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If It Ain’t Broke Don’t Try and Fix It

December 30, 2021 By E.J. Smith

By Besjunior @Shutterstock

You and me? We’re the same. We’re simple people. We like simple quotes that wrap up life in a tidy package with a red ribbon. Here’s a couple of quotes I’m thinking about this morning. “If it’s too good to be true, then it probably is,” and, “If it ain’t broke, don’t fix it.” Simple. Concise. Easy to understand. Why, then, for cryin’ out loud, do investors mess with these truisms, and make a mess of their life’s savings? I’ll try and explain.

Let’s start with the first one. Real easy. Say it out loud with me, replacing “it” with “an investment(’s).” Here we go, “If it’s too good to be true, then it probably is.” Why then, when Tom Selleck (loved Magnum P.I.) starts talking reverse mortgages, investors grab a pen and do the same when William Shatner talks health insurance? How about bitcoin or annuities, both of which Your Survival Guy views as rat food. Yet money’s being thrown at all the above like it’s 1999.

“If it ain’t broke,” too many investors say, wait for it, “I can fix it.” “Yes, sir, I can fix it with just a little ‘research.’” And that investor squirrels away in his den turning over every nut in the rare earth’s market, for example, filling his squirrel brain with information he’ll use to corner it. Then something happens. “What happens?” you ask. Life. He’s at some family event, away from his computer, and something goes terribly wrong, like a virus from China or whatever the next disaster will be. The “what” doesn’t matter. The explanation to a spouse? That’s the disaster.

Here’s two relevant facts. First, we’re seeing mad money thrown at bonds that don’t price on a regular basis, by professionals, that need to make good on annuity promises. If you haven’t been paying attention, and I understand you’re busy, some insurers are selling their annuity book to hedge funds. What could possibly go wrong?

The other fact. In the top-heavy S&P 500, five companies (not 500) account for close to a third of the performance. Remember, stocks are like trees. They grow to the sky, but they don’t grow forever.

Action Line: If you know someone that’s messing with his life savings, perhaps, a friend, of a friend, of a friend, then I’d love to talk with him. But only if he’s serious.

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E.J. Smith
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@youngresearch.com
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