Phil here…
I love receiving feedback or questions from subscribers… and today, I’d like to take some time to respond.
As always, if you have a question, feel free to drop me a line at [email protected]. Just know I can’t give personalized investment advice.
First, a reader asks about timing the residential markets…
Hi Phil, would it be wise to invest in the residential market now and hold for 2-3 years and sell or would it be best to keep my money in the stock market, sell out near the top of the market (on your timing) and buy a few years later in the downturn. Another way of putting it, there will be a run up now in real estate, but would you predict that house prices will drop further down after the crash than prices are now?
– David L.
Hi David. Thanks for writing in. It’s a difficult question… in one sense, into 2026, you’ll find it easier to get a loan. After 2026, prices may well be lower, assuming the real estate cycle repeats like it should… I think it will… but it’ll be much harder to get a loan. For me, I bought several places in London, 2009-2010, but I had to buy them for cash and I’d partnered up with a person who worked, a fairly senior person who actually worked in a bank, and I can tell you when you’re investing, you very quickly run out of cash. Your cash doesn’t last forever. So you’re much better trying to get off a loan and let market forces over time get you more equity in the place.
So I don’t have an answer, you’ll have to try and work that out how you think.
The key thing is though, don’t go into extensive debt into 2026, which I think you’ve worked out already. Hope that helps.
Next, a reader wonders about how a weakening U.S. dollar can affect their retirement…
Hi Phil, I have a question outside of our individual brokerage portfolios as we approach this next cycle top.
The 401k (and other equivalent retirement accounts) are usually very limited in the investment choices made available to holders, typically offering a limited variety of mutual funds and then usually some form of stable money market funds for cash equivalents.
In your teaching us “Right stock, right time” philosophy – do you think there will be generalized ways to also protect retirement accounts?
Given some of your recent insights that we’re going to have to watch the dollar following the slide in the land market, my previous thoughts of moving from index equities to stable cash equivalents might not be the best idea if the dollar takes a dive. Could you provide any thoughts of how we might also protect such accounts?
Thank you and your team for teaching us to read the cycle!
– Garen H.
Hi Garen. Thanks for emailing in. To protect retirement accounts… well, that’s a difficult one. I’m not a U.S. citizen and as such, I view the country from outside.
Yes, we will have to watch the dollar and the slide in the land market, but from the point of view of being inside the U.S., if you’re holding dollars it won’t make a great deal of difference inside the U.S., however, if the dollar gets weaker relative to other currencies, then it’s worth your while to hold a little bit of cash in those other currencies so that as the dollar declines, your wealth actually goes up because you’ve got money in other currencies that are getting stronger.
This is of course why so many people around the world like to hold dollars and not their own currencies.
So this is going to be something that I think after 2026 is going to be new to Americans.
It’s going to be interesting to watch. You will have to make up your own mind about how that goes, but as we get closer to 2026, this is something I’ll make a comment on. I don’t think it’s something you need to worry about just now.
Next, a reader asks excellent questions about protecting funds after 2026…
Hi Phil, what do we do with the money from any sale of land or any other real estate that we may sell before the collapse in 2025/6? How do we protect our funds if we’re to sell our assets – land and stocks – if these banks begin to collapse?
Do we buy physical gold and other commodities in their physical form in order to get out of the banking system?
If we aren’t able to protect the value of our money, how can we take advantage of the upturn that will eventually follow in 4.6 years after the collapse?
– Shalin T.
Hi Shalin, thanks for emailing in. Yes, you asked good questions, but in a sense it’s a little bit early I think for me to respond to that.
We have to have a look at what the market is telling us as we go into 2024, 2025, 2026. We’re going to have to have a very big up move to get a big collapse and we haven’t had that big up move yet.
So let’s see how the up move goes. I will have a lot more to say about exactly your questions as we progress over the next couple of years, okay? I don’t think the market’s telling us what exactly we should be doing and how to respond. We’ll have to wait until then.
Next, a reader asks about another land market economist, Fred Harrison…
Phil, I mainly trade options since stocks have killed me. As such, I was wondering if you have worked in conjunction with Fred Harrison? In his 2005 book, Boom/Bust House Prices, Banking and Depression of 2010 he brought up the 18 year cycle.
He has also said house prices will peak in 2026. So I thought you might know him.
– Pete L.
Hi Pete. Thanks for emailing in. Yes, I do know Fred. I’m sitting here at the moment in my London office. I had a sit down conversation with him this very morning. So yes, I learned quite a bit of stuff from Fred as you can see.
Options, stocks and things like that, you have to have stop losses. That’s what we do. It’s to protect your capital. My service is about right stock, right time.
If you can get the breakouts properly, you can always get several winners. One of the winners out of several will always more than compensate for the stops, so we’ll see how we go. Thanks again, Pete for writing in.
Next, I tell a reader about the best way to learn to read a stock chart…
Phil, I’ve purchased and read The Secret Life of Real Estate and Banking and learned a lot about what to look for and when. However the short term trading (within a year) is still elusive for me. You always say “learn to read a chart.” I’m looking for good resources to do just that but there is a lot of garbage and swindlers out there. Can you give any recommendations?
– James V.
James, thanks for writing in. Yes, I absolutely can give some recommendations about learning to read a chart. My suggestion is to buy a book from WD Gann. You should buy the two books in one, Truth of the Stock Tape and Wall Street Stock Selector. And just start reading, but don’t just read the book.
Every time Gann talks about a stock, actually reconstruct the prices that it gives. And from my point of view, it’s the first 67 pages inclusive. In other words, up to page 68, especially the two chapters where he talks about leading stocks, lagging stocks, and stocks on a downtrend.
And on page 67, you get to the example “Mexican Pete,” you do those first 67 pages and you’ll know how to read a chart.
Okay, get back to me when you’ve done it and if you’ve got any questions, I’ll answer them then. Thanks James.
Reader Dennis has a question about different cycles…
I started to see if I can make sense using the cycles from Gann but I have a tough time comparing graphically the Industrials Average with the current situation using the 90 year cycle as 90 years ago was the great depression in full swing.
I have tried to compare the current situation with the 1920 and although also difficult, it is a bit better.
How do you upon this long cycle period? I seem to move towards using the cycles from 1960 onwards for comparison.
– Dennis B.
Hi Dennis. Thanks for writing in. Good questions, but let me try to put you straight a little bit.
If you’re trying to make a forecast of the Dow for the years 2023, 2024, I think it’s easiest to just look 10 years back, 20 years back, and 30 years back just for starters. That will give you the major things to worry about.
And then construct another line that’s basically 20 years back and 60 years back.
Twenty and 60 are the big numbers, they’re the most important decade cycle that I show. That’s half of the 20-year cycle and the 20-year cycle is a third of 60.
They relate to planetary movements, and 20 and 60 are the two you should worry about, and that’s the comparison you want to have.
So for this year, you’d be looking at 2003 and 1963. If you do it 10 years back and 30 years back as well, you can see just how easy it was to spot the late February, early March low.
That should have repeated this year… and it has. Dennis, I hope that’s helpful. Thanks.
Last, I reassure reader Jim A. that we’re not looking at a 2008 moment in commercial real estate…
Hi Phil, I’ve been hearing that low interest rates are ending in the commercial real estate and business will have to refinance to new higher rates.
Will this be another 2008 moment?
Please advise if there are any reasons to worry about the incoming potential threat to the commercial real estate market. Thank you, Phil and keep up the great work, I really look forward to your video clips.
– Jim A.
Hi Jim. Thanks for emailing in. I don’t believe this will be another 2008 moment specifically because if you know your history, the last 11 times that the Fed have lifted interest rates since 1955, 10 of those times house prices continued to go up and on three or four of those occasions, house prices actually doubled whilst interest rates were going up.
I talk about all of this in my book, The Secret Life of Real Estate and Banking. The 11th time out of 11, prices just declined, I think it was about 1%, meaningless move.
So I don’t think this will be a 2008 moment. I think we’ve got a few good years left. Of course, every cycle has to happen differently. There’s always something that happens that will worry investors and while we’ve got things to worry about, markets don’t collapse.
It’s about the best way I can put it. So Jim, we’ll just have to see what happens.
That’s all for today.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
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