No wonder 2020 was the year of the rat. On December 31st at 11:59pm the whole world felt a bit lighter even though 2021 rolled in the same challenges but possibly more hope.
If we survived one of the darkest days in American history last year, we can get through anything. Although 2020 was known for the deadly Covid pandemic that has upended all of our lives turned into a mental health crisis, we do have to thank the WFH lifestyle, recession, boredom and financial literacy boost for helping grow the economy.
Whatâs important to note is that the economy is not the stock market but they are related.
When it comes to the economy, this is in the central banks hands. Monetary policy refers to central bank activities that are directed toward influencing the money supply and credit in an economy. Its goal is to influence output, price stability, and employment.
The Fed on the other hand deals with the stock market and business. Fiscal policy involves the use of government spending and tax policies to influence the level of aggregate demand in an economy and thus the level of economic activity through inflation.
Fed Chairman Jerome Powell stated in a press conference last week that he will keep interest rates near 0â2% for the next few months yet the stock market is eager to get back to real life indicating something different last week.
The 10-year yield which is driven by investors in the markets, not Powellâs team of legislators, hit its highest point in almost a year last Thursday at 1.5% mirroring a tough bet against stocks.
In regards to the economy, with stimulus and positive indication that the vaccine rollout is rolling out as planned, the stock market is near its all time highs. There will always be volatility and this sentiment certainly came last week when the Fed started to sell bonds (increasing the price of them) indicating that the stock market is predicting life will come back to normal earlier than predicted closer to Spring.
This drove off bond prices leading them to near the dividend yield, the split between bonds and stocks. Since equities, especially tech stocks take up a large portion of equity in the major indexes, they donât do well when yields rise and bond prices inflate so they had a selling off period last week for a hot sec.
When it comes to personal spending and consumption, 2020 was a year for the record books.
New data show several indications that wealth preservation and net worths are up:
-US consumers are flushed with cash as personal incomes jumped 10% last month
-Thereâs a shortage of investors for real estate on the market as those who previously couldnât afford to take out loans now can in this low interest rate with the averge mortgage at 2.5%
-Spending grew 2.4% the biggest gain in seven months with e-commerce
-More cash = more dispensable income learning + practicing saving to become more diligent for another recession in the years to come. (That is healthy for the economy btw. Dips are normal)
2021 certainly started off rocky but calmed down once Biden was sworn into office, the election seized to end and vaccine rollouts were underway.
Yet with political tensions from the January 6th Capital Riot to the meme stock madness of unprofitable Reddit gamblers, 2021 is certainly feeling like 2020 just in a different way.
But if thereâs one thing to keep us stable, itâs from the animal, the Ox.
Success with the Chinese
February 12th is the first day of the traditional Chinese calendar and marks the start to the Chinese New Year, also known as the âSpring Festivalâ bringing some light into our days.
Now the Ox is a feisty animal so as with everything, it has its pros and cons.
Pros
-Honest
-Diligent
-Strong
-Dependable
Cons
-Opinionated
-Hates challenges
-Hates to fail and loose
-Believes in themselves too much-selfish
Well, we certainly have some more challenges to face mainly with this pandemic, mental illness and the wealth inequality but letâs keep a positive spirit that the Ox wonât let us down this year.
How to Use The Oxâs Signs to Be Successful With Your Finances and Life
Now no matter how religious or spiritual you are, you can always positively believe a force will help guide you.
After all, I always believe that things donât happen to you but for you.
But before we go out and put our heart and sole into the Ox, itâs vital to remember that we must keep an open mind and spread our assets throughout the place. We cannot keep our eggs in 1 basket, whether itâs with family to health, living a balanced, diverse lifestyle is key to wealth and happiness.
Salary and titles wonât bring you happiness alone. Itâs being a good, humble and prudent person. Character derives from fulfillment and being grateful.
So letâs unpack the 2 key elements the Ox has to teach us:
#1: Cash is King + Dependability Force
According to the Associated Press, 69% of households have less than $1,000 in emergency savings. These people are too positive that nothing bad will happen. Thatâs unrealistic and silly.
Money is still a taboo and there is no reason why we shouldnât talk about it anymore.
70% of married couples argue about moneyâââahead of fights about household chores, togetherness, sex, snoring and whatâs for dinner.
Money is the only thing that will keep you afloat. I donât care if you study art or engineering, money will impact you whether you like it or not.
Donât rely on the education system or your Latin script degree to prepare you for the real world. If weâve learned one thing during this pandemic, itâs never to rely on one member of the household, never take your health for granted, having cash for emergencies is key although its deflationary and planning for the worst, hoping for the best will keep you sane and supported.
Donât have a portfolio breakdown of 80% active investments and 20% passive because that will kill you. Same thing with growth vs dividend stocks. Unless you are under 30, having a portfolio in all growth stocks no dividends to stabilize the volatility will crush you when thereâs a downturn.
Think long term not short term day trader style.
Cash is necessary for emergencies and they are investable unless you live under a rock and in that case, have a portfolio only in equities.
As much as you love your job, no job is stable because businesses always weighs profit>people.
If the budget doesnât work out for them, someone has to be cut, no matter how great of an employee you are.
Having a backup plan is key. Donât overthink it, just be rational and you will live a very peaceful life that way.
#2: Donât Be AÂ Bull
Oxen can be stubborn and their tempers can flare, causing conflicts. They are a type of bull that if something ticks them off, they will run like thereâs no tomorrow trying to hunt you down.
But with everything going on, we are all on edge and have higher tempers. This comes the responsibility to be there for yourself.
Taking a break is never lazy, it is necessary for growth.
How do you expect to be there for someone if you arenât there for yourself?
The best investment is in yourself because:
1) No one can take education or your mind away from you
2) Pays dividends when you can use that knowledge to create and empower the world
3) Health = Wealth, you live longer with a healthier mind and body allowing you to make more in the end
Iâm a fitness 5am junkie. I donât do mediation or yoga because that doesnât suit me, I ride my Peloton and or elliptical while getting in my daily dose of reading to start the day off right.
Donât force yourself to do something right just because it works for someone else.
Do whatâs right of you to actually grow and change.
Change is healthy, it means you are becoming the person you always deserved to be.
Cabin fever and burnout is real. Being busy isnât a badge of honor it means you have no priorities.
Learning to say no is a superpower. The top 1% of people say no more than yes because they know what is worth their time and attention, your most precious commodities.
Always stay in tuned with yourself first. Be selfish sometimes to reap the rewards.
Never thought you could learn from a feisty bull?
Think again.
Take care of yourself.
Plan for uncertainty and live peacefully.
Happy 2021 (with caution).