How to Invest in an Economy Like This

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Overheard

“In both cases success became less about a series of victories and more about going big or going home.”- Ben Thompson

A Suggestion

How to invest in an economy like this.

I’ve been doing this for 10 years, and grew up listening to economic reports on the way to go skiing with my dad or drives to Crookston for hockey. I’ve been around the block and what I can tell, with certainty, is that this economy, and what is happening, is hard to invest in. If you look at the data, and listen to Chair Powell, the Federal Reserve Chair, you’ll just end up sitting back in your chair scratching your head. So what to do? After all, the combined assets from readers that read Weekend Reads is well into the 100s of millions. Three things:

1. Don’t make a rapid change to your strategy – your strategy has most likely worked up until this point and rarely does making a rapid changes result in great results.
2. But do change your tactics – own a real estate portfolio? Keep buying, but buy differently. Own stocks, check your exposure to tech. Have cash? Bring it to your brokerage account and buy high yield money market funds. Own a business? Work on profitability, it’ll raise your EV.
3. Stay Diversified – this is key. Everyone knows you can make a lot of money when the economy slows down. But when it comes time to protecting your asset base, don’t be a hero and try and hit a home run. Stay diversified, keep your cash flow high (if possible) and cut costs where you can.

Here’s another freebie, read a lot. While not particularly great times, these are interesting times, the tech trade is over, there is a major war in Europe, interest rates are at decades highs, the economy is adding jobs, etc.

Though times are challenging, it’s these times where you learn about yourself, your balance sheet and what you did wrong over the past cycle.

Stay nimble. Keep smiling.

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