Are you forgetting something…The death of an American icon

Have you ever imagined this scenario or better yet, experienced it?

You have to go on a business trip.

You pack carefully. You’ve done this a thousand times but still you are careful. You get your computer, phone, ticket, clothes, etc.

But then as you drive to the airport there’s something gnawing at you. Something’s missing.

You go through your travel checklist.

Computer? Check. Phone charger? Check. Toothbrush? Check. Reading glasses? Check. And you keep moving through your list and all is accounted for..

And still that nagging feeling doesn’t go away. What am I missing? What am I not able to see that I’ll need?

You get on the plane, still that feelings there. You rent a car, still that feelings there. You check into your hotel, still that feelings there.

And only when you’re in front of the client did you realize, too late, what was missing. That one thing…

Is Something Missing From Your Investment Strategy?

This is how a workout buddy described his investing experience to me this week over a coffee. When I asked what he wanted he could only tell me what he didn’t want.

He didn’t want that sinking feeling anymore, like something was missing. That he’d only discover after the market had fallen 50% like in 2000. Or when the market fell 58% in 2008.

He wanted to eliminate that sinking feeling, that he forgot something. And that’s the thing that kept him up at night.

He described how he tried Agora Financial. Money Map Press. Harry Dent. Stansberry Research in addition to keeping his Merrill Lynch guy.

I said, what if I told you you were doing too much. You were working too hard at this. That this whole complex question of what to do with your money in the stock market had a powerful simple answer.

And I showed him the following price chart.

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The first one I showed him was a price chart of commodities (DBC), bonds (TLT) and stocks (IVV).

Three Investment Assets. One story.

Then I asked which color looks most stable? The red one, the blue one or the green one? I didn’t tell him yet what the colors represented?

Ah, blue and red look better.

Okay, thanks. The red one is stocks. The blue one is commodities. And the green one is bonds.

Trump vs. North Korea… Investment worry?

The first thing he mentioned was how the news was talking about a War between the US and North Korea. And that stocks were going to tank (his exact word) because of North Korea and Trump.

I then showed him the picture below. It’s a price chart of the South Korean Stock Market Index via ticker symbol EWY.

One of the first places a war is going to show up is in the price of the affected country’s stock market. And I couldn’t think of a better price chart to show then the country that would get destroyed if a war did break out between Trump and Kim Jong-un.

I asked him, do you see a war in that price?

He then went on to say that his Merrill Lynch adviser has him in 40% bonds because of his age. I then showed him the price chart of the ten year US Treasury (below) over the past seven years.

His answer.

Yeah but the [stock] market is crashing and is going to fall even farther. The first quarter of 2018 was a disaster for stocks. He mentioned an article he read on Investopedia, titled something like, why 2018 is going to be like 1929.

Is 2018 Going to be another 1929?

I tracked the article down. If you want a dump of cortisol (stress hormone) on your brain then click and read the shit that he read.

And then I showed him the price chart below.

It’s the disaster of stocks in the first quarter of 2018. The red line represents where the year started and where it was two days before quarter end.

And then lastly I said to him, if you want to know what disaster looks like, then look at this. It’s a price chart of General Electric. This is what disaster looks like.

A 58% fall while the market when up 25%.

Sinking feelings don’t go away with more work and effort.

They go away when radical ideas are let in. Maybe investors are doing too much.

In Your Corner,

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RC Peck, CFP