It should be apparent by now that we are likely in a recession, as the Federal Reserve has finally embarked on a policy of tightening monetary policy to deal with historic inflation.

Most pundits were shocked that 1st quarter GDP came in at -1.4%, as virtually no Wall Street economist predicted that much weakness.

I don’t make economic forecasts, but given my knowledge of history, I figured the sugar high from all of the stimulus provided by the Trump admin, Biden admin, and the Fed, would wear off.

There is often a lull at the beginning of the year after the holidays.  Consumers have to start paying for all those goodies that bought.

The trouble was, consumers were already pulling back late last year due to higher prices at the pump and at the grocery store in addition to the higher rents they were paying for their homes.

It was clear to me that the Fed was behind the curve in their tightening process, as the Treasury Bond market began to roll over again late last summer.

We now have a situation where inflation is running hot and economic growth has stopped… stagflation.

Unsurprisingly, the stock market began to reflect this reality starting late last year.  The Nasdaq Composite is now almost 30% below its closing high from last Fall.

So, given that the bond market is trading in its worst bear market over the last 40 years, and the stock market is in a harsh sell-off, where can an individual investor make a buck?

Traditionally, when inflation has reared its ugly head, gold has often been the choice for some investors seeking diversification in their portfolio.

Yet, gold has actually been selling off in recent weeks after failing to surpass its 2020 high near $2,100.  On Friday it actually traded below $1,800.

Cryptocurrencies have also been selling off, and Bitcoin actually traded below $28,000 last week.  It has dropped over 50% since hitting its peak over $67,000 last year.

One asset class I recommend some individual investors consider is the futures markets.

I am not a big believer in “investing” in commodities such as gold and crude oil, but I do believe that savvy investors who have the discipline to stick with a trading plan can exploit major moves in the futures markets.

By learning how to trade these markets, individual investors can have the ability to capture short term moves lasting just a few days, or even longer term moves that last several months or more.

However, there is a substantial learning curve, which is why I put together my futures trading course for people interested in gaining more control over their portfolios.

Keep in mind, futures trading involves significant risk and is not for all investors.  Check out my futures trading course, or feel free to email me with any questions if that is a direction you are considering.

With that said, I believe this is a time where it will be wise to hunker down and prepare for a significant economic downturn.  The signs have been there for awhile, but they are flashing red now.