How to Make Money from the Recession in 2019/2020 | The Trading Field

How to Make Money from the Recession in 2019/2020 | The Trading Field
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welcome to another trading field video and in this videowe are talking about the next market crash AKA the recession so
firstly I’ll be covering reasons why I believe that market crashes not only coming but it’s actually already here okay We’ll be giving facts economic data to
back up my claims and perhaps most importantly however at the end of the
video I’ll be covering reasons and ways in which you can prepare yourself for
this market crash to not only be prepared but also to make a lot of
Mone! stay tuned until the end of the video to find out exactly how
stay one step ahead of the crowd now the word recession is actually seen as
something that’s very negative okay so you can’t be slowed down but it’s got a
buzz people lose their jobs people lose the value of their investments in
century except okay but perhaps something that’s well less known is this
fact that people actually make huge fortunes from the market crash as well
so in later on this video I’m gonna show you exactly the things that you need to
be doing to make sure that you are one of those that prosper from these times
and actually be the ones that make a lot of money now just so there’s some method
behind the madness okay I’m gonna be showing you some economic data and some
facts to prove why the recession is not only here but it’s already started okay
so number one of the list is the uninterrupted bull run in the stock
market so what do we mean by this now in 2008 when the financial crisis hit the
markets actually crashed around 40% now since then not only have they recovered
they’ve been taken out for time I saw over the past 19 years or so when you
look at the stock market in historical terms the market has been looted in an
uptrend around 75 percent of the time okay now the other way around the market
has been moving down in fact intact so if we try and explain this in the most
simple terms possible and I feel get it over ten year period that means over
seven point five years the market will be in an uptrend
okay and two and a half years will be in now since 2011 now in 2019 so it’s been
around in 11 years with a market has continually moving in this direction in
case of this downward correction is actually it’s walking is actually now
number 2 on the list is the rising US debt okay now we have to understand that
the markets and now more integrated than ever before there’s more global trade
going on everything is a lot more accessible but
what does this actually mean that means that one of the most leaving economies
in the world in this case the US the decisions of this place has direct
implications on the rest of the world and causes a domino effect as we seen in
the 2008 financial crisis so firstly let’s have a look at debt in 2000 that’s
the around 10 trillion dollars now what do you think 11 years later what do you
think has happened to that number okay so in 2019 that depth is actually risen
by more than double don’t you to save dollars now we all know the implications
of debts okay whether that’s government debt that’s company that whether that
might be mafia whatever it may be okay when debt is not repaid it causes
disruptions and problems so what does that actually tell us about these
figures the fact that is actually going to increase it okay it means that the
problems on 2008 will never actually result if you look at the 2008 financial
crisis present mood for example okay all that happened to that wound is that we
covered it up with a bandage that’s it it was left untreated and if something
is left untreated for 11 years it becomes more and more infected so what
does that actually tries in conclusion is that the effects of 2008 have just
been spiraling out of control and the worst is yet to come now number
three on the list is the inverted yield curve now this is the most reliable kind of
indicator that the recession is looming now over the past 50 years or so every
time the yield curve has become inverted the recession has
shortly followed now it doesn’t have to be imminent they can take around 18 to 24
months from the yield curve becoming inverted but the recession’s always
followed. So it’s important to kind of pay attention to this and the yield curve by the
way has just become inverted!! now first of all what is a yield curve and how does it become
inverted in simple terms it is the interest in short term dated bonds
becomes greater or larger and the longer term dated bonds so if you look at
traditional investing okay the longer you kind of hold your
investment for okay if this is time no longer you kind of hold investments for
the more return that we expect to receive so for example if this is year one you’ll receive 0.5% while 10 year bonds would be something like 8% now when a yield curve is inverted however
that may become two percent okay and the longer term dated bonds when you
become six percent this way now why does this happen
it only happens because the investors are so concerned about the shorter term
economy okay around this region of recession kind of looming.
companies not producing results that should have been and they’re so
concerned about a shorter term economy now they start pumping money into their
longer-term dated bonds kind of increasing the short term bond interest rates
and causing the inversion in the yield curve now number four on the list is the cutting
of interest rates now central banks and governments use interest rates as a tool
to kind of control the economy and the rate of growth within the economy so
traditionally speaking okay if you want to grow the economy you would cut the
interest rates okay and vice versa if you want to slow down
the economy you would raise interest rates okay let me try and explain this
in the best way that I can if you imagine your bank account okay, if you’re going to decrease interest rates so if you going to make me
interest rates around 0.5% which they are currently okay now does it become more attractive to
you for you to kind of take money out of the bank or leave money in the bank in
terms of does it make more sense to take loans or does it make more sense to save, obviously in a low interest rate
environment there is more incentive to take loans kind of grow your business
rather than save money in your bank so that’s what they use in terms of growing
the economy in the hopes that small businesses will take the loans which will create more jobs and speed up the economy on the other hand however the
increase interest rates again now this becomes 5% for example
loans now become less attractive because of the high interest rate however to save in your bank earns you a higher rate of interest so more people begin to save
money in the bank and less people begin to take loans and that actually causes the
economy to slow down, hopefully that makes sense
now what is the implication of this and why is it so important right now now
governments and central banks around the world have already started slashing
interest rates now the problem here is interest rates are already so low
there’s so much that you can cut them before you can’t cut them anymore
there’s so much quantitative easing you can and so much printing money that
you can do before you devalue your currency so much that it causes other
problems around the world too, now number 5 on the list is the failing
currencies okay so the value of the currency is very closely related to the
health of the economy in itself okay now a failing currency not only has
a detrimental effect on the economy itself but also to the external debt
that it owes to others so let’s have a look at some of the currencies that have been
failing into that in 2018/ 2019 the likes of Argentina Venezuela
India Turkey for example okay and I’m trying to illustrate this the best
way that i can so if you look at the indian rupee for example and say that has been falling in value against the USD If the Indian government owes the U.S. government money and the debt is denominated in USD, now because Indian rupee has become less valuable that debt has a actually increased in value and as I mentioned before because
the markets are now more integrated and the global debt is all integrated and
closely linked that actually has a detrimental effect to the global economy
as a whole right now very quickly to cover up number six on the list now the
unemployment rates are actually at all-time lows okay now there
is only one way for them to go which is up now with the global
economy actually slowing down okay that’s going to cause pressure on the
businesses to create profit and how do businesses create profit okay they
decrease their costs which means laying off employees which causes unemployment
rates and causes recession as a result now finally lets have a look at number 7 on the list which is global uncertainty so there’s actually a lot of uncertainty in the market right
now okay so the first thing we have is you know the US and China two super
economies of the world going head-to-head in a trade war you know
arguing about who needs who more now regardless of who needs who more when
there are trade wars it causes of uncertainty in the markets which causes
disruptions in business now also let’s not forget we’ve also got the drama of brexit we’ve got a major contributor in the uk deciding to leave the EU now we’ve got other major contributors to the EU in Germany
okay and also we’ve got Italy so it’s going to be interesting
now to kind of see how other major contributors to the EU kind of deal with
increased burden that they’ll have in terms of contributing to the EU budgets etc
so these kind of things cannot be ignored
okay because these wars these brexit and political events caused uncertainty in
the markets uncertainty causes fear fear causes panic selling and so
obviously something that can’t be seen lightly as panic selling obviously causes the markets to crash okay guys now that’s all the scary and
depressing stuff out of the way i promise okay now if you remember at the start of
the video I also said that if you are well prepared and anticipated the
recession you can actually make a lot of money from these market conditions so
pay close attention to this part of the video this is where I’ll be explaining
how you can best protect yourself from these harsh market environments but also
take aggressive strategies to increase your portfolio and maximize the returns
within this market environment well number one on the list is to prepare
yourself an emergency fund that may sound very simple okay but so many people fail
to do this in normal conditions never mind in a recession if you
speak to any financial advisor they’ll actually tell you that we need
three to six months worth of savings at any given time okay now when a recession
is looming it is actually recommended to kind of increase that as much as you can
just in case if they are job cuts so you lose your job or if your income decreases
in any way shape or form you have a nest egg of savings and you can fall back on
okay well it’s also advisable to kind of cut costs okay so unnecessary costs
that you may have a spinning class that you never go to or pay membership for
three Netflix accounts that you don’t need okay begin to kind of think
of ways that you can cut those costs and build this invest nest egg up now number 2 on the list is readjusting your portfolio because your portfolio may look something like this, you’ve got 35% in blue chip stocks you’ve got 15% in emerging markets 5% in
commodities 40% in bonds and 5% in cash now this will differ based on your risk
tolerance and your age and when it comes to readjusting this portfolio this will
also differ on your age and so if you’re under 35 years
of age for example you can afford to take more risk that’s because you have longer left till retirement so you can ride out these crashes etc however if
you are over the age of 50 then you may be looking to move these investments into
safer investments because you can’t afford to take that risk
however what is good advice is in these market conditions it is increasing maybe
your cash because you have it available to reinvest in other assets okay so
maybe increasing that 15% maybe increasing your exposure to the likes of
precious metals such as gold and silver okay maybe increasing that to 15% and we
leaving bonds in 40% however what is important whether you’re young or old is because
we have had a long bull and an interrupted bull run for some time now
it’s always smart to take some profits out of the market before the correction
occurs so if you’ve got 35% in stocks you may want to take 25 percent as
profit and let the rest run okay and then you obviously use that cash to
reinvest in other things but also I talked about safe havens such as gold
okay there’s also the Japanese yen Swiss franc which are also seen as safe haven
currencies so its always important and also important to to maybe readjust your portfolio and maybe put some money in those currencies as well now number three on the list
is saving cash for reinvestment so how do we do this now I’ve talked about in
the anticipation phase to cut cost so the maid service that you don’t
need the spinning class that you don’t ever go to but pay membership for you will be cutting costs and therefore increasing your savings and cash
reserves okay now also we talked about
rebalancing your portfolio and taking some profits part out of the stock market
increasing your cash exposure as well okay now if you’re cutting costs you’re
really going to increase your disposable income okay therefore building up your cash reserves further now one thing to remember when you’re in the recession or a market
decline okay you want to be a buyer not a seller because what most people do they
don’t anticipate the recession and then when they’re in these
conditions they are desperate for cash okay so they will sell anything
they’ll sell their house they’ll sell their property massively at discounted prices you
don’t want to be the seller in this occasion you want to be a buyer so we
look at the stocks for example when you look at rebalancing your portfolio you
were taking some profits of the table also as we saw in 2008 we saw the stocks
declined by 40% so why would you not want to buy stocks at a discount of 40%
now typically speaking okay they take around two years to go back to break
even however you would have made 40 percent
in those two years you hold out for five years you might make 100 percent
doubling your money in that same amount as others have been panic selling you
have been buying these stocks at a discount same thing with property as I mentioned
people would have bought property pre-recession to see the market decline
by say 20 percent as property prices slump but because people haven’t
anticipated they are desperate for cash they begin to panic sell the property at a
discount 20% again you have the cash reserves be able to buy the property and
then make a substantial return on investment as well bro we’re recording
ah sorry checking DAX by the way so we just placed this trade on Germany DAX30
around 80 pips in profit another 20 but its running risk free anyway now number four is paying off your high interest debt so as I
mentioned before the going gets tough the last thing that you want to be doing
is paying off interest on a debt okay especially when it’s high interest so
this is the last thing that you want to do so you want to try and clear your
name of any debt pre-recession another thing that you don’t want to do okay you
don’t want to be buying stocks, why because they’re at the all-time highs and with the
recession looming as I’ve mentioned the market crash is inevitable
so if you don’t do this and instead you buy when stocks decline by 20 to 40%
you’ll be giving yourself much better entry price okay and the same thing with
the property as well why would you want to buy a property ahead of the recession
when the chances are that the property prices eventually will slump by say 20%
ok so again you don’t want to be a buyer you want to build up your cash reserves pay off
your high interest debt and be in a position to be able to buy these assets at a
discount and then ride it out and make a lot more money than what most people
would all right guys and the last one on the list in terms of exploiting the
harsh recession market conditions is actually becoming recession proof so if
you think about it as I mentioned before the businesses are all going to be
struggling they’re going to be stretched in terms of their budget in terms of
making their profits so how are they going to do that its inevitable they’re
going to lay off jobs they’re going to decrease their salaries so you need to
begin looking for side hustles or learning a new skill set so how can you do this
ok look for a new skill set for example without being biased
ok Trading is a great example because you are your own boss no one can take that away from you also in terms of recession market conditions, you can also sell or short the
market so you can benefit from the market conditions moving in a downtrend
ok and also you know if you are an expert in a field you have to remember that
no one is going to be paying for luxuries if you sell rolls royces for
example the chances are that your sales are going to decline in a recession
ok so become an expert maybe something somewhere on YouTube ok you can earn good money
posting on YouTube you can build the presence for yourself you can network
with other people so you have more job opportunities look at all these things
that I’ve mentioned before you can kind of do build side hustles up, build up
your cash reserves and be prepared for the recession that’s just looming around the corner, so there you
have it guys I’ve shown you 7 different reasons why I believe the recession is actually imminent and its actually just started so the message here though
however is not to panic and remember you want to be a buyer not a seller and you
also want to be anticipate okay I’ve show you how you can anticipate that the recessions is kind of looming around the corner those are the seven different
reasons you can then use the key areas that I’ve covered in this video to
exploit these market conditions to make money so let me in the comments do you
actually agree that the recession is actually here hopefully you found that
useful please give it a thumbs up share it with your friends so they
can also benefit and don’t forget to subscribe to our YouTube channel for
more videos just like this

15 thoughts on “How to Make Money from the Recession in 2019/2020 | The Trading Field

  1. Life changing knowledge.
    These dudes are so considerate and generous, you can tell they love what they do and what they do is so helpful to anybody looking to sustain themselves financially.
    The world is changing, and we must change with it!!

  2. Guys, this is super INTERESTING! thanks for the effort put into this video – took a few great points out of this 😊

  3. You and Yasser were spot on about the Cryptos! It will be interesting to see how it pans out. Loving the tips to stay afloat during a market crash.

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