
Ask HN: How are you preparing for the upcoming financial crisis? - useranme
The news expect a 40% correction in the US stock market soon that can make the US dollar close to worthless. Are you prepared? What do you plan on doing with cash, 401k, and other assets?
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cmurf
Retirement investments? The best option is do nothing.

Second best option the younger you are? Hope there's a big crash sooner than
later. All you contributions from that point on, grow faster (from a
discounted position) than any contributions made before that point. So the
main strategy here, since hope really is not a strategy, is to make sure
you're ready to invest as soon as the market does correct, and to invest as
much as you can in the short term following that correction.

Anything else is a game that starts approximating gambling. e.g. go to a
stronger cash position now with the plan to buy (in tranches) at perceived
market lows. Basically sell when you're feeling confident, and buy when you're
feeling nervous (following a crash). If you're selling when you're nervous,
you're doing it wrong. Buy when others are selling.

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Gustomaximus
3 things bother me with this statement;

1) 40% and soon - no-one knows this.

2) Why put 40% correction and worthless dollar hand in hand? Its possible. But
a 40% drop is significantly more likely and separate to US currency collapse.
And a US currency collapse could, in the right circumstances, spike US equity
prices.

3) US dollar close to worthless in general - I am one of the rare ones that
believe default has reasonable odds in the medium term if debt continues
unabated, outpacing GDP growth like it has for some time.

I also recognise I'm in the minority, most experts laugh at this and I have a
tendency to err on the 'plan for the worst' type thinking.

And if US dollar did become worthless, the world could likely go into
depression. Likely worse than 1920's as (to oversimplify) 1) back then
something like 60% lived in agricultural setting, or had access to family on
farms, often owning farms outright, where you could tighten belt and live very
cheaply for a few years. Now we have ~90% in urban environments and less home
ownership. 2) Peoples expectations are higher. That may lead to greater
political/social extremism in response to extreme financial events.

But in response to your question, I'd do what is standard investment advice,
keep savings into diversified ETF's so even if you get the loss you get the
bounce. And if possible maintain a cash float of X months that makes you feel
comfortable should you lose your employment, which is significantly more
likely than a full collapse.

If you really think its 40% and soon, feel free to put your money where your
mouth is and short the market.

And if you believe there will be something worse go see reddit.com/r/preppers/

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dragonwriter
> The news expect a 40% correction in the US stock market soon

“The news” is not an entity with expectations. I'm sure there is some
commentator in the news who expects that, but I see less evidence that there
is broad consensus on or, more important, any strong support for such an
expectation.

> that can make the US dollar close to worthless.

A stock market crash doesn't make dollars worthless. It just means corporate
equity rapidly became less valuable in terms of dollars.

Now, in the wake of such an event the Fed might pump trillions of dollars into
financial markets as a stimulus measure if Congress didn't do adequate fiscal
stimulus and conventional monetary stimulus was inadequate at achieving
stimulus goals. While that sounds scary, we have recent evidence that that,
too, can be done without making the dollars worthless.

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itamarst
Stock market crashed more than that in 2000 and 2008. The US dollar didn't
become worthless. If your solution is "invest in cryptocurrencies" you're
going to lose a lot more than 40%.

