The down cycle is ending.
US inflation is starting to come down. Supply chain pressures are easing. The job market looks good. The Nasdaq index of tech stocks is ripping higher. The S&P 500 is up for the year.
All the fear is ending as it always does.
We’ve had our recession. We’ve been slapped in the face and seen our mortgage rates go through the roof.
Now is the time for the next bull market. The next leg of the business cycle — when the next lot of fortunes for investors will be made.
Here’s how I’m thinking about it.
Interest rates are going up so they can crash back down
Real Vision, founder Raoul Pal, is the Jesus of investing in growth markets and technology trends.
When he speaks I pay attention. Recently, he did an “Ask Me Anything.” He says that central banks like the Federal Reserve aren’t stupid.
They forced interest rates up on purpose. They let interest rates climb higher even if they didn’t need to. The reason is they wanted inflation to go down faster and have a higher base interest rate to cut in the next cycle.
Many people don’t realize that when interest rates go up, it doesn’t just affect consumers. Government and corporate debt gets hit too.
And the new higher interest rates are unsustainable for the current US government debt that exists. Investing is a game and so are interest rates.
Once I understood that interest rates could never be high for long, I began to see the makings of the next bull market.
Do this: invest as if interest rates are coming down.
Bull markets come out of nowhere
The general consensus on social media is that it’s the end of the world.
Finance nerds like me are all too bearish. They can’t see things getting better. They’re missing the small signs, like crypto and the Nasdaq roaring higher. They’re in the disbelief stage.
What most people are missing is that asset prices aren’t just driven by the overall market liquidity. No. They’re driven by the devaluation of government-issued currencies.
- As governments and central banks create more money out of thin air (money printing), they artificially affect asset prices.
- As they create more monopoly money and give it to the banks, the prices of stocks, real estate, gold, and crypto rise.
Once you see this trend you can’t unsee it.
The worst thing you can do is be on the sidelines with a huge pile of cash melting like an ice cube waiting for the general public to become optimistic again. The lows are the best time to invest and accumulate.
I’ve been piling into tech stocks and Bitcoin/Ethereum for the last 6 months. When everyone else is fearful and pessimistic, I’m the most optimistic I’ve ever been. That’s a good worldview to adopt.
The same happened in 2020. When the bat virus hit the world and stocks went to the moon, I slowed right down. I got a bit scared.
That bubble popped in 2021. Many people got caught with their pants down holding some sh*tcoin crypto like Terra Luna. It blew up in their face.
You never want to be on the same page as the consensus.
You want to be slightly ahead. Optimism ignites like a bonfire when it gets going. Every day we’re seeing more wild events, that are good for markets, happening. If you sneeze … you’ll miss it.
Do this: start investing for the bull market and slowly averaging your way into your chosen investments.
Many of you are underweight tech investments
Hello! AI.
Look at Nvidia’s stock price. Are you awake yet?
Image credit- Aaron Levie via this tweet
That’s just the beginning. All the tech giants are positioning themselves for the AI revolution that’ll be bigger than the internet.
Elon Musk says he can’t buy enough Nvidia chips to meet his demand. Dig a little deeper. See what’s not being said.
There’s a reason social media is locking down and going through a transformation. The data AI needs access to for success resides on free platforms like the birdy tweet app and Reddit.
Everything is converging around AI. Even crypto plays a part. To make automation and AI ubiquitous online, we’re going to need trustless currencies and tokens to turn on new experiences.
That’s what blockchain enables. I don’t see enough of my subscribers, friends, fellow creators, or even family paying attention to this.
- They’re not buying tech stocks.
- They’re still falling for the landlord dream that’ll take them until 85 to make any money, and by then they won’t even be able to get orgasmic if ya know what I mean.
Do this: At least consider investing in a Nasdaq index fund, if nothing else, to take advantage of AI adoption that’ll create generational wealth.
It’s so damn obvious a blind pony can see it.
Crypto is different this time
Your first thought might be “scam.”
My grandfather had the same thought about the internet. “It’s full of nude videos, drug dealers, and cyber criminals who will steal your identity.”
He was a farmer. He didn’t get it.
Crypto has had all those things and probably more. We can’t deny it. But the early illegal roots of a technology don’t define it forever.
Crypto is breaking out of its shell. The crypto named Ripple won part of its lawsuit against US regulators. We’re getting closer to proper rules for crypto to operate within.
And the biggest thing is we now have big Wall Street monopolies like Blackrock filing for ETF applications, so they can create consumer and institutional crypto products.
If one of these applications gets approved by the SEC, then it’s likely to trigger a bull market in crypto. Blackrock’s success with filing applications like this is high — 575 successful filings, one rejected application.
The pause in interest rate rises, and the money printing that’s already started, is good for crypto too.
Last time the cycle was all about speculation and gambling. This next bull market in crypto feels much more mature.
Do this: start to consider investing a little into Bitcoin/Ethereum (the safest and most proven of them all).
The asset nobody talks about
This one is going to surprise you.
As markets recover and stock prices start to go higher again, it’s a decent time to make money on the internet.
In the first half of 2021 — when the last bull market was at euphoria stage — I made more money then online than I’ve ever made before.
It’s not because I’m smart.
It’s because optimism was high, money was flush, the economy was good, and people were in the mood to start a side hustle.
We’re approaching those times again.
What that means is you want to start thinking about creating digital assets — eBooks, courses, communities, templates, digital collectibles, software, checklists, online challenges, etc.
When the good times roll in again people will feel like they want to invest in themselves once more. I’d argue we should never stop … but I don’t represent the majority.
Don’t underestimate the effect collective psychology has on our spending and learning habits.
Final Thought
It’s time to drop the pessimism.
Markets are turning and the proof is in the numbers. Don’t miss out on what’s about to take place. The technology revolution is going to be highly profitable. Now is the time to think about investing and learning about AI.
Use the extra money you make in this bull market to work a little less, relax, and take care of your family.
If Bitcoin goes to $100k, I’m taking my baby daughter to Disneyland 🙂
This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.
