Sunday, December 24, 2017

My expectations for 2018

For me, 2018 shapes up to be one of the most exiting years in my investment life. Not because I am uncritically bullish on the stock market or on Calgary’s real estate – although I expect a turn around.  Neither is it because I see $100 oil in 2018 and a dramatic turnaround in the oil industry, although many prognosticators are getting bullish on commodities.
In fact, regarding the longest stock bull market in history – especially in the U.S. – I grow wearier, especially when combined with rising interest rates, historically high debt levels and a potential inverted yield curve.  Yes, it is possible. However, now that people have seen the stock market rise for two years in a row they may throw away all caution learned from 2008 and drive the market up in one last euphoric bubble.  Typically, though, after two years of good stock market gains, 2018 may turn out to be a bit unremarkable. With that I have predicted a crash, a boom and a nearly flat market for 2018 and so now, for good measure, I will prepare myself for all of the above.
I am exited about 2018, because in December, after a year of fighting red tape, we finally tore down (well a bulldozer did) my old residence. The building was 65 years old and the only value I could get was the value of the land.  Not that the house was in bad shape; to the contrary, it has never been in as good a shape as last year. But, in this consumption driven economy nobody wants a good house, we all want a new modern house. Especially in my neighborhood where my house was nearly the last golden oldie standing. In fact, there was the unlikely danger that it would be declared a historical building. Thank the, you-know-who – we must stay politically correct – that I had done so many renovations over the years. Did you know that some U.S. universities banned presents wrapped in Christmas paper?  The term EXmas is apparently acceptable. But as usually, I digress.
In January we start digging the new building pit. Then the foundation, and once the exterior is done, I will do a lot of the interior myself; time permitting. Although, the house may be so nice that I get afraid of screwing it up with my two left hands. Well, who cares because, I intend to live in it until my departure from this worrisome planet. Actually, I have planned for an elevator shaft in case, in my later years, I end up in a wheelchair.  For now, the shaft will be pantries and storage cupboards until that unholy day which I hope never will come.
I hope this will be a very exciting year and with the value increase of the project, I hope to go up a fair bit in net worth as well.  So, with this project and even a modestly well performing stock market and real estate market, I probably will have a quite decent 2018.
This is a lesson for many investors. For building your net worth don’t always look at the economy or the stock market. There may be projects right under your nose that could make you more money than paper securities.  Owning real assets, especially in these times of inflated securities may be worth it.  Think about owning physical gold or silver; do something with your residence or improve other real estate holdings; or start or expand your own business.  These are all investment opportunities that may make you a lot more than just clipping coupons and collecting dividends from other people’s projects.
Doing work on your own physical assets may also be a lot more satisfactory than being bullied or lied to by some CEO of a large corporation of which you happen to ‘own’ shares. Buy a piece of land in the boon dogs and build your dream-farm. And if dooms day comes and the world’s global fiat currencies bite the dust, you may find out that you are doing fine and have the means to survive.  No, I am not talking about building a defensive line around your bunker. I am talking about investing in what you enjoy owning and work at (or better play with) it.  What about having your own Bed & Breakfast place or set up your own coffee shop?  With a high unemployment rate during the next crash you may sell a lot of affordable coffee! 😊 Become a comedian and help people who lost their bearing during this new time of automation!
One of my rules in life is: “Do what you enjoy and often you will even get paid well for doing it.” That is my wish for you not only during 2018 but for your entire life: I wish you do what you enjoy and prosper from it.  For the more adventurous amongst you: No bank robberies, please!

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