Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown, 4th Edition

CHAPTER 9 Covering Your Assets How Not to Lose Money

Most of us find making money far more interesting than simply not losing it. But knowing how to protect yourself is absolutely crucial to surviving and thriving in the years ahead, so please don't skip this chapter. Much more detail about investing before and during the Aftershock can be found in our last book, The Aftershock Investor, Second Edition (Wiley, November 2013), where we offer separate chapters on each type of investment, including stocks, bonds, real estate, cash, retirement, life insurance, annuities, and gold. In this book, we've condensed our investment advice into two chapters (this one and the next), in order to focus more on our macroeconomic views and predictions.

The Three Rules for Not Losing Money

There are three basic, but uncomfortable, rules for how not to lose money before and during the Aftershock. Please understand that these protection strategies are intended for the long term. In the shorter term, because of the massive stimulus that is temporarily supporting the bubbles, these protective steps are not immediately necessary. There is no immediate crisis or need for panic. But there is a real need to know what is coming and how to protect yourself from what is ahead.

For the long term, there are three simple rules for where not to invest as the dollar and other bubbles fall:

• Rule 1: Exit stocks well before the Market Cliff.
• Rule 2: Stay away from real estate as a long-term investment until after ...