How to Have Peace of Mind During High Inflation - Darius Foroux

Periods of high growth and low growth are not uncommon. For example, look at how the world went from the great 1920s to the Great Depression in the 1930s.

Investor Howard Marks discusses the concept of cycles in his book, Mastering The Market Cycle. He states that the economy grows, on average, at a consistent pace. The economy will get stimulated and make people take more risks and consume more. In turn, this period often causes inflation and slows things down.

Recessions and slowdowns are normal. However, when you invest long-term, these fluctuations won’t harm you.

Avoid taking too much risk when the economy is booming. Likewise, avoid buying into things you don't understand.

Things only become troublesome when you make bad investment decisions during periods of high growth. For example:

• You bought houses without income in the 2000s.
• Or you bought stocks and crypto with borrowed money over the last year.

When you recognise economic patterns, you'll know that the current trends are expected and normal.

• Knowledge. Learn more about how the economy and stocks work. When you have better knowledge of the history of finance, you won't fall for too-good-to-be-true investments. Read good books on personal finance that have stood the test of time.
• Mindfulness. Knowledge will not give you full peace of mind, so practising some form of Mindfulness or Stoicism can help detach from money stress.