What did investors expect? Markets don’t go up forever. It’s why Your Survival Guy has written ad nauseam about asset allocation, diversification, and being an overall defensive investor, especially in or near retirement. That loud sucking noise is from speculators who hoped this stock or that one would make their retirement dreams come true. “I’ll sell when I get to this number,” they say to themselves. And now here we are. There’s lots of hand wringing and finger pointing going on right now. Tariffs or no tariffs, stocks were never cheap.
I wish I could tell you this will be a short and painless recovery, but we know from here, and here that stocks can stay low longer than speculators can stay solvent.
What you don’t see in the above are all the dividends mailed to investors who stayed the course or dividends that were reinvested at bargain basement prices.
In my daily messages to you, I’m writing to the investor, not the speculator. I’m writing to those who made money from their work, saved ‘til it hurt, and lived within their means.
Investing isn’t my hobby.
That’s not to say I don’t have fun. There’s plenty of fun to be had when you become a compounding machine focused on income and not prices. I want you to have the retirement life you deserve. Sometimes you need a helping hand to keep you on the right path.
Action Line: When you want balance in your portfolio and diversification, email me and we’ll talk about Harry Markowitz’s Efficient Frontier. He called diversification the “only free lunch in investing,” and you can see on the chart below that diversification can actually increase your return and lower your risk. That’s the “free lunch” he was talking about. Email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
