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A Repetitive Market 🌀 

First, answer this question. Were you one of those “the sky is falling” people a couple of weeks ago?

Well, you see the results. Dip buyers saved support again.

I don’t think the lows are in, but I hope last week gave the nervous watchers a chill 💊 . We will cover the below.

1. Japan’s Currency and its Impact on the United States

2. Repetitive Cycles of various investing markets (Real Estate & Stocks)

3. More dippy or continuation of rippy? (Premium Members Only) Discounted Now at $8.99

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Japan’s Currency

One thing to remember about Japan is the “Carry Trade.”

The carry trade involves borrowing in a currency with low interest rates, like the Japanese yen, and investing in assets with higher interest rates. Here’s how it works:

1. Borrowing: Investors take loans in yen, which has low interest rates.

2. Investing: They convert the yen into a higher-yielding currency and invest it.

3. Profit: They earn from the difference between the low interest on the borrowed yen and the higher returns from the investments.

The Bank of Japan (BOJ) has expressed concern about the potential impact of rising interest rates on Japan's banking system.

Impact on Japan's Economy

The weakening yen has had mixed effects on Japan's economy. On one hand, it has benefited exporters by making Japanese goods cheaper abroad, leading to windfall profits for manufacturers. On the other hand, the rapid depreciation of the yen has raised concerns about the broader economic impact, particularly on household spending and consumer confidence.

As the yen weakens, imported goods become more expensive, which could lead to inflationary pressures.

Explanation for those who are new to currency.

• Imported Goods Become More Expensive:

  • Suppose you're in Japan, and you want to buy something from the U.S. that costs $100.

  • If the exchange rate is 100 yen per dollar, it would cost you 10,000 yen.

  • Now, if the yen weakens and the exchange rate changes to 150 yen per dollar, the same $100 item now costs 15,000 yen.

  • Even though the price in dollars hasn't changed, because the yen is weaker, you need more yen to buy the same product.

To read more on this topic, read our full breakdown in our new category, Beyond the Headlines of Global Economics.

Real Estate & Stocks

Every market happens in cycles. I repeat. EVERYTHING! Don’t forget this.

Political campaign tricks are reused; when a market crashes, it eventually rises, and CEOs use their platform to boost a service or product that is actually trash, and many other tactics; economic changes happen similarly decade after decade. I express the severity of understanding this concept because when you have opportunities, you take them, but sometimes people spend 5 years wasting money on opportunities that were never there. Who am I speaking to?

Traders that have entered the market expecting a quick triple return on their money. Some get lucky, others do not. Know the difference between skill and luck. Successful trading can involve both on various occasions.

Real Estate - How I Bought a House at 2006 Prices in 2024

In an era where home prices have soared, I managed to secure a house for $195,000—an amount unchanged since 2006. Here’s why I believe I struck a major deal:

1. A Look Back at 2006

In 2006, the housing market was at its peak. Prices were at all-time highs, driven by a booming economy and easy credit. It was a period of significant demand, but it also marked the top of the housing bubble. Prices soon plummeted, leading to the Great Recession and a prolonged period of recovery.

2. Navigating the Market in 2024

Fast forward to 2024, and the real estate market has undergone significant shifts. After years of recovery and fluctuating prices, finding a home at 2006 levels is exceptional. In today’s market, where prices have generally increased, securing a property at a 2006 price is a rare opportunity.

3. Why This Deal Stands Out

• Historical Perspective: Buying at 2006 prices means I avoided the inflated costs seen in the years following the recession and the more recent housing boom.

• Market Conditions: With the housing market experiencing ups and downs, acquiring a property at this price point is a testament to finding a unique opportunity amidst the fluctuations.

• Property Value: The fact that the price remained stable over nearly two decades suggests I may have bought a property with inherent value and potential for appreciation.

4. Factors to Consider

• Condition and Location: The true value of this deal also depends on the condition of the property and its location. Ensuring the home is in good shape and situated in a desirable area enhances its long-term value.

• Investment Potential: Given that the price is equivalent to what it was in 2006, it’s likely a good investment, particularly if the property appreciates or remains stable in a growing market.

What’s the point?

The takeaway is everything that happens in Cycles. When it comes to investing, people are always in a hurry. Don’t be. You work hard for your money. Invest it with care.

Stock Market Cycles + Phases!

I found this chart, the S&P500, which shows you all you need to know. When dips come, opportunities arrive.

Does this mean buying dips blindly? Of course not! This post is to change your perspective on how the market works. As investors and traders, we pass through multiple phases.

Market Phases:

1. Accumulation Phase: This is when smart money investors begin buying assets at lower prices, often after a downtrend. The market is generally characterized by low volatility and volume as investors accumulate positions quietly.

2. Markup Phase: Prices start to rise as more investors recognize the value and enter the market. The trend gains momentum, and trading volume increases as optimism grows.

3. Distribution Phase: This phase occurs when the market reaches new highs, and early investors begin to sell their positions to take profits. The market may still rise, but volatility and volume often increase as supply starts to outpace demand.

4. Markdown Phase: Prices decline as selling pressure dominates. This phase is marked by decreased volume and investor pessimism as the market trends lower.

Trader and Investor Phases:

1. Early Adopter: Traders and investors are learning and experimenting, often making small, speculative trades or investments. They’re building their understanding of the market and developing strategies.

2. Active Participant: With more experience, traders and investors become more engaged, taking larger positions and actively managing their portfolios. They start to refine their strategies based on market feedback.

3. Strategist: At this stage, individuals have developed a clear strategy and system for trading or investing. They focus on refining their approach, optimizing performance, and adapting to changing market conditions.

Understanding these phases helps in navigating the market effectively and aligning trading and investing strategies with current market conditions.

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