Investors have a short-term memory. They forget about the disasters. Because they read, and read, and read in search of the next big thing. And they think they have found it. And then, poof, the black swan swoops in, and those gains are washed away with the tide. Luckily for you, you have Your Survival Guy to remind you of how brutal markets can be. Take last year, for example. Everyone’s talking stocks again. But dig a little deeper, and we have an important lesson playing out in real-time. I’m talking about the arithmetic of losses. Lose 50%, and you need a 100% gain to get back to where … [Read more...]
You May Recall the Death of Balanced Investing
You may recall the death of balanced investing. It was all over the place as interest rates were reset to a more palatable level. Did Your Survival Guy recommend selling out? Of course not. The balanced approach never goes out of style for me, a patient, well-tempered investor. Let’s not forget how far we’ve come with interest rates. And let’s not forget how much debt we’re looking at now as a country. Even if stocks continue their climb, isn’t it reasonable to believe this can’t go on forever? Which leads to the question: Survival Guy what do we do? It’s hard to just stand … [Read more...]
Your Survival Guy’s Money for 2024 and Beyond
When it comes to money, my money, Your Survival Guy’s habit is to focus first and foremost on the return of assets and then, and only then, look at the return on them. No one I know likes losing money. And if you don’t have money to compound—in other words, you lost money—the magic of compounding can’t do its work. I’ve been compounding money for most of my life, starting young with a paper route and scooping ice cream. Both taught me to appreciate a dollar earned and to be careful with my savings. Using the rule of 72, I want you to divide it by your rate of return and see more or less how … [Read more...]
In Our Minds, We’re Always about 30 or So
Five years is a long time when thinking about where we’ve been since 2018. But over a lifetime, time flies. Because in our minds, we’re always about 30 or so, even when our bodies beg to differ. With all our living, we don’t know what next year will bring. Yes, I know; there are plenty of predictions out there. Here’s a reminder of how those making them are “often wrong, but never in doubt.” Roll the footage (WSJ article Nov. 2018): U.S. public pension funds are taking on more real estate, and at times some of the riskiest types of property investments, as they try to close their funding … [Read more...]
The #1 Tool Used to Snag Investors
One of the many pitfalls for the investor, and there are many, is the lure of past performance. Past performance is the rock that catches many a ship. Even when the investor might know better, the false confidence that past performance provides can be ruinous. With all the information out there today, it never fails to amaze me how reckless investors can be by betting their savings on yesterday’s winners. If you’ve ever been stuck in the fog, you know what I’m talking about. You think you’re in one place, and when it clears, you can’t believe where you are. What we imagine, or what we … [Read more...]
Manias, Panics, and Crashes: A History of Financial Crises
As a reminder of how ugly markets can be, this holiday season, Your Survival Guy’s been thumbing through Manias, Panics, and Crashes: A History of Financial Crises (fourth edition) by Charles P. Kindleberger. I’ll offer some titles that also work: Bad Stuff Happens, Look Out Below, They Never Learn. The first edition was published in 1978 with plenty of pre-World War II disasters to cover. But what has me thinking this morning is that the latest one, the fourth edition, was written in 2000 before the dot com crash. Little did Kindleberger know what was about to take place, or did he sense … [Read more...]
“What Have You Done for Me Lately?”
In a “What have you done for me lately?” world, it’s easy for investors to see this year’s returns on the S&P 500 and compare their performance. That’s short-sighted. Because if we look over the last two years, for example, the S&P 500 has basically returned to where it was this time in 2021. What’s lost on many is that a dividend-centric approach offered a way to be paid while the market price spun its wheels. Now then, what’s not often discussed is how many investors bailed out of stocks on the way down and missed the rebound, and in their frustration, are now … [Read more...]
“Take Cover! Get Out of the Market!”
In my conversations and emails with you, you tell me about the many predictions being made for next year. As I wrote to you yesterday, one economist, who seems to be wrong at every turn, is calling for a major correction next year—predicting the stock market bubble will burst. Another manager up in Boston is calling for one, too, and has been for a while. I’m not looking to pile on with criticism. But you may have heard another hedge fund guy on Fox talk about commercial real estate “opportunities” as if he’s talking up his book to dig out from losses. Whether it’s his book, a real book, or … [Read more...]
A Stock Market Boom or Bust for 2024?
Your Survival Guy received some Christmas emails asking about a certain economist’s stock market prediction that the bubble’s about to burst. My take? Why ruin Christmas? Maybe he’s right, maybe he’s wrong. What I know for sure is he’s in the business of selling books and making headlines. That’s not acting like a fiduciary. I remember back in 1998 when this same economist wrote a book calling for the roaring 2000s. The roar turned out to be the sound from investors pummeled by the tech bust a few years later. Then he called for, in 2004, another boom to come, taking a pass on the … [Read more...]
The Coaches
“As Florida State linebackers coach in 1972, Bill Parcells read the preface for Bill Libby’s The Coaches, published that year by Regnery. Feeling that it eloquently described his profession, Parcells condensed the 1,039-word introduction into roughly 390 words that hit home the most. The coach laminated the shortened version. Throughout his long football career, he re-read it, especially during tough times. Below is the exact wording from Parcells’s sheet,” from Parcells: A Football Life, by Bill Parcells and Nunyo Demasio. He is called “Coach.” It is a difficult job, and there is no clear … [Read more...]
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