Are we having fun yet? If you’re with me, and I hope you are, I know you don’t love big swings in the stock market. But, at the end of the day, prices are opinions, and based on the state of the world, opinions are in no shortage in the supply chain.
Your Survival Guy’s got quarters in his loafers tryin’ to fight inflation. Inflation at 8.3%? You and I know it’s much higher in many areas of our life. You know that no matter who wins in November, spending in Washington is not going to stop. The executive branch is clearly unhinged from the reality on Main Street, and even a massive electoral defeat will not check their radicalism.
Remember, and this is key; inflation means different things to each and every one of us. When half the country is pushing for more spending, you and I still have control over our own. We can spend less and save more. We can work until we can’t work another hour. We can be methodical in how we invest like it’s the last dollar we have. Your Survival Guy is by your side.
Because when the leader of the free world talks like he lives in a bubble, then some bubbles pop. Prices in real estate and stocks, for example, can come crashing down when mortgages are due, and earnings disappoint.
“When are we going to be getting back to normal?” you ask. In normal times, investing in stocks and bonds is boring. Today, gambling in stocks has become America’s favorite pastime. But fads come and go. Your Survival Guy knows the Prudent Man doctrine is forever.
In the September 2015 issue of Richard C. Young’s Intelligence Report, Dick Young wrote:
The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court formulation Harvard College v. Amory. The Prudent Man Rule directs trustees “to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital invested.”
Since I started our family investment management firm in 1989, I have operated under the assumption that the Prudent Man Rule to this day carries as much weight as it did in 1830. Common sense and prudence just don’t go out of style—ever.
Action Line: Rather than being a gambler, Your Survival Guy wants you to look for good values like you’re a Walmart shopper. Where you’re paid dividends to be invested. I can’t promise it will be easy, but chances are you’ll be rewarded for your patience. I know my life of compounding didn’t happen overnight. If you need help, let’s talk. In the meantime, click here to subscribe to my free Survive & Thrive letter, and get to know me before we talk.
E.J. Smith - Your Survival Guy
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