Back during my business school days, in an economics class at the Rochester Institute of Technology, my professor told us about a concept known as the "Paradox of Thrift."
The Keynesian theory – which I'm intentionally oversimplifying – basically tells us that a boost in autonomous savings is actually bad for the economy, since it leads to lower demand, lower gross output, and ultimately, a drop in aggregate savings.
The fact that saving money is bad for the economy is counterintuitive, hence the "paradox" label.
Today I want to tell you about another "paradox" – one that initially seems just as contradictory.
I call this one the "Paradox of Wealth."
And it applies perfectly to the "Infection Correction" – the name I coined for the coronavirus-fueled sell-off that's wiped away trillions in shareholder wealth over the last few weeks.
This is the worst run for stocks since October 2008 – in the depths of the Great Financial Crisis. I believe it will get worse – perhaps much worse – before it gets better.
But as we've been telling you, that's not a reason to panic.
Just the opposite, in fact – thanks to the Paradox of Wealth.
You see, as counterintuitive as this sounds, big sell-offs can be your biggest long-term wealth-building opportunities.
What will set you apart from the masses is making deliberate moves in times like these that will be best for the long run.
That's why I want to share with you the tale of an investor who turned one of the worst periods in modern history into one of the smartest wealth-building moves of all time…
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.