Hello,
Lately things feel noisy and scary: prices go up, then down, and news tells us to worry. And as we are near to the peak of the market, I’ve received a lot of questions on how I would prepare for it since we are going through a phase where multple cycle peaks coincide, e.g 18 year real estate cycle, 200 year K wave, 150 year Benner’s cycle, etc…
Benner’s Cycle
So today, I’ll walk you through simple, clear ways to I’m protecting my money when inflation climbs, when recessions arrive, or when stock markets fall into a bear market.
HOW INFLATION HURTS US
Let’s start with inflation. Inflation means things cost more. Bread, petrol, rent, and even school books get pricier. If your money sits in cash and inflation is 5% per year, you lose buying power. That’s why protecting against inflation matters.
SIMPLE ASSET TYPES THAT HELP PROTECT AGAINST INFLATION
Stocks: Over long time periods, stocks tend to outpace inflation because companies can raise prices, grow profits, and reinvest. I prefer companies with pricing power: Firms that can raise prices without losing customers (popular brands, utilities).
Real estate: Property and rents usually rise with inflation, so buildings and land can protect value.
Commodities: Things like oil, metals, and food often go up with inflation.
Gold and some precious metals: Historically used as a hedge, though price moves can be volatile.
Inflation-linked bonds: Government bonds that adjust payments with inflation.
HOW RECESSIONS AFFECT THINGS
A recession is a broad economic slowdown (declining GDP, jobs, income) lasting months, with stock markets often falling.
In a recession, people buy less. Companies may sell less and make smaller profits. That can lower stock prices and make some businesses struggle or fail. But not all things fall the same: groceries and medicines people still buy, so those businesses hold up better.
These are industries that people still need even if money is tight:
Healthcare (doctors, hospitals, medicines)
Utilities (water, electricity)
Consumer staples (food, soap, basic household goods)
Some parts of telecom and essential services
These industries are often more stable in downturns. That doesn’t make them perfectly safe, but they typically fall less.
PROTECTION IN BEAR MARKET
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