Investing your money wisely is one of the most important things for securing a future for you and your family. However, with a history of market crashes, knowing how to invest wisely in order to come out of them unscathed is a crucial piece of knowledge that not everyone has. Ted Bauman works to catalog some of the most important things to keep in mind in order to avoid future market crashes. Here are some of the tips he has offered in order to keep you and your wealth safe from volatile circumstances.
In times that may be uncertain, investors need to create plans that will work during both bull markets and bear markets. Ted Bauman states that rules based selling has the ability to create unexpected crashes in the stock market. These operate under assumptions of stocks intrinsic value being too high and replacing stocks with stocks that will fare better in the future respectively. It is also important to make sure that your stock portfolio is balanced and that it has such a balance that it will persevere through both markets that are booming and markets that are busting.
He views that the majority of stocks on wall street are overvalued for the most part and have the ability to crash at any moment. Making sure the balance is correct is essential in order to offset this problem. Another piece of advice that Ted Bauman offers is to look for increases in long term interest rates. Ted Bauman views it as likely that the federal reserve will raise the U.S. treasury rates multiple times during the next several quarters. If a recession hit, it could cause the S&P 500 to drop over twenty-five percent. Ted Bauman emphasizes concepts that focus on planning for the future. Creatng a strong, long-term investment strategy is the main key to success, he says. He wrote The Bauman Letter which teaches about rational investment strategies. It is key to not trade emotionally and keep that long-term plan in your head.