The Most Dangerous Thing to Do with Your Money (DO NOT DO THIS)
Andy Snyder|August 21, 2020
Andy Snyder:
Hey, hey welcome. So today we’re going to talk about the most dangerous thing that you can do with your money today. But before we get to that, stick around to the end, that’s where I’m going to tell you how to get my Trading Research Starter Kit for free. So let’s get to it. Stock markets are at record highs, NASDAQ’s record high, S&P 500 hit records. What does it mean for the dangers of your money? The way I look at it, this stuff right here, cold hard cash is the most dangerous asset that you can have right now. And that’s because, I’ll put up a chart here on the screen, that the amount of money in the economy right now year over year is 20% higher than it was last year. That’s never happened before, the record, the previous record was 15% year over year.
And as you can see in the chart most years, it’s 5%, maybe even zero. And by a lot of economists’ estimations, inflation is a bigger threat now than ever before in history. That is very, very, very dangerous to this stuff. So the Federal Reserve, if you follow those sorts of things, if you’re an interest rate wonk, you know that the Federal Reserve out of a hundred dollars wants to take two of those dollars in purchasing power every year. So this year, next year, the year after that, we keep taking $2, $2 until eventually you don’t have much money left. That’s dangerous, but that’s not equating for printing $7 trillion worth of cash, or we’re pumping 20 to 25% more cash into the economy than ever before. And so that brings us to something that I don’t think a lot of textbooks cover. And I don’t think a lot of folks understand the idea of the opportunity cost with cash right now.
So yes, we can lose 2% a year and then that’s not great, but it’s not bad. A lot of people say, “Hey, but that’s safety. At least I know that cash isn’t going anywhere. You know, other assets are risky and I could lose that money.” That’s true. But, now I’ll pull up a chart of the stock market since 2008, right? Look at this. So, we’re up 300% more than that as we hit these highs. So that’s taking this pile of cash, adding this pile of cash, adding this pile of cash and adding this pile of cash, all by getting involved in the stock market and not just sitting on cash, which is just a depreciating asset that just keeps going down and down. So, I’m not saying go out and put all your money into speculative stocks and penny stocks, but take a bulk portion of it and yeah, keep it in cash.
But that rest, understand the opportunity costs that we’re seeing right now. Stocks are hitting record highs. All these companies are soaring. The big guys are getting bigger. These companies are seeing massive amounts of that money that was just pouring in. That cash that’s sitting in the economy, it’s never been there before is flowing to these big companies. And if you’re not taking advantage of the stock market appreciation, the bull market that’s to come, you’re going to be sitting here in five years, looking, you know, where’d my money go as the Fed takes 2%, 5%, maybe even 10%. Some folks are calling for 10% inflation within the next decade. That’s dangerous to this stuff.
So I mentioned that free Trading Research Starter Kit, September 2nd, I’m hosting, what’s called The Super Trader Rally. It’s an interactive webinar. First of its kind where everybody that attends gets that kit for free. And not only that, I’m going to release the details of my beta trading strategy. It’s perfect for beginner investors. If you’re a professional investor and want to see exactly what I’m putting into my algorithm, you got to check out this webinar. Again, it’s on September 2nd, one o’clock here on the East Coast. Click that link below and sign up and I’ll see you there. And I’ll see you in the next video. Thank you.