During economic depression, businesses with poor business model or poor products will be phased out. Interest rate starts to drop to help businesses to survive. The market begins its correction process. After the correction, the economy cycle repeats. Stock market will be the first indication, followed by interest rate, and finally property.
The rich understands this economic cycle. Unlike the poor, the rich will start to park their cash in the stock market towards the end of the depression. The rich will wait patiently for 1, 2 or 3 years. They are not bothered by the daily fluctuation in stock prices. When stock market revive, they easily make 200-300% return. The next thing they watch out for is the property prices. When property prices begin to show its first quarter increase, they will sell off some of their shares and grab a few properties. In another 1 or 2 years, their properties appreciate in value and they easily make a few millions. When the economy reaches its peak, they will sell off some of their properties, keep some to earn rental income and park the rest of their money in fix deposit, survive through the depression (which can last for about 5 years!) and wait for the next cycle!
The rich understands this economic cycle. Unlike the poor, the rich will start to park their cash in the stock market towards the end of the depression. The rich will wait patiently for 1, 2 or 3 years. They are not bothered by the daily fluctuation in stock prices. When stock market revive, they easily make 200-300% return. The next thing they watch out for is the property prices. When property prices begin to show its first quarter increase, they will sell off some of their shares and grab a few properties. In another 1 or 2 years, their properties appreciate in value and they easily make a few millions. When the economy reaches its peak, they will sell off some of their properties, keep some to earn rental income and park the rest of their money in fix deposit, survive through the depression (which can last for about 5 years!) and wait for the next cycle!
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