stock afloat. Boeing repurchased $2.6 billion of its own stock in the 1st quarter of 2019.
 
Netflix saw sales growth of 26% this quarter and is projecting year over year revenue growth of 31.3% in the next week. That’s pretty amazing. However, the subscriber count came in lower than projections, so the stock went down. With Netflix it is largely a case of being overpriced. The company is outstanding. But the price to earnings ratio is 131.
 
Tesla’s 2Q 2019 earnings report on July 24, 2019 after the markets close should be stellar. In the 2nd quarter Tesla delivered 95,200 vehicles, compared to just 63,000 in Q1. That is an increase of 51%. This could make for a record earnings quarter. Tesla’s share price has already rallied 43% from its June 3rd 2019 low (when I published a blog predicting this stellar quarter). The only thing standing in the way of additional gains is the 2nd Quarter 2019 GDP report, which will be released on July 26, 2019 at 8:30 am ET.

2. The 2Q 2019 GDP Report (advance) will be released at 8:30 am ET on July 26, 2019. Just how weak will it be? 

Estimates are at 1.5-2.1%. Significantly lower than the 1st quarter. Full year 2019 GDP is predicted to slow to just 2.1%, compared to 2.9% in 2018. By comparison, China’s GDP this year should be 6.2%. 

3. Foreign Purchases of U.S. Existing Homes Sank by an astonishing 36% over the last 12 months. What happened? It’s largely a story of unaffordability – something I wrote about in a blog earlier this month. In the U.S., 74% of people cannot afford to buy a home in their city.

According to Lawrence Yun, the National Association of Realtors chief economist, “A confluence of many factors – slower economic growth abroad, tighter capital controls in China, a stronger U.S. dollar and a low inventory of homes for sale – contributed to the pullback of foreign buyers. However, the magnitude of the decline is quite striking, implying less confidence in owning a property in the U.S.” (That’s his way of saying that home prices are too high, and the international community isn’t taking the bait anymore.)
 
What does this mean for U.S. buyers and sellers? Certainly, it's important to remember that one of the most important considerations for successful real estate investing and home ownership is the price itself. If you’re thinking of buying, the price is too high, and unaffordable, in most U.S. markets. If you’re thinking of selling, your buying pool just got significantly smaller. If your home isn’t snatched up right away, your price may be too lofty.
 
4. U.S. Budget and $22 Trillion Public Debt. The U.S. is currently using extraordinary means to pay bills. Congress needs to raise the Debt Ceiling before we run out of money now. There is talk that the House will vote on a deal on July 26, 2019, so that the Senate can pass it before the August break. According to Paul Ashworth of Capital Economics, a research group, “The Federal government ran a deficit of $215bn in August last year which, if repeated this year, would leave it with zero cash going into September.” Chairman of the Federal Reserve Board Jerome Powell believes, as do most economists, analysts and rating agencies, that the Debt Ceiling will be raised before we run out of money. In Powell’s testimony before the House of Representatives on July 10, 2019, Powell said, “I assume that the Debt Ceiling will be raised in a timely fashion. Any other outcome is unthinkable. I wouldn’t be able to capture the range of negative outcomes.”
 
At the same hearing, Jerome Powell also expressed grave concern about the budget deficit and ballooning public debt, of $22 trillion and counting. (This will increase again once the Debt Ceiling is raised.) Powell said, “The U.S. budget is on an unsustainable path. We’ll wind up spending more on interest than on educating our grandchildren. Our generation should be paying for it rather than passing the bills onto the next generation.”

5. Will the Feds Cut Rates on July 31, 2019? There are a slight majority of Federal Reserve Board Governors who are concerned about financial stability and asset bubbles, who have been reticent to cut rates too soon. (See my analytical blog for details on which board governors lean this way.) However, the rate cut might happen for many reasons. The housing report was astonishing low. The GDP growth is predicted to be much weaker than 1Q. Earnings are slowing. And Wall Street is expecting a rate cut. The Feds don’t want another sell-off like December of 2018 (the worst December since the Great Depression). A 10% rise in stocks = 1% rise in GDP, according to Alan Greenspan. So, that might be what the Feds (and certainly the White House) want.

The Real Question is whether a rate cut will send the market higher or not. It could this summer because volume is low and novices are playing. However, once the professionals return in September, it could be a different story. Wall Street pros know that the cut was due to worries about the economy. They know that there is a slowdown in sales, too much leverage and that the prices are too high. Leverage might even be too high to support continued borrowing to repurchase shares. Just as happened with GE, when a firm is over-leveraged and needs more dough, the banks will add conditions that prevent them from repurchasing stock or paying dividends. So, fall isn't looking good for stocks this year. 

6. Financial Stability and Asset Bubbles. Low interest rates create bubbles. Today’s bubbles are more troubling than they were before the Great Recession or the Dot Com Recession. See the Asset Bubble chart directly below.
 

The media, and politicians, are encouraging investors to grade the economy on low unemployment, low inflation and high stock prices. However, bubbles pop. 74% of Americans cannot afford to purchase a home in their home town. Over 50% of the corporations that are investment grade are at the lowest rung, just above junk bond status. Additionally, according to Robert Shiller, a Nobel Prize winning economist and Yale’s professor of economics, “The only time in history going back to 1881 when [CAPE] has been higher are, A: 1929 and B: 2000.We are at a high level, and its concerning. People should be cautious now.”
 
Learn more in my blogs, “Wall Street Secrets Your Broker Isn’t Sharing With You,” “Financial Engineering is Not Real Growth,” and “The Gold Rally Has Begun.”

7. What Should You Do? Buy? Sell? Hold?
 
You should:
 

• Rebalance your nest egg now
• Know what you own, and be confident that you are properly diversified
• Know what’s safe in a world where both stocks and bonds lost money in 2018 and are vulnerable going forward
• Add some heat. There are hot industries that go up if the markets go down, and there are companies that are more fiscally healthy than others. Avoid leverage.
• Never reach for yield.

 
This may sound complicated, but it is easy-as-a-pie-chart, once you learn the ABCs of Money that we all should have received in high school. Getting safe now should be your number one priority. Don’t rely on your financial advisor to do this for you, in a world where almost everything that a financial services company can sell you is highly leveraged and overpriced.

Listen back to my free July teleconference on BlogTalkRadio.com/NataliePace, where you can get additional information on each topic. You can also hear my answer to a caller’s question, “Is gold a good place to get safe now?” Our team opens up the line for questions in the second part of the call (usually about 20-25 minutes into the call).


 
Now is the time to fix the roof while the sun is shining (while the markets are at an all-time high). 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by July 31, 2019 to receive the best price. 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 or email info@NataliePace.com for pricing and information. ​​​​​​

Other Blogs of Interest
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.