CHAPTER 12

Protection and Wealth Building

Strategies

Today’s stock market is a bubble that’s being propped up by

zero interest rates.

There’s nothing Wall Street doesn’t like about free money.

That’s why leverage on the New York Stock Exchange is at an

all time high. This is about the worst possible time for the ev-

eryday investor to get into the market because of new highs.

People like to say “Oh, well, the stock market has more

than tripled since the low in March 2009”. But, that was then

and this is now. We’re five years closer to the next collapse. Is

this the time to be jumping in, or is it time to get out, at least

on a selective basis? Besides, it has more than tripled with easy

money, enormous leverage and very little participation. How

long can that last? Volumes are low so you have a steeply rising

stock market on very low volume with massive leverage. That

is almost the definition of a bubble and that bubble will burst.

This is really the worst possible time to jump in. The every-

day investor has to be very, very careful about stocks in here.

■ Use a “Barbell Strategy”

Not a day goes by without some pretty significant develop-

ments in the markets. You should not react or overreact in a

knee jerk fashion to each piece of data that comes out. You’ll