In 2022, people around the world felt in crisis. Housing prices were depressed, the stock market was depressed and even Warren Buffett lost a rare $44 billion. (CNN, 2022) People who have bought a house feel powerless to watch the price of a house not rise while paying their mortgage. Equity holders have watched the A-shares and U.S. stocks fall into bear markets. My total assets on trading software even went from 6,000 to 5,122.

Nevertheless, the magic of the global economy is not over. One financial storm after another is coming. The Federal Reserve Bank of the United States has been raising interest rates and shrinking its balance sheet at a crazy pace on various public occasions, both large and small, throughout 2022. (Dockery, 2022) This means that the cycle of printing money and releasing water has not only ended but even started a new pattern of pumping money. I have to say that this is good news for me. The price of sterling against RMB is lower, and I can pay for my tuition at a lower price.

Since the start of the global epidemic two years ago, human life and productivity have been greatly impacted. In 2020, the GDP of the whole world even showed a very rare negative growth. However, it was corresponding to the soaring stock market and housing prices of various countries in the previous two years. For example, the Dow Jones Industrial Index of the United States rose from the lowest of 18000 in the previous year to 37000, doubling in two years. (spglobal, 2022) What kind of investment can match this rate of return? However, the stocks and house prices were seen in 2022 are falling.

What do investment giants say?

The two titans of the capital world began the year by expressing their concerns about the future of the world economy. Elon Musk predicted that the macro economy would be challenging and that the economic crisis would not exceed 2023 at the latest. Warren Buffett showed his cautious attitude towards the current situation with his practical operation. The latest financial report of Berkshire Hathaway shows that Berkshire now has more than $100 billion of cash on its books, which is its historical peak. The last time Warren Buffett held hundreds of billions of dollars of cash, he was ridiculed and questioned by the entire capital market. His yield has not outperformed American stocks for several years, and he has cash in hand but does not invest. However, in March 2020, US stocks fell sharply due to circuit breakers. In just two weeks, American stocks fell by 40%. Buffett had cash in hand at that time to avoid the sharp drop. This shows the strength of the current capital market. I’m even thinking about taking the money out like him.

If a financial crisis does come, what should we do?

• Increase hard currency in assets 
• Focus on some economic weights and energy non-ferrous commodities 
• Increase income

We can buy some high-quality real estate. At present, the area of high-quality real estate is shrinking rapidly. On the contrary, real estate in some economically shrinking cities is not worth buying. If it is owned, it should be sold quickly, and the funds should be freed up for investment in high-quality assets. We can also allocate some precious metals such as gold and buy some digital assets appropriately. Gold is risk-averse and digital assets are risk-averse. Commodity risk is too high, we can focus on some related index funds. In the next few years, in addition to the fixed salary, we should try every means to increase a relatively controllable income with stable income and other income channels that can be cultivated, such as doing a side business or doing some small-scale investment with controllable risk.