If you are not in total control of an environment, you will be subject to the environment, when you are subject to something, you must protect yourself from what you are subject to as it is not in your control.
In capital market environment, aside from understanding your environment, you MUST cloth yourself with proper protection (proper layer of risk management), otherwise you will often find yourself naked in an unfavorable situation, unprotected and at the mercy of the condition of the environment; proper risk management acts as insurance to protect our investments from adverse uncertainty, which can happen either due to inadequate assessment or victim of luck, proper risk management gives you choices, allows you to wait out a volatile market and buys you time, and time is the most expensive commodity for us non-perpetual beings.
Capital markets have had a history of bubbles for all types of asset classes, the birth and bust cycle of asset bubbles facilitates the transfer of wealth among investors.
This journey of capital market education and our own portfolio construction will help us navigate through complex financial market layers and dynamics and to make sound decisions for future events.
I the author have spent half of my life working in the capital markets and navigating through its complex structures to educate/test myself and polish my skills.
Let’s take this walk together as students of the game while we prepare ourselves through this journey of education to the path of financial freedom.
As we embark upon this journey in capital market structure we must understand the dynamics of the current situation that we are in and the best way to navigate through that situation is a smart goal equipped with proper risk management. There are 10 primary sectors that we focus on depending on the current economic cycle that we are in.
Once you gain better knowledge on the sector/market, you will have a better chance of making sound decisions towards your investment/trades.
The coaching and mentoring service we provide to everyone is for knowledge building and education only, never will I, insight chart ever offer any personal investments advice for any individual/group/entity, they must seek a professional adviser with in their own city/region or country.
Central banks create money supplies that flow into capital markets; this mechanism is required by and should be in proportion to sustainable growth and prosperity furtherance resulting from life/societal advancement all over the world. The money supply that central banks injected impacts every single fiber within the system.
Central banks are established in every single country, they control the issuance of currency or legal tender for a given country. The purpose of this legal tender is to serve as a medium of exchange and value metric in a commerce based social structure.
The injection and withdrawal of the money supply creates the expansion and contraction of the economic cycles, without proper assessment and implementation, will cause inflationary and deflationary cycles.
Debt based system exists due to the delay in feedback loop whereas population and productivity growth demand in time capacity to accommodate/support the expansion. Debt should be in a supporting role in economical/social development rather than a main one.
Diversification of a portfolio is paramount important in capital markets and we must educate ourselves and protect at all times the money earned while sacrificing our time and efforts in laboring through our job or jobs for necessity/security.
I have three general views of constructing an investment strategy to fend risk at an acceptable level for our members .
In life financial freedom and success is a goal shared by everybody, achieving this goal requires everyone exert their efforts tirelessly and exercise extreme caution in controlling the risk associated with the efforts.
Market cycles are very complex, generally organically evolved and emotionally charged; market movements normally are in accordance with underlying economics direction but can be skewed by mass sentiments.