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Diversifying, but no the Market is not going to Crash

 There are a number of items in the news lately that give investors a large amount of concern. There is a looming debt ceiling issue in the United States that continues to be an issue as it does not seem like it is going to be resolved in the near term. However, from the news I've seen it seems like the consensus view is that the ceiling will be raised, eventually. 

The second issue is that there is a non trivial amount of debt that has been issued by the Federal Reserve. Even if you believe/support Modern Monetary Theory, the amount of money that has been issued is huge. Close to 120 Billion Dollars per month has been injected into the US Economy. The tapering of these purchases is looking like it will start happening, but it is definitely challenging to know the exact timing.

The Infrastructure Spending bill total is at 1 Trillion dollars at this point. And the news is that the house of representatives is voting on it this week. 

So, with all of that news in the background I've done several things with my money in order to be more diversified. Initially, I thought that it might make sense to put a little bit into crypto. According to Marketwatch in May, bitcoin is not highly correlated with stock prices, with a correlation around .3 depending on how which market instrument you use. However, the challenge I see with this article is that we don't know what the timeframe was for the analysis. I believe, that as time goes on, with the information like what I've mentioned, I believe that crypto will continue to become more mainstream and as a result, it will be more correlated. 

So, besides crypto, I've also looked at other options to diversify besides stocks. This includes non-traded instruments, crypto, etc. While I continue to believe in stocks, I am also believing that the market is saturated and the macro impacts are the bigger risk compared to risks within individual companies. We'll see if it turns out ok. And what I think is really funny is that despite dipping my toes into these things, I just checked and it is less than a quarter of a percent of my net worth. So, clearly not risky.

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