Economics

What is the proper role of government in our economy? Why do we have a business cycle? Is it really a consequence of freedom and free markets that a business cycle is created or is it the result of government intervention? Should the market decide instead of the government who the winners and losers will be in our economy? This blog attempts to review the relevant financial stories and facts that impact the American economy.

Tuesday, September 30, 2008

Financial Planning in a Market Meltdown

What do y'all think about this type of financial planning?

Actually, if the market is behaving healthily, the DJA will decline to 8000. A normal sine cycle would fluctuate around +/1 2000 on a baseline of 10000. This cycle should continue for at least another 30 years before moving up to a baseline of 18000 wherein it will cycle for another 40 years.

So, if you’re doing your financial planning, here is what to do, because the time is getting close.

1. Convert 90% to cash for the moment. Savings accounts or savings funds are good. Very little interest but it’s a down market and you’re not losing money.

2. When the market hits 8000, convert to equities.

3. The market will fluctuate between 8000 - 10000, and you can surf on the swells. Big bursts of money making surges.

4. When bank stocks start rising, go all in. The market will again go on a 5-6 year surge up to 12000-14000. You can triple or quadruple your money during this phase.

5. At 14000, begin to convert to cash, but there will still be pockets of equity opportunities as the DJA goes down 5-7 years to 8000 again.

6. At 10000 begin to take your profits and convert to cash or tangible assets.

7. At 8000 the cycle will begin again until we reach the year 2040.

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