Life Changing

For a broader view of how I think about where we are in the current cycle, you can also visit my Home page and my Market Cycles page, where I explain why I believe we are living through one of the most unusual financial environments in modern history and how I adapt to different phases of the market.

When Markets Break, the Prepared Win

Every major downturn creates two very different paths. On the first path are investors who stay fully exposed as valuations stretch, assuming that what worked over the last decade will keep working. When the break finally comes, they ride the market down, watching years of gains disappear in months. Even if they stay invested, they often spend a large part of the next cycle just trying to get back to where they started.

On the second path are investors who recognize that markets move in cycles, not straight lines. They understand that extreme valuations, easy money, and speculative behavior eventually reverse, and they act before the crowd is forced to. They trim risk, shift toward more resilient assets, and, in some cases, allocate to assets like precious metals that have historically behaved very differently during periods of stress.

Avoiding deep losses is not about fear or pessimism. It’s about respecting the data, recognizing where we are in the cycle, and accepting that capital is hardest to protect when everyone else feels the most confident. Being safe during the decline gives you something most investors never have when the dust settles: the freedom to make rational decisions with intact capital.

A Clear Contrast: Fully Exposed vs. Precious Metals Defensive

Same starting amount — two very different outcomes. The difference was not predicting the exact top, but positioning defensively and owning assets that grew 20% while the broad market fell nearly 50%.

Why Safety Equals Opportunity

• Capital preserved compounds faster afterward.
  Losing 40–50% requires extraordinary gains just to get back to even. Protecting your portfolio from large drawdowns means more of your money is available to compound when the next recovery begins.
• Resets restore rational valuations.
  After major corrections, price-to-earnings ratios, dividend yields, and cash-flow multiples often move back into ranges that make long-term sense. That’s when patient, prepared investors can buy quality assets at attractive prices again.
• Liquidity and resilient assets create choices.
  Investors who enter a reset fully exposed are often forced to sell at the bottom. Those who keep cash, defensive positioning, and allocations to assets like precious metals can selectively buy what others are liquidating at discounts.
• Recoveries after major resets are powerful.
  History shows that the strongest returns often occur in the early years of a new cycle. Being properly positioned going into that phase can dramatically change the trajectory of a retirement plan.

This isn’t just about “not losing too much.” It’s about deliberately widening the gap between you and the investor who rode the full decline. When you protect first and then lean into opportunity after the reset, you’re no longer just surviving the cycle — you’re using it to your advantage.

A Reset Is Not a Disaster — It’s a Doorway

Major market resets are rarely comfortable while they’re happening. Volatility is elevated, news is negative, and it feels as though “this time is different.” But if you look at previous periods of stress — inflation shocks, rate-hike cycles, credit events, bubbles deflating — you’ll see a consistent pattern: investors who were able to protect their core assets and stay patient during the storm were often the ones positioned to make some of their best long-term decisions on the other side.

For retirees and pre-retirees, this distinction is critical. Taking large losses close to or early in retirement can permanently change how long your money lasts. On the other hand, preserving principal during a major reset and then re-entering selectively can allow you to rebuild confidence and participate in the next expansion from a position of strength, not anxiety.

A reset, by itself, is not automatically good or bad. It is simply the market’s way of clearing excess and repricing risk. What determines whether it becomes a setback or a doorway is how prepared you are going into it and whether you have a plan that treats safety as a strategic advantage — not an afterthought.