Your Survival Guy

Preparing your investments and family for when disaster strikes.

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BE VIGILANT: The Rats Are Scurrying in These Rough Markets

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By lberlik @ Shutterstock.com

How are you feeling? Rough markets, I know. But if you’re in value-oriented equities and short to mid-term bonds, you’ve been able to avoid most of the market chaos. Because it’s chaotic out there. I wish I could say it’s going to get better soon, but I don’t know if it will. I’m Your Survival Guy, not Annie—the sun may not come out tomorrow.

The carnage is brutal, and it’s widespread. The asset bubble is deflating. Those who have used leverage or borrowed money are either feeling the heat, hanging on for dear life, or they’re already done. We’re talking 50% losses and more, easily, where you need a 100% gain to get back to even. That may take a while—especially if there are no cash dividends for compensation while you wait.

Look, it wasn’t that long ago when investors were looking at Dow 10,000 and partying like it was 1999. Then the tech bust blew the market apart. The absolute destruction ruined some investors for a  generation. The financial crisis brought the Dow down below 7,000, and now we’re in the low 30,000s, and investors are wringing their hands. Listen, markets go up. Markets go down. Prepare accordingly.

Do you have someone to talk to about your money who doesn’t treat you like a number? Or do you need to plan a meeting to get the attention you deserve? You’ve worked too hard for your money. You need to speak with your guy, and you need to speak with him now.

Speaking of which, you know I like the idea of working during retirement. But why do I feel like I’m working at the grocery store with self-checkout? At least give me an apron or some compensation. I want you to work in retirement but not for free. There’s plenty of work out there.

In my conversations with you, you’re doing the rehab work on a travel van. In another conversation, you told me you just bought five more income property units bringing your total to 25. You’ll be able to sell them in retirement or live on the income. It’s up to you. Nice options to have.

Another client brought his son-in-law to buy a Browning shotgun. Their good fortune didn’t end there, as the store had received primers from an estate sale that my client secured at a good price. Speaking of which, three gun dealers are telling me business has slowed, prices are OK, but prices for specialty items/antiques are way up. Find your niche and become an expert.

Action Line: In times like these, the rats are coming out in droves, and they’re starving for money to recover their losses. Be vigilant about protecting what is yours across all fronts. Do business with Fidelity as your custodian. Sign up for identity protection (I use LifeLock). Monitor your credit cards. Do not give someone your SSN when they call you saying they’re a government official. Follow your gut. It tends to be right on the money. And if you need help planning your financial future, get in touch with me.

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E.J. Smith - Your Survival Guy

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@yoursurvivalguy.com