Dollar Index Quotes

I’m only marginally qualified to be giving advice at all. My body mass index is certainly not ideal, I frequently use my debit card to buy things that cost less than three dollars because I never have cash on me, and my bedroom is so untidy it looks like vandals ransacked the Anthropologie Sale section. I’m kind of a mess.

Since the Fed was established in 1913 the dollar has lost 95 percent of its value.

The dollar has lost over 95 percent of its value since the Fed was created.

Right, you see that girl over there, the one in that group that keeps looking right at you?'...'Right, let's say I'm convinced she's wearing black knickers - she looks like a black knickers kind of gal to me - and I'm so sure that's what she's wearing, so positive of that sartorial fact, I want to bet a million dollars on it. The trouble is, if I'm wrong, I'm wiped out. So I also bet she's wearing knickers that aren't black, but are any one of a whole basket of colours - let's say I put nine hundred and fifty thousand dollars on that possibility: that's the rest of the market; that's the hedge. This is a crude example, okay, in every sense, but hear me out. Now if I'm right, I make fifty K, but even if I'm wrong I'm going to lose fifty K, because I'm hedged. And because ninety-five per cent of my million dollars is not in use - I'm never going to be called on to show it: the only risk is in the spread - I can make similar bets with other people. Or I can bet it on something else entirely. And the beauty of it is I don't have to be right all the time - if I can just get the colour of her underwear right fifty-five per cent of the time I'm going to wind up very rich...

Emptiness was an index. It recorded the incomprehensible chronicle of the metropolis, the demographic realities, how money worked, the cobbled-together lifestyles and roosting habits. The population remained at a miraculous density, it seemed to him, for the empty rooms brimmed with evidence, in the stragglers they did or did not contain, in the busted barricades, in the expired relatives on the futon beds, arms crossed over their chests in ad hoc rites. The rooms stored anthropological clues re: kinship rituals and taboos. How they treated their dead. The rich tended to escape. Entire white-glove buildings were devoid, as Omega discovered after they worried the seams of and then shattered the glass doors to the lobby (no choice, despite the No-No Cards). The rich fled during the convulsions of the great evacuation, dragging their distilled possessions in wheeled luggage of European manufacture, leaving their thousand-dollar floor lamps to attract dust to their silver surfaces and recount luxury to later visitors, bowing like weeping willows over imported pile rugs. A larger percentage of the poor tended to stay, shoving layaway bureaus and media consoles up against the doors. There were those who decided to stay, willfully uncomprehending or stupid or incapacitated by the scope of the disaster, and those who could not leave for a hundred other reasons - because they were waiting for their girlfriend or mother or soul mate to make it home first, because their mobility was compromised or a relative was debilitated, crutched, too young. Because it was too impossible, the enormity of the thought: This is the end. He knew them all from their absences.

if the strategy is a long–short dollar-neutral strategy (i.e., the portfolio holds long and short positions with equal capital), then 10 percent is quite a good return, because then the benchmark of comparison is not the market index, but a riskless asset such as the yield of the three-month US Treasury bill (which at the time of this writing is just about zero percent).

The benefit of capturing the entire return of each asset class through low-cost index funds is that, in addition to the positive impact it will have on your financial wealth over the decades (quite possibly to the tune of hundreds of thousands of dollars, as we will find out in chapter 4), it is certain to have a profound influence on your emotional health as well.   Never

When I moved to the U.S. at six, I was unrecognizable to my mother. I was angry, chronically dissatisfied, bratty. On my second day in America, she ran out of the room in tears after I angrily demanded that she buy me a pack of colored pencils. You're not you! she sputtered between sobs, which brought me to a standstill. She couldn't recognize me. That's what she told me later, that this was not the daughter she had last seen. Being too young, I didn't know enough to ask: But what did you expect? Who am I supposed to be to you? But if I was unrecognizable to her, she was also unrecognizable to me. In this new country, she was disciplinarian, restrictive, prone to angry outbursts, easily frustrated, so fascist with arbitrary rules that struck me, even as a six-year-old, as unreasonable. For most of my childhood and adolescence, my mother was my antagonist. Whenever she'd get mad, she'd take her index finger and poke me in the forehead. You you you you you, she'd say, as if accusing me of being me. She was quick to blame me for the slightest infractions, a spilled glass, a way of sitting while eating, my future ambitions (farmer or teacher), the way I dressed, what I ate, even the way I practiced English words in the car..She was the one to deny me: the extra dollar added to my allowance; an extra hour to my curfew; the money to buy my friends' birthday presents, so that I was forced to gift them, no matter what the season, leftover Halloween candy. In those early days, we lived so frugally that we even washed, alongside the dishes in the sink, used sheets of cling wrap for reuse. She was the one to punish me, sending me to kneel in the bathtub of the darkened bathroom, carrying my father's Casio watch with an alarm setting to account for when time was up. Yet it was I who would kneel for even longer, going further and further, taking more punishment just to spite her, just to show that it meant nothing. I could take more. The sun moved across the bathroom floor, from the window to the door.

Here are some of the handicaps mutual-fund managers and other professional investors are saddled with: With billions of dollars under management, they must gravitate toward the biggest stocks—the only ones they can buy in the multimillion-dollar quantities they need to fill their portfolios. Thus many funds end up owning the same few overpriced giants. Investors tend to pour more money into funds as the market rises. The managers use that new cash to buy more of the stocks they already own, driving prices to even more dangerous heights. If fund investors ask for their money back when the market drops, the managers may need to sell stocks to cash them out. Just as the funds are forced to buy stocks at inflated prices in a rising market, they become forced sellers as stocks get cheap again. Many portfolio managers get bonuses for beating the market, so they obsessively measure their returns against benchmarks like the S & P 500 index. If a company gets added to an index, hundreds of funds compulsively buy it. (If they don’t, and that stock then does well, the managers look foolish; on the other hand, if they buy it and it does poorly, no one will blame them.) Increasingly, fund managers are expected to specialize. Just as in medicine the general practitioner has given way to the pediatric allergist and the geriatric otolaryngologist, fund managers must buy only “small growth” stocks, or only “mid-sized value” stocks, or nothing but “large blend” stocks.6 If a company gets too big, or too small, or too cheap, or an itty bit too expensive, the fund has to sell it—even if the manager loves the stock. So

In 1924, riding a wave of anti-Asian sentiment, the US government halted almost all immigration from Asia. Within a few years, California, along with several other states, banned marriages between white people and those of Asian descent. With the onset of World War II, the FBI began the Custodial Detention Index—a list of “enemy aliens,” based on demographic data, who might prove a threat to national security, but also included American citizens—second- and third-generation Japanese Americans. This list was later used to facilitate the internment of Japanese Americans. In 1940, President Franklin D. Roosevelt signed the Alien Registration Act, which compelled Japanese immigrants over the age of fourteen to be registered and fingerprinted, and to take a loyalty oath to our government. Japanese Americans were subject to curfews, their bank accounts often frozen and insurance policies canceled. On December 7, 1941, the Japanese attacked a US military base at Pearl Harbor, Hawaii. More than 2,400 Americans were killed. The following day, America declared war on Japan. On February 19, 1942, FDR signed Executive Order 9066, permitting the US secretary of war and military commanders to “prescribe military areas” on American soil that allowed the exclusion of any and all persons. This paved the way for the forced internment of nearly 120,000 Japanese Americans, without trial or cause. The ten “relocation centers” were all in remote, virtually uninhabitable desert areas. Internees lived in horrible, unsanitary conditions that included forced labor. On December 17, 1944, FDR announced the end of Japanese American internment. But many internees had no home to return to, having lost their livelihoods and property. Each internee was given twenty-five dollars and a train ticket to the place they used to live. Not one Japanese American was found guilty of treason or acts of sedition during World War II.

WHY DIVERSIFY? During the bull market of the 1990s, one of the most common criticisms of diversification was that it lowers your potential for high returns. After all, if you could identify the next Microsoft, wouldn’t it make sense for you to put all your eggs into that one basket? Well, sure. As the humorist Will Rogers once said, “Don’t gamble. Take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.” However, as Rogers knew, 20/20 foresight is not a gift granted to most investors. No matter how confident we feel, there’s no way to find out whether a stock will go up until after we buy it. Therefore, the stock you think is “the next Microsoft” may well turn out to be the next MicroStrategy instead. (That former market star went from $3,130 per share in March 2000 to $15.10 at year-end 2002, an apocalyptic loss of 99.5%).1 Keeping your money spread across many stocks and industries is the only reliable insurance against the risk of being wrong. But diversification doesn’t just minimize your odds of being wrong. It also maximizes your chances of being right. Over long periods of time, a handful of stocks turn into “superstocks” that go up 10,000% or more. Money Magazine identified the 30 best-performing stocks over the 30 years ending in 2002—and, even with 20/20 hindsight, the list is startlingly unpredictable. Rather than lots of technology or health-care stocks, it includes Southwest Airlines, Worthington Steel, Dollar General discount stores, and snuff-tobacco maker UST Inc.2 If you think you would have been willing to bet big on any of those stocks back in 1972, you are kidding yourself. Think of it this way: In the huge market haystack, only a few needles ever go on to generate truly gigantic gains. The more of the haystack you own, the higher the odds go that you will end up finding at least one of those needles. By owning the entire haystack (ideally through an index fund that tracks the total U.S. stock market) you can be sure to find every needle, thus capturing the returns of all the superstocks. Especially if you are a defensive investor, why look for the needles when you can own the whole haystack?

Every Day Take Your Daily Doses Black Cumin (Nigella sativa) (¼ tsp) As noted in the Appetite Suppression section, a systematic review and meta-analysis of randomized, controlled weight-loss trials found that about a quarter teaspoon of black cumin powder every day appears to reduce body mass index within a span of a couple of months. Note that black cumin is different from regular cumin, for which the dosing is different. (See below.) Garlic Powder (¼ tsp) Randomized, double-blind, placebo-controlled studies have found that as little as a daily quarter teaspoon of garlic powder can reduce body fat at a cost of perhaps two cents a day. Ground Ginger (1 tsp) or Cayenne Pepper (½ tsp) Randomized controlled trials have found that ¼ teaspoon to 1½ teaspoons a day of ground ginger significantly decreased body weight for just pennies a day. It can be as easy as stirring the ground spice into a cup of hot water. Note: Ginger may work better in the morning than evening. Chai tea is a tasty way to combine the green tea and ginger tweaks into a single beverage. Alternately, for BAT activation, you can add one raw jalapeño pepper or a half teaspoon of red pepper powder (or, presumably, crushed red pepper flakes) into your daily diet. To help beat the heat, you can very thinly slice or finely chop the jalapeño to reduce its bite to little prickles, or mix the red pepper into soup or the whole-food vegetable smoothie I featured in one of my cooking videos on NutritionFacts.org.4985 Nutritional Yeast (2 tsp) Two teaspoons of baker’s, brewer’s, or nutritional yeast contains roughly the amount of beta 1,3/1,6 glucans found in randomized, double-blind, placebo-controlled clinical trials to facilitate weight loss. Cumin (Cuminum cyminum) (½ tsp with lunch and dinner) Overweight women randomized to add a half teaspoon of cumin to their lunches and dinners beat out the control group by four more pounds and an extra inch off their waists. There is also evidence to support the use of the spice saffron, but a pinch a day would cost a dollar, whereas a teaspoon of cumin costs less than ten cents. Green Tea (3 cups) Drink three cups a day between meals (waiting at least an hour after a meal so as to not interfere with iron absorption). During meals, drink water, black coffee, or hibiscus tea mixed 6:1 with lemon verbena, but never exceed three cups of fluid an hour (important given my water preloading advice). Take advantage of the reinforcing effect of caffeine by drinking your green tea along with something healthy you wish you liked more, but don’t consume large amounts of caffeine within six hours of bedtime. Taking your tea without sweetener is best, but if you typically sweeten your tea with honey or sugar, try yacon syrup instead. Stay

This sort of thing sometimes causes people undue distress, as in the recent MIT Technology Review cover, featuring moonwalker Buzz Aldrin with the headline “YOU PROMISED ME MARS COLONIES. INSTEAD I GOT FACEBOOK.” But, in fairness, a Mars colony would cost a few trillion dollars, while Facebook is free. And, it’s worth noting that the choice of Facebook is a bit crafty. Imagine if they’d picked Wikipedia: “YOU PROMISED ME MARS COLONIES, AND ALL I GOT WAS ALL OF HUMAN KNOWLEDGE INDEXED AND AVAILABLE TO EVERYONE ON EARTH FOR FREE.

Dad, I’m sorry about the report card and all that, but I didn’t do anything bad to Mrs. Lima. She told Jackson and me to do the walk and the driveway, but then she wouldn’t pay us for the walk, even though we did a good job. So we just put the snow back. That’s all.” “According to Mrs. Lima,” Dad said, “she never told you to do the walk because she doesn’t use it. She goes through her garage. And you wouldn’t take her word for it. That’s what upset her the most, that you acted as if she meant to cheat you.” “But she did, Dad.” “Willie--” Dad hesitated. Then he shook his head and said, “I don’t know who to believe.” “Me. I’m your son, and I don’t lie. Much,” Willie amended carefully to cover any white lies he might have told. “That’s true,” Mom said. “You know that’s true, Harold.” Dad lifted his bony shoulders and let them drop. “All right. It’s possible Mrs. Lima’s getting forgetful and thinks she told you just the driveway. In any case, I want to satisfy her, especially after we kept her up last night with the dog barking. So you just return the money for the walk and say you’re sorry. Say you must have misunderstood her.” “That’s not fair,” Willie said. “Fair or not, it’s foolish to make bad feelings with a neighbor over three dollars.” “But Dad--” Willie couldn’t find the words for it, but he knew there was a flaw in his father’s reasoning. Wasn’t Dad holding out for an admission from his boss that he’d been wrong? “Here.” Dad took three dollars out of his own wallet and handed it to Willie. “Go. Just give her this money and say you didn’t mean to upset her…Put on your shoes and your jacket first.” Willie looked at Mom, who shrugged her shoulders. It wasn’t fair, Willie thought resentfully as he marched down his driveway and up Mrs. Lima’s with Dad’s three dollars pinched between his thumb and index finger. Mrs. Lima answered her door, dressed in a wool suit with a lot of gold chains. “Here’s your three dollars back,” Willie said. And he added, “I’m sorry my dog kept you awake last night.” “You can keep the three dollars,” she said stiffly. “I just wanted to teach you a little respect for your elders, Willie.” He nodded. “Okay.” He turned to leave. “Willie,” she called. “You can do my driveway and walk again next time it snows.” “No, thank you, Mrs. Lima,” he called back politely. Her eyes went wide with surprise. Then she shut her door fast. She might have won, but that didn’t mean he was ever going to let her trick him again, Willie told himself. He went back home and returned Dad’s three dollars to him. “So, you and Mrs. Lima made friends?” “No,” Willie said. “But I did what you told me.

THE FOLLOWING DAY, the Apple share price fell 10 percent and the company lost $75 billion in value. The single-day decline was Apple’s biggest in six years and sank its valuation to a level it had not seen since February 2017. It shook the U.S. economy. The company had become one of the most widely held institutional stocks, included in mutual funds, index funds, and 401(k)s. Thanks in part to Warren Buffett and Berkshire Hathaway, everyone from grandmothers in Florida to autoworkers in the Midwest had an interest in Apple’s business. They all suffered.

The seminal paper in the field was published in 1991 by William Sharpe, whose theories underpinned the original creation of the index fund, and was bluntly titled “The Arithmetic of Active Management.”16 This expanded on Sharpe’s earlier work, and addressed the suggestion that the index investing trend that was starting to gain ground at the time was a mere “fad.” The paper articulated what Sharpe saw as two iron rules that must hold true over time: The return on the average actively managed dollar will equal that of a dollar managed passively before costs, and after costs the return on that actively managed dollar will be less than that of a passively managed dollar. In other words, mathematically the market represents the average returns, and for every investor who outperforms the market someone must do worse. Given that index funds charge far less than traditional funds, over time the average passive investor must do better than the average active one. Other academics have later quibbled with aspects of Sharpe’s 1991 paper, with Lasse Heje Pedersen’s “Sharpening the Arithmetic of Active Management” the most prominent example. In this 2016 paper, Pedersen points out that Sharpe’s assertions rest on some crucial assumptions, such as that the “market portfolio” never actually changes. But in reality, what constitutes “the market” is in constant flux. This means that active managers can at least theoretically on average outperform it, and they perform a valuable service to the health of a markets-based economy by doing so. Nonetheless, Pedersen stresses that this should not necessarily be construed as a full-throated defense of active management. “I think that low-cost index funds is one of the most investor-friendly inventions in finance and this paper should not be used as an excuse by active managers who charge high fees while adding little or no value,” he wrote.17 “My arithmetic shows that active management can add value in aggregate, but whether it actually does, and how much, are empirical questions.

Historically, many investment groups have in practice outsourced much of the hard but dull, unglamorous work around corporate governance to a small club of consultancies known as “proxy advisors.” The biggest by far are Glass Lewis and Institutional Shareholder Services. Between them, they utterly dominate this niche industry, and are a quietly influential duo at the heart of the crossroads between the corporate and financial worlds. Glass Lewis attends more than 25,000 annual meetings across over 100 markets around the world every year. ISS brags that it covers about 44,000 meetings in 115 countries. Together, they advise thousands of investment groups with cumulatively tens of trillions of dollars’ worth of assets, and make millions of votes every year on their behalf. Many corporate executives resent the often formulaic approach of the proxy advisors, and see relying on them as an abdication of an investor’s responsibility. This is partly self-serving, as they dislike the proxy advisors’ views on compensation, for example. Yet there is an element of truth to it. Most investment groups don’t want the hassle of having to deal with many mundane issues across hundreds or even thousands of companies they own shares in. ISS’s and Glass Lewis’s raison d’être is to relieve them of this headache.

This may seem shrill, but in the United States, the birthplace of index investing, the trend is now stark, entrenched, and accelerating. Over the past decade, about 80 cents of every dollar that has gone into the US investment industry has ended up at Vanguard, State Street, and BlackRock. As a result, the combined stake in S&P 500 companies held by the Big Three has quadrupled over the past two decades, from about 5 percent in in 1998 to north of 20 percent today.

As Buffett later highlighted in a celebrated 1984 speech, one could even imagine a national coin-flipping contest of 225 million Americans, all of whom would wager a dollar on guessing the outcome. Each day the losers drop out, and the stakes would then build up for the following morning. After ten days there would be about 220,000 Americans who had correctly predicted ten flips in a row, making them over $1,000. “Now this group will probably start getting a little puffed up about this, human nature being what it is,” Buffett noted.5 “They may try to be modest, but at cocktail parties they will occasionally admit to attractive members of the opposite sex what their technique is, and what marvelous insights they bring to the field of flipping.” If the national coin-flipping championship continued, after another ten days 215 people would statistically have guessed twenty flips in a row, and turned $1 into more than $1 million. And still the net result would remain that $225 million would have been lost and $225 million would have been won. However, at this stage the successful coin flippers would really begin to buy into their own hype, Buffett predicted. “They will probably write books on ‘How I Turned a Dollar into a Million in Twenty Days Working Thirty Seconds a Morning,’ ” he joked.

The modern-day dollar bill acquired its current design in 1957. Since then its purchasing power, relative to the consumer price index, has declined by a staggering 87 per cent. Average annual inflation in that period has been over 4 per cent,

But for now, we simply recommend that for every dollar you put into individual stocks, you roll the same amount into an index fund.

Petrobras, the bellwether stock of Brazil’s Ibovespa index, has rallied more than 60 per cent from its lows this year on expectations of the publication of the results. The Ibovespa, for its part, is up 7.89 per cent in the year to date while Brazil’s currency, the real, has recovered to R$3.04 to the dollar after depreciating to more than R$3.31 last month.

Here’s a great test. Take a moment and give me your best answer to this question: Suppose you’re putting $1,000 a year into an index fund for five years. Which of these two indexes do you think would be better for you? Example 1 • The index stays at $100 per share for the first year. • It goes down to $60 the next year. • It stays at $60 the third year. • Then in the fourth year, it shoots up to $140. • In the fifth year, it ends up at $100, the same place where you started. Example 2 • The market is at $100 the first year. • $110 the second year. • $120 the third. • $130 the fourth, and • $140 the fifth year. So, which index do you think ends up making you the most money after five years? Your instincts might tell you that you’d do better in the second scenario, with steady gains, but you’d be wrong. You can actually make higher returns by investing regularly in a volatile stock market. Think about it for a moment: in example 1, by investing the same amount of dollars, you actually get to buy more shares when the index was cheaper at $60, so you owned more of the market when the price went back up! Here’s Burt Malkiel’s

I said he was a shitty agent, not a shitty politician.” Claire still couldn’t read the man’s expression. “You don’t sound like a fan.” Nolan clasped his hands together on the table. “On the surface, it seems like we’re making progress, but when I think back on the last few minutes of our conversation, I get the feeling that you’re questioning me instead of the other way around.” “You’ll make a great detective one day.” “Fingers crossed.” He flashed a grin. “I want to tell you something about the FBI.” “You always win?” “Sure, there’s that, and terrorists, of course. Kidnappers, bank robbers, pedophiles—nasty fuckers—but nuts and bolts, what we at the ol’ FBI deal in day-to-day is curiosities. Did you know that?” Claire didn’t respond. He’d clearly given this speech before. Nolan continued, “Local cops, they find something curious they can’t figure out, and they bring it to us, and we either agree that it’s curious or we don’t. And generally when we agree, it’s not just the one curious thing, it’s several curious things.” He held up his index finger. “Curious thing number one: your husband embezzled three million dollars from his company. Only three million dollars. That’s curious, because you’re loaded, right?” Claire nodded. “Curious thing number two.” He added a second finger. “Paul went to college with Quinn. He shared a dorm room with the guy, and then when they were in grad school together, they shared an apartment, and then Quinn was best man at your wedding, and then they started the business together, right?” Claire nodded again. “They’ve been best friends for almost twenty-one years, and it seemed curious to me that after twenty-one years, Quinn figures out his best buddy is stealing from their company, the one they built together from the ground up, but instead of going to his buddy and saying ‘Hey, what the fuck, buddy?’ Quinn goes straight to the FBI.” The way he put it together did seem curious, but Claire only said, “Okay.” Nolan held up a third finger. “Curious thing number three: Quinn didn’t go to the cops. He went to the FBI.” “You have domain over financial crimes.” “You’ve been reading our Web site.” Nolan seemed pleased. “But lemme ask you again: Is that what you’d do if your best friend of twenty-one years stole a small, almost negligible, amount of money from your zillion-dollar company—find the biggest, baddest stick to fuck him with?” The question gave Claire a different answer: Adam had turned in Paul to the FBI, which meant that Adam and Paul were not getting along. Either Adam Quinn didn’t know about the movies or he knew about the movies and he was trying to screw over Paul.

The ideal way to dollar-cost average is into a portfolio of index funds, which own every stock or bond worth having. That way, you renounce not only the guessing game of where the market is going but which sectors of the market—and which particular stocks or bonds within them—will do the best.

Let’s say you can spare $500 a month. By owning and dollar-cost averaging into just three index funds—$300 into one that holds the total U.S. stock market, $100 into one that holds foreign stocks, and $100 into one that holds U.S. bonds—you can ensure that you own almost every investment on the planet that’s worth owning.

Some investors won’t go with broad indexing because we know it has zero chance of outperforming the market. If we framed the decision that indexing must beat the average return of a dollar invested, we are far more likely to invest in the broad index.

homes. In this book, we will show how claims that real hourly earnings and real median household income have stagnated in postwar America and that the poverty rate has remained unchanged for fifty years are solely the result of a failure by the statistical agencies of the American government to count most transfer payments as income and to use the most accurate available price indexes to adjust for inflation. Every significant measure of economic well-being expressed in terms of dollars is higher than the official measure shown in government statistics.

There are some downsides to ETFs. First, you have to use a broker each time you buy and sell, and that usually means you’ll be charged a commission for each transaction. Needless to say, the shorter the holding period, the more these added commission costs could negate any benefits of the ETF’s lower expenses. As a result, ETFs are not suited for investors who make a number of smaller purchases, such as with dollar-cost averaging, since they’d have to pay a commission on each purchase. Rather, these investors should stick with low-cost, open-end index mutual funds.

When playing a bear market, the same rules hold: You want to diversify your risks, especially knowing that collapses move even faster than rallies. You need to decide how much safe cash or near cash you want to hold to sleep at night and to handle financial emergencies, like the loss of your job or your house. Then decide how much to put into longer-term high-quality bonds, like those 30-year Treasuries and AAA corporates, but I think it’s still premature to make this move at the time of this writing, in August 2017. Then decide how much you want to put into a dollar bull fund or the ETF UUP, which tracks the U.S. dollar versus its six major trading partners. If you’re willing to risk part of your wealth, you can also bet on financial assets going down—from stocks to gold. Stocks are the one type of financial asset that goes down in either a deflationary crisis, like the 1930s, or an inflationary one, like the 1970s. So shorting stocks is the best way to prosper in the downturn, either way. But don’t leverage this bet. The markets are simply too volatile. You can short the stock market with no leverage by simply buying an ETF (exchange-traded fund) like the ProShares Short S&P 500 (NYSEArca: SH). It’s an inverse fund on the S&P 500, so if the index goes down 50 percent, you make 50 percent. The ProShares Ultrashort (NYSEArca: QID) is double short the NASDAQ 100, which is likely to get hit the worst. If you make this play, just do a half share, to avoid that two-times leverage (hold the other half in cash or short-term bonds). Direxion Daily Small Cap Bear 3X ETF (NYSEArca: TZA) is triple short the Russell 2000, which is also likely to lead on the way down. So buy only a one-third share of this one, to remain without leverage. (That means the money you allocate here should be one-third in TZA and two-thirds in cash, to offset the leverage.) And unlike the gold bugs, I see gold collapsing. It’s an inflation hedge, not a deflation hedge. If gold rallies back as high as $1,425—on my predicted bear-market rally—then it could easily drop to around $700 within a year. Your last decision is whether to risk some of your funds betting on gold’s downside, for the greatest potential returns. You can buy DB Gold Double Short ETN (NYSEArca: DZZ)—double short gold—at a half share, to offset the leverage, or just simply short GLD, the ETF that follows gold. There you have it. How to handle the coming crash.

The ideal way to dollar-cost average is into a portfolio of index funds, which own every stock or bond worth having. That way, you renounce not only the guessing game of where the market is going but which sectors of the market—and which particular stocks or bonds within them—will do the best. Let’s say you can spare $500 a month. By owning and dollar-cost averaging into just three index funds—$300 into one that holds the total U.S. stock market, $100 into one that holds foreign stocks, and $100 into one that holds U.S. bonds—you can ensure that you own almost every investment on the planet that’s worth owning.7 Every month, like clockwork, you buy more. If the market has dropped, your preset amount goes further, buying you more shares than the month before. If the market has gone up, then your money buys you fewer shares. By putting your portfolio on permanent autopilot this way, you prevent yourself from either flinging money at the market just when it is seems most alluring (and is actually most dangerous) or refusing to buy more after a market crash has made investments truly cheaper (but seemingly more “risky”).

First, he said, we need 30% in stocks (for instance, the S&P 500 or other indexes for further diversification in this basket). Initially that sounded low to me, but remember, stocks are three times more risky than bonds. And who am I to second-guess the Yoda of asset allocation!? “Then you need long-term government bonds. Fifteen percent in intermediate term [seven- to ten-year Treasuries] and forty percent in long-term bonds [20- to 25-year Treasuries].” “Why such a large percentage?” I asked. “Because this counters the volatility of the stocks.” I remembered quickly it’s about balancing risk, not the dollar amounts. And by going out to longer-term (duration) bonds, this allocation will bring a potential for higher returns. He rounded out the portfolio with 7.5% in gold and 7.5% in commodities. “You need to have a piece of that portfolio that will do well with accelerated inflation, so you would want a percentage in gold and commodities. These have high volatility. Because there are environments where rapid inflation can hurt both stocks and bonds.” Lastly, the portfolio must be rebalanced. Meaning, when one segment does well, you must sell a portion and reallocate back to the original allocation. This should be done at least annually, and, if done properly, it can actually increase the tax efficiency. This is part of the reason why I recommend having a fiduciary implement and manage this crucial, ongoing process.

Let’s say you can spare $500 a month. By owning and dollar-cost averaging into just three index funds—$300 into one that holds the total U.S. stock market, $100 into one that holds foreign stocks, and $100 into one that holds U.S. bonds—you can ensure that you own almost every investment on the planet that’s worth owning.7 Every month, like clockwork, you buy more. If the market has dropped, your preset amount goes further, buying you more shares than the month before. If the market has gone up, then your money buys you fewer shares. By putting your portfolio on permanent autopilot this way, you prevent yourself from either flinging money at the market just when it is seems most alluring (and is actually most dangerous) or refusing to buy more after a market crash has made investments truly cheaper (but seemingly more “risky”).

Large-cap U.S. Stock S&P 500 Index Midcap U.S. Stock S&P Midcap 400 Index Small-cap U.S. Value stock Russell 2000 Value Index Non-U.S. Developed stock MSCI EAFE Index Non-U.S. Emerging stock MSCI Emerging Markets Index Real Estate Dow Jones U.S. Select REIT Index Natural Resources Goldman Sachs Natural Resources Index Commodities Deutsche Bank Liquid Commodity Index U.S. Bonds Barclays Capital Aggregate Bond Index Inflation Protected Bonds Barclays Capital U.S. Treasury Inflation Note Index Non-U.S. Bonds Citibank WGBI Non-U.S. Dollar Index Cash 3-Month Treasury Bill

If you like spending 6–8 hours per week on investments, do it. If you don’t, then dollar-cost average into index funds. This accomplishes diversification across assets and time, two very important things.

Wilbur Ross, the new commerce secretary, had extensive investments in China, and one of his companies was partnered with a state-owned Chinese corporation (under pressure, Ross appears to have divested in 2019).42 While in China in 2017 he talked up a partnership between Goldman Sachs and the state-owned investment fund China Investment Corp, to provide up to $5 billion to buy into US manufacturers, including sensitive assets.43 (Readers might consult this book’s index to grasp the outsized role Goldman Sachs plays in Beijing’s influence operations.) Trump’s director of the National Economic Council, Gary Cohn, had been president of Goldman Sachs, which was heavily involved with Chinese banks, giving Cohn a personal stake in their success. Among his financial interests in China before his appointment was a multimillion-dollar stake in a huge Party-controlled bank, the Industrial and Commercial Bank of China, which he helped to buy assets in the US.

The ruble’s fall, described by analysts as “staggering” and “extreme,” prompted Russia’s central bank to hike a key interest rate by 6.5 percentage points, to 17%, after New York’s trading day had ended. One dollar now buys more than 65 rubles, compared with 33 rubles at the start of the year. Before Russia’s late move, U.S. stocks posted their fifth loss in six sessions, with the Dow industrials dropping 99.99 points, or 0.6%, to 17180.84. The selling was more intense in other markets, with Europe’s main index down 2.2%. Stock markets from Thailand to Mexico also dropped.

Some public pension plans are responding to the continued disappointing returns. The California Public Sector Retirement System (CalPERS) is often regarded as a thought leader among other pension funds, and with over $300 billion in assets it is one of the largest institutional investors in the world. In September 2014 it announced (CalPERS 2014) the elimination of hedge funds from its portfolio, concluding that the cost of investing wasn't justified by the returns. One interesting disclosure was that in the most recent fiscal year through June 2014, CalPERS had paid $135 million in fees on a $4 billion portfolio that earned 7.1%. The approximately $280 million in investment returns ($4 billion × 7.1%) means that for every $2 in returns, it paid away a third dollar in fees. Of the gross returns (i.e., before fees), two-thirds went to CalPERS and one-third to the hedge fund managers. When you consider that it's possible to invest in equity index funds for less than 0.1%, this division of investment profits between the provider of capital and the managers must have appeared as absurd to CalPERS as it does to everyone else.