Winston Churchill said crisis equals opportunity! Investors see opportunity applying that wisdom in times of crisis and turmoil rather than being fearful.

Wealth Building Portfolio Management, lesson 9, discusses real world crisis and political circumstances investors must learn to deal with. Links at the end guide you to related content if you want to learn more.

What’s in this lesson for me?

This lesson makes you aware of the need for investors to manage investments in times of crisis and political events in the real world. Learning to turn crisis into opportunity can improve your investment portfolio management.

“Don’t let a good crisis go by”

Winston Churchill

Market noise and investing fog can make investing confusing, more so during a crisis or political event that effects stock markets. Stock market opportunity unfolds as the politicians seem to fiddle in front of us. Do we buy in on the dip or grab a bag the beans and run for the hills?

Is it a real crisis looming or... do we have a manufactured opportunity? 

Consider the recurring political crisis in American politics of a U.S. Government shutdown over debt limits. This drama is an entirely artificial political crisis played up by the party not in power. The silly game does have short term effects on markets, the economy and people. They all passes by until the next time.

• U.S. Government shutdown

• Political deadlock

• Debt ceiling looms

• Dollar up or is it down

• Gold up or down or something

• Tapering talk - yes, no, maybe

• Quantitative easing continues

• Massive debt growth

• 2008 Financial crisis lingers

• Pending economic gridlock

My vote is for staying in the stock market and looking for new opportunity. Every time that puts more money in my pockets. I suggest you do the same.

Often, by stepping back from the fray and thinking it through we can see good fortune lurking. Each of the above issues could indeed end the progress being made throughout the economy. True, possible, but a very unlikely outcome. In fact that is absolutely not going to happen.

Political games avoid burning voters

More than ever it continues to be hard to believe any words that come from political players. We are regularly being gamed. Do we need the political smarts of a Winston Churchill? We can only wish the politicians would fiddle with themselves and leave us alone. This never ending show will continue until voter fatigue, anger and financial support brings change.

I can’t see anything on the horizon that suggests any such development. Therefore my expectation is more of the same for the foreseeable future. And with the timely advice of Winston Churchill we should seize this as an opportunity.

So what to do?

Winston has the right idea. We can’t let this good crisis go by. We can use this politically manufactured endlessly looping replay and a volatile stock market to position ourselves to win.

Do your homework on any new stock positions you are considering and wait to buy when the market moves down. Think of it as stocks are going on sale! As stock market opportunities unfold politicians fiddle but that is normal. Just do your homework and be ready to load up!

To play this, let the discounting continue. If you are risk tolerant, buy the dips. If you are more conservative wait until the market trends up. Then buy as we again climb up.

Once we start moving up again you will be able to ride your new positions higher. I expect that we can ride a wave of continuing market growth that will last for at least two more years and perhaps longer.

In addition to the multiple crises listed above there are many more signs of trouble. Global growth remains fragile. I am not ignoring the many negative issues but do believe that on balance the economy will grow. In my opinion, the stock market will work up to higher levels.

This opinion is based on the belief that enough of your neighbors have or will get jobs, buy or renovate houses and replace or add cars. If hiring and buying continue, the stock market will move higher.

I do think that consumer driven growth will continue. Simplistic, yes. But consumers consistently provide effective sets of economic indicators. The current October political crisis will pass and we will move higher.

Of course political games never end. Once past this set of disasters, those clever political lights will manufacture another one. Following the cool crisis example of the confident Winston Churchill, we shall take advantage and buy rather than sell. 

And those beans we thought of grabbing as we ran for the hills, they can’t be forgotten. We will use them to make a fine base for our harvest stew - at home!

Why this lesson matters

This lesson helps you cope with real world crisis and political events that affect markets and investors. Managing well in times of crisis and political events affects investing outcomes and investor wealth. Turning crisis into opportunity can dramatically improve investment returns.

Key take away points from lesson 9, Winston Churchill sees opportunity in crisis:

Winston Churchill was thinking war and politics rather than investing but offered great advice investors can apply. Investors can look at crisis or political events with new vision to seek opportunity. It can be a crisis gives investors an opportunity to load up during the next stock market dip!

• Winston Churchill urges us not to let a good crisis go by!
• Investors can be aware some crisis are manufactured opportunities.
• Politicians regularly manufacture crisis that gets market reactions.
• Investors must do their homework before investing in a crisis.

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Wealth Building Portfolio Management lessons:

Introduction to portfolio management Lesson 1

Pyramid portfolio wealth building Lesson 2

How investors buy dips Lesson 3

Distracted investing misses profits Lesson 4

Investors never average down Lesson 5

Market patterns repeat repeat repeat Lesson 6

Research confirms investment counts matter Lesson 7

Portfolio measurements to size positions Lesson 8

Growth protects investing profits Lesson 9

Winston Churchill said crisis = opportunity Lesson 10

Weeding your investment portfolio Lesson 11

Next lesson 11: Weeding your investment portfolio

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