Could your child understand this price chart?

child stock chart

I was educated in the Illinois public school system in the 1980’s.

Specifically, I was taught to answer the questions my teachers asked. My teachers even gave us students the books that held the right answers they were asking.  

All, so we could “memorize” their answers. From their books.

And if we got enough of their answers right. We’d got an A.

That didn’t go well for me.

The only reason I graduated Barrington High School with 3.4 grade point average out of a 4.0 was because my dyslexic brain could produce amazing artwork.

And Barrington High School had an enormous art department. So it was the arts that got me that 3.4 out of 4. If there was no ginormous art department… then probably a 2.0 out of 4.0.

Needless to say, I think about complex problems visually.

So, let me ask you a question.

What if you found out that you were taught to ask the wrong investment questions?

And what if you found out that the big box world taught you to answer their questions with their answers? And what if you found out that your age didn’t really matter that much to how well your money should grow?

And what if you found out that your self-described risk tolerance was hurting the growth of your money? And what if you learned that answering THEIR questions with THEIR answers were hurting YOUR returns?

Now some of you figured out that the big-box world taught you to ask the wrong questions. And so you left.

And when you left you stepped out of the big-box world and automatically ended up in the pick-of-the-month world.

But what if you then found out that the pick-of-the-month world was no better. And they were just teaching you to ask their questions? Which they were only too happy to supply their books with their answers.

I bet it would make you pretty mad.

But now let me ask you this.

What if everything, and when I say everything, I mean like 95% of everything. Your success. Your performance. Your investment growth. And your ability to avoid the big falls… everything… What if everything you were looking for but couldn’t find in the big-box world and the “pick of the month” world could be found with a different question?

And what if that question had nothing to do with P/E ratios or earnings reports or market share?

What if everything came down to the relationship between stocks and fixed income and commodities and real estate?

And what if knowing how the relationship between those four core assets was that one thing that determined everything?

And what if that question about relationships could get you what you wanted? No predicting. No trading. No timing. No conflicting points of view. No confusion. No complications. No crushing losses.

Just one or two powerfully simple questions about relationships…and voila (there it is), you’d have clarity.

Guys, life is fragile.

My mom had her six-year anniversary from being cancer-free this week. And as we all know, people who have aging parents and growing kids…life can be fragile.

But just because life is fragile doesn’t mean your portfolio should be fragile.

Whether the market’s getting manipulated or not. And Guys let’s be honest, the market’s been getting manipulated for 5,000 years.

And look, the stock market is complex.

The economy is complex. Humans are complex. Cities are complex. Nations are complex. But what if the solution, what if the answer to a complex stock market or economy was a simple solution?

And what if that simplicity was found in asking the right question about relationships?

I want to show you something.

In fact, I want to show you three somethings.

This first is a price chart of the Fed Funds Rate.

I want to point out three things on this chart.

  1. Notice how from 2009 to 2015, the rate was flat? And notice how the rate had never been kept that flat for that long.
  2. Notice how the rate had never been kept that low for that long.
  3. Notice how in the past, prior to the 2009 to 2015 period that the rate was almost always rising or falling? There were a few points when the rate was flat but only for one or two quarters.

But never for years.

And certainly not for six and a half years.

Here’s the Federal Funds Rate price chart:

Fed Funds Rate 1970 to 2018

Next, look at the next price chart below.

I’ve added one additional line to the Federal Funds price chart. This orange priceline is one of those relationships that I was talking to you about. This specific relationship is between the stock-world and the fixed income-world.

I cannot share with you the specifics of the orange line because that would not be fair to my paid subscribers but there’s one thing I want to show you about this relationship priceline that will almost immediately add clarity to your life. Even if you don’t know the specifics… yet.

When the orange priceline is falling, that means stocks are stronger than fixed income is. Meaning, stocks are the asset with the most price stability.

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Okay, look at the price below and see if you can see what I’m seeing?

Fed Funds Rate with Relationship Priceline

Okay… give up? I’ll help you out.

Look at the price chart below.

I’ve added red rectangles for EVERY TIME the Fed raised rates. Now this is what I want to point out to you.

See how my relationship priceline the one that compares the relationship between the stock-world and the fixed income-world.

Fed Funds Rate with relationship and rectangles

Notice anything?

EVERY TIME the Fed raised rates in the past 47 years (black line rising inside the red rectangles) the “relationship priceline” fell.

Every time.

Why does this matter?

Because when this “relationship priceline falls” and its fallen every time over the past 47 years when the Fed raised rates, stocks have been the safer place to be. Stocks have been the place of safe acceleration. Stocks have been the asset of growth.  Stocks equaled stability.  

Every time.

Will it happen again, this time? No one knows.

I wanted you to see this “relationship priceline” with the Federal Funds Rate, so you could see how asking different questions might provide better answers.

What might someone learn?

When the Fed raises rates, they greatly impact the investment world.

And it means, if people want the safest, most secure uptrend and asset for their money, then they’d want to understand how the investment world reacts.

Sadly I believe almost everyone is asking the wrong questions.

And that is why most investors, yes even the ones wading through the “pick of the month” newsletter world have been caught in a scenario they can’t afford to be caught in any longer. Namely a much lower portfolio value when the key relationships change.

It’s one thing to lose half your account’s value when you are 30 or 40 or maybe even 50. But to lose half when you are 60 or 70. That could be devastating.

And please don’t be fooled that “bonds are always safe.”

So if you want to start down a path that will bring stability, and safety and security into your life and you portfolio. Then start asking questions about the relationships between stocks, fixed income, commodities and real estate.

Because the answers people are looking for in the “pick of the month” newsletter world can only be found in the relationships of the four core assets.

And the most anti-fragile thing you could do with your money is get it on the stable uptrends. And that means understanding relationships. And that means asking better questions. Ones where the answers are not in the books that you’ve been sold.

Is there more than just a squiggly line on a price chart that tells you where to be? Of course. Are their nuances? Of course there are. Do you have to know the right indexes and relationships? Of course.

And that’s what Fearless Wealth Research has been doing for 20 years. That’s why we knew something was wrong in 2000. And that’s why we knew something was wrong in 2008.  And that’s why we got out of the market before the large sell offs. And then back in five months after both of those fifty plus percent falls had bottomed.


Because we were asking the right questions.

In Your Corner,

RCPeck-Dig Signature.JPG     
RC Peck, CFP

P.S. If you were to die unexpectedly, do you you think your spouse would be able to pick up the reins and ask the right questions to make sure that your investment portfolio was well taken care of? Just asking.


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